Number One Concern

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Thanks to my neighbor Rudy - my staunchest critic and biggest advocate - for the column idea. As I pen this post from my garage office, I’m reminded of myriad conversations I’ve had lately with manufacturing and logistics companies throughout the OC and the IE. Ask any small business owner what their number one concern is these days - AKA what keeps them up at night - and universally you’ll hear…the lack of quality employees from which to choose. Doubt what I say? Just drive around and you’ll be feted with featured “now hiring”, “help wanted”, and “apply within” signs. One of our clients - who operates an adhesives manufacturing operation - has resorted to “bounties”. He pays his existing workers $500 per referral that result in a hire. His only qualifier is the new employee must stay for at least six months.
 
You may be wondering what any of this has to do with commercial real estate? Just this. Relocations are triggered by several factors. One of these is an expansion of commerce. Added business is fulfilled through the addition of employees, machinery or both. Commercial real estate houses said enterprises. If a building has capacity - ie: places for the extra folks to sit or spaces in the plant for the equipment - no issue. In the alternative - big issue. Now, the company must place a “band aid” by doubling up offices, adjusting the shop, or moving to larger quarters. As I’ve written ad nauseam - there is an acute lack of vacant industrial space in the market - so the problem compounds. But, this tete-a-tete will be tabled for another time. Today, I want to focus on the shortage of workers and my suggested fixes.
 
I read with great interest today how California’s unemployment rate is one of the highest in the nation. Hmmm. Then why is hiring such an issue? Some may opine. In the early days of the pandemic - our government paid people to not work. Good decision? Initially, yes. But, from what I hear from employers - the prolonged subsidy has created lethargy in our workforce. After all - why rise early, schlep the freeways, and encounter a cranky supervisor if you can make just as much by NOT working?
 
But in my view, the drought is more systemic. I believe we’ve done a substandard job - sorry for the pun - of preparing tomorrow’s workforce for the jobs that will exist when they graduate high school or college. Specifically, in our trades - carpenters, painters, electricians, plumbers, welders, contractors who repair air conditioning and heating, appliance and flooring installers, etc. there’s a huge imbalance. If you’ve a stopped up drain - good luck getting someone out to repair it anytime soon.
 
Most of these trades are learned through an apprentice program. Unions understand and train accordingly. But many times, a more seasoned non-union individual passes along her craft to the next gen. But what about vocational training in high schools? Remember the days of wood shop, auto shop and home economics? But how about building stuff?
 
The next gen should be willing to learn because the income potential is unbridled! Maybe these jobs lack a “coolness factor”. It’s not that appealing to work in a hot attic versus an air conditioned suite. Plus, we as a society are partially to blame. But, I won’t go there.
 
As to skilled labor such a CNC machine operators, plastic injection molders, die cut operators, truck and fork lift drivers - I believe the solution might lie within our community colleges. Wonderfully positioned - and state funded - to serve the local employer needs - these centers for learning are perfect! How about a partnership with the largest local job creators and academia to understand the needs and accommodating them?
 
With a little planning and leadership - we got this!
 
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.