Chamber News

December 17, 2018 Likes Comments

‘Hiring crisis’ is top concern entering 2019

By Greg Reibman

Area business owners and hiring managers looking to attract and retain great employees may be in for some sleepless nights in 2019.

That’s according to a survey of chamber members who told us that staffing would be the greatest impediment to their success in the year ahead.

Low unemployment always makes finding employees a challenge. But in Greater Boston’s inner western suburbs, the hunt for talent is exasperated by traffic, inadequate public transportation, insufficient parking and housing shortage; all issues our members also listed as top concerns.

Employers are having trouble filling everything from high-salary tech and life sciences jobs to hourly workers for hotels and restaurants, members say. It’s been cited as a factor by business owners who close businesses or curtail hours and by those who consider locating here.

Also weighing heavily on business owners’ minds -- according to our email survey conducted this fall -- is the high cost of health insurance. Additional concerns include the conditions of our streets and sidewalks, and uncertainty about federal policy, local zoning and regulations.

But by far employment worries (along with interrelated issues: wages, education and workforce training) are the top concerns for many.

Sixty-one percent of our 228 members who participated in our survey told us “attracting and retaining workers” would be critical or very important to their success in 2019. Just 19 percent said it would not be important.

Workforce is an even more pronounced concern for our market’s largest employers. A stunning 89 percent of businesses with 100-plus employees said workforce would be critical to their 2019 success. Only three percent of our region’s biggest employers said staffing was not important.

“Our positions in the $45-75 salary range are filled with people living in Rhode Island, New Hampshire and Western Massachusetts because they can’t find affordable housing any closer,” one large employer said in a comment.

“Labor rates continue to climb every year,” added a respondent at a smaller company. “We continue to pay higher rates every year in order to retain the help. But then it becomes harder and harder to maintain our profit margins.”

Concerns about hiring are a challenge across Eastern Massachusetts. Unemployment in October in Newton was 2.2 percent and in Needham 2.4 percent, or about one percent lower than the overall Greater Boston market.

In her annual Economic Forecast presentation to the chamber on Nov. 28, Mary Burke, a senior economist at the Federal Reserve Bank of Boston, said tighter immigration policies, aging population, the high cost of living and an opioid epidemic (that according to one study kept 32,700 people out the state workforce last year) were all contributing to our region’s labor force woes.

Meanwhile, luring workers westward from Boston and Cambridge, which has seen a 20 percent net improvement in jobs over the past decade, is challenged by traffic, inadequate public transportation, high housing costs and a shortage of parking.

And it’s easy to spot the interconnection between the labor shortage, traffic, transportation and housing in our survey results.

“Traffic in the area is the No. 1 killer,” wrote a tech worker at a small employer. “We need better and more public transportation. Fixing that will solve so many other issues, drive productivity and lead to higher tax revenues.”

“We have one of the worst traffic commutes in the country,” added a sole entrepreneur. “Solutions should include better roads, bike paths, better transit and housing next to where the jobs are.”

Housing in Greater Boston is growing too slowly to meet the demands of a booming economy. Since 2010, the Metropolitan Area Planning Council’s Metro Mayors communities have added nearly 110,000 residents and 148,000 new jobs while permitting only 32,500 new housing units. Prices and rents have risen well above the increase in average income. And with the net growth in population through 2030 projected to come from millennials and seniors, there will be a large increase in demand for smaller housing units.

Boston proper has a done a good job issuing new building permits but the suburbs have reduced the number of permits while new projects face significant opposition. Needham has added hundreds of new apartment units in recent years but now seems poised to put the brakes on adding any more. The Newton City Council will soon be considering approval of several substantial developments but not without considerable opposition.

Road and transit improvements are coming too, including enhancements to the Green Line, potential shuttle buses, and the redesign of Needham Street and Highland Ave.

Unfortunately, none of the housing and transportation remedies will solve the immediate staffing challenges our businesses face in the new year. But 2019 needs to be the year we double-down on efforts to address these concerns head on.

 

Greg Reibman is the chamber’s president.

 

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