This is Part 2 of WGLT’s weeklong series The Next Shift about workforce issues in McLean County. Coming Wednesday: How working remotely in McLean County became more than a COVID-era trend.
There is no single explanation for why Bloomington-Normal’s labor market is so crazy right now. But one employer hiring 7,500 workers in three years is the electric elephant in the room.
Rivian’s rapid growth is one of the strongest forces shaping the local workforce. The electric automaker has gobbled up workers from many other employers, while its higher wages and benefits have raised the bar for what’s expected locally, especially for low-skill labor, according to WGLT interviews with 10 employers across the community.
Many of Rivian’s 8,000 local employees answer to manufacturing chief Tim Fallon. WGLT asked him recently whether Rivian worried about the unintended result of its presence on the local workforce.
“That’s definitely something that we all think about – all of the big employers within the local community,” Fallon said. “There’s numerous discussions about that, and how do we make sure we continue to develop everybody within the local community? How do we get the high schools, the grade schools, the community colleges, ISU, to all understand what we do, so that we can continue to build the base and the pool so we can all be successful.”
Yet Rivian isn’t the only factor that’s made it hard to hire and retain people. The pandemic, the Great Resignation, inflation, generational differences – they all add up to a labor market that’s forced employers to adapt to a new reality where workers have more leverage than they did just a few years ago.
“The amount of job openings that are out in our market currently has allowed people to pick and choose. They know that they can walk out one door and have a job the same day,” said Mikel Petro, who owns 15 McDonald’s restaurants in central Illinois, including eight in Bloomington-Normal, with over 800 employees. “That has been challenging.”
Petro said they've responded with a more deliberate "employee value proposition." They've raised starting pay from $11 to $15 an hour over the past three years. They're now offering paid time off after six months on the job, up to 40 hours. The result: Petro said turnover at his company is lower than at peer franchisees.
Petro’s view on Rivian echoes what many employers told WGLT: It’s a blessing and a curse, or at least a challenge. Yes, Rivian’s arrival has diversified the economy beyond white-collar jobs, juiced the housing market, and brought in people who need hotel rooms and eat at places like McDonald’s.
“I think Rivian is great for the community, as far as bringing jobs and opportunity for people here. We did lose several people to Rivian who had a lot of tenure and a lot of experience. It takes time to develop that piece. That was difficult,” Petro said. “But I will say that we did have quite a few folks who left us on good terms who’ve come back (to McDonald’s).”
Beer Nuts president Andy Shirk said companies like Rivian, Brandt and Ferrero have created more competition for low-skill labor, making it harder for his company to hire and keep people.
“I’d be really small-minded to say that’s a bad thing. Yeah, we felt some pain from it. But the rising tide lifts all ships, and we’re seeing that too,” Shirk said.
Still, this reality requires adaptation.
At Beer Nuts in Bloomington, Shirk says they were overdue for raises – so they’ve doubled their base wage in the past three years. They weren’t offering dental or vision benefits. Now they are.
Those added costs, plus inflation driving up the cost of supplies, means Beer Nuts has had to adjust its prices multiple times in the past two years.
“Everybody knows their grocery bill is a lot bigger, and we’re selling food,” Shirk said. “And so we’ve noticed softening in our sales growth. But I think that’s not unique to us. Consumers are being more efficient with their spending, which makes total sense.”
So, to maximize output more efficiently, Beer Nuts is increasingly relying on automation – not to lower headcount, but because it’s hard to get heads in the door and keep them.
“If they don’t love the job, they’ll just walk off right then, which is surprising,” Shirk said.
Beer Nuts is not alone. There are factories across McLean County that are adding automation, said Sam Lewis, co-owner at the staffing agency PrideStaff in Bloomington. He works with a lot of employers in light industrial, manufacturing, and warehousing.
“One of my customers got one side of the wall at their factory is this automated robot that goes in with these arms and finds the tooling it needs and installs it in the machine. That used to take three or four people to do that,” Lewis said.
Retail, restaurants and hotels
Restaurants and retail can automate some tasks, like McDonald’s rolling out an app to speed up ordering and payment. But humans are still needed for many, many things.
At the Red Raccoon Games store in downtown Bloomington, owner Jamie Mathy said he feels lucky to have so little turnover among his 16 employees.
That luck is really a multipronged retention strategy. Red Raccoon raised wages by 12% last year to keep up with inflation, Mathy said. They added a simple IRA matching program and gave employees – even part-timers – five days of paid time off, well before it becomes required by state law in January. Plus, employees get store credit for every hour they work.
“We put in a bunch of different things over time to try and make it so they want to stay here, because there are employers in town I can’t compete with,” Mathy said.
Others in Bloomington-Normal are having a much harder time, including hotels.
The Holiday Inn in north Normal has around 45 employees, mostly part-timers. General manager Terry Stalsberg has his theories but no clear-cut answer why candidates and new hires are behaving so differently now versus earlier in his career.
“People aren’t showing up for job interviews, or they start and then they leave again right away,” Stalsberg said. “That happened to me in the past few weeks. I had two new hires on the front desk, and we did their paperwork – you know how time-consuming that is. We started training a guy on the first day. And the next day, he calls me and says he jumped the gun and says the job wasn’t for him. Shortly after that, I started the other guy, and he called me the next day and said he was taking a job closer to home.”
Stalsberg wonders what he should do when an applicant fails to show up for a job interview.
“I’m calling them to see where they’re at. Or texting them, ‘What happened?’ and not getting a response. I never would’ve done that before COVID. It’s like, if you’re not gonna show up for the interview, you’re probably not gonna show up for work. You hesitate doing that, because you don’t want to sound desperate. But it’s more out of frustration than anything, with what’s going on right now.”
The hotel gave employees what he called a “considerable increase” in pay last fall – an extra dollar or two an hour based on the position. That can drive up room rates, he said, at a time when the hotel industry is still trying to recover from COVID and in a market with a lot of hotels.
That push-and-pull on prices is being felt by other employers too.
At Great Harvest Bread Co. in Bloomington, the owners were able to pay workers more than the minimum wage prior to COVID. But not anymore.
One of the biggest challenges is the rising cost of ingredients, like wheat, sugar and olive oil.
“We try not to raise prices, but it’s very, very difficult when all of those pressures are on your main product,” said Terrie Reed, co-owner at Great Harvest.
Reed and co-owner Ricky Vitton said they’ve seen little turnover among their eight employees recently, relying on a consistent schedule, a stress-free work environment, and perks like three free loaves of bread every week to keep everyone happy.
Looking to the future
The Bloomington-Normal YMCA has 16 full-time employees and, during its summer peak, about 200 part-timers. The nonprofit takes a holistic approach to retention.
The YMCA tries to stay ahead of minimum-wage increases; it went to $14 an hour last July, and the state’s minimum doesn’t hit $14 until January, said chief operating officer Patrick Mainieri. They’ve recently launched an employee-recognition program driven by YMCA member nominations. And they’ve focused on the development of the character of their staff – many of them college-aged – aligned with the YMCA’s mission and core values.
“Youth are looking for that. Really, any employee is looking for that, in their employment spaces. Like, why are we here? And what are we doing? And why are we doing it? And building it into a space of structure and giving them the reasons why they're coming to work,” Mainieri said. “It’s not just a paycheck. The paycheck is the thank you for a great shift, right?”
At G3 Machining, a locally owned machine shop in Bloomington, co-owner Steve Knecht is less worried about current workforce challenges. He’s worried about the future.
“I’m in my mid-50s, and I’m considered a young machinist, because there really aren’t any that are coming up behind me. That’s a problem for our company, because my machinists who are my age – they’re looking at 5, 10 years before they retire. And I don’t have anybody to replace them,” Knecht said.
G3 has seven full-timers, including Knecht and his co-owner. They regularly turn down work because they don’t have the manpower do it, Knecht said.
It’s not like he hasn’t tried. He’s explored workforce-training options with several local schools and colleges, but they haven’t panned out. They even considered opening their own school at G3.
“As far as this manufacturing renaissance they talk about,” he said, “I think we should have started years ago to build a good educational foundation to have that be a real feasible future.”
