ECONOMIC DEVELOPMENT - Labor 2001

Labor Market Conditions in Waushara County

February 13, 2002

Gary Green, University of Wisconsin-Madison Extension

Christopher Mayhew, University of Wisconsin-Madison

Patrick Nehring, University of Wisconsin-Extension Waushara County

This project was supported by the Waushara County Economic Development Corporation. We appreciate the assistance of Rosie Trochinski and several board members of the Corporation who helped with administering the employer survey. Finally, we appreciate the assistance of employers and residents in the county who participated in the study.

EXECUTIVE SUMMARY
Skip Executive Summary

Labor market conditions in Wisconsin are changing rapidly and employers are requesting information on the skills of the workforce, labor supply, wages and benefits, and the effects of technology in the workplace. In response to a request from the Waushara County Economic Development Corporation, the University of Wisconsin-Extension conducted a study of labor market conditions in Waushara County during the summer and fall of 2001. The purpose of the study was to examine the existing and anticipated supply of and demand for labor in the county. Data for the study are drawn from two sources. To assess labor demand, we conducted a mail survey of 158 employers, including manufacturing, retail, service, and government employers. To assess labor supply issues in the region, we conducted phone interviews with 300 Waushara County households. A similar study was conducted in 1996.

Employers in Waushara County are finding it slightly easier to recruit qualified workers. Forty-three percent of the employers reported it was difficult, compared to 55% in 1996. Five years ago employers had the most difficulty hiring unskilled workers, but today there appears to be much more demand for skilled workers. At the same time, employers tend to rate the importance of "soft skills," such as honesty, integrity and punctuality much higher than some of the "hard skills."  The data on the supply of labor suggests that few part-time workers are looking for full-time work, and relatively few full-time workers are searching for jobs. We do find, however, that a significant number of commuters would be willing to work locally if they could find a job with comparable wages and benefits.

There appears to be a great deal of flux in the local labor market. Employers report a relatively high rate of turnover (19.6%), due primarily to resignations. At the same time, a growing number of employers in the region are laying off workers. Approximately one-fourth of the employers had laid off employees in the past 12 months, with an median number of two workers being laid off.

Employers recognize the growing importance of benefits in attracting and retaining qualified workers. About one-half report either making some changes in their benefit package over the past year, or anticipate making changes in the next year. Approximately 53% of the employers report that benefits are equally important as wages in attracting good workers today. Waushara County employers also have raised wages in response to the tight labor market. The average wage increase in 2000 was 6.8%, and employers project a 5.7% increase for 2001.

TABLE OF CONTENTS

• List of Tables
• Introduction
• Regional Context
• Characteristics of Employers
• Vacant Positions and Recruitment
• Training
• Retention
• Benefits and Wages
• Commuting
• Work Status
• Labor Force Participation
• Summary and Conclusions
• Appendix A: Waushara County Household Survey
• Appendix B: Survey of Waushara County Work Establishments

LIST OF TABLES

• Table 1. Past, Current, and Anticipated Average Employment Levels Among Employers
• Table 2. Average Percentage of Workforce in Age Groups
• Table 3. Average Percentage of Workforce in Racial/Ethnic Categories
• Table 4. Methods Employers Use to Recruit New Workers
• Table 5. Job Seeking Methods of Workers
• Table 6. Current and Anticipated (One Year) Vacancies in Waushara County
• Table 7. Employer Pre-Employment Screening Techniques
• Table 8. Employer Ratings of Importance of Employee Skills
• Table 9. Types of Training Received by Workers Last Year
• Table 10. Areas of Planned Employee Training in Next Two Years
• Table 11. Education and Experience Required for Various Positions in Waushara County
• Table 12. Benefits Offered by Waushara County Employers
• Table 13. Benefits Received by Workers Residing in Waushara County
• Table 14. Employer's Views of Benefits and Wages
• Table 15. Entry Wage, Maximum Wage, and Current Employment Among Waushara County Employers
• Table 16. Reasons Given for Wanting to Change Jobs
• Table 17. Jobs Desired by Respondents Searching for Work
• Table 18. Reasons Given for Working Part-Time
• Table 19. Satisfaction With Current Primary Job
• Table 20. Reasons for Unemployment

INTRODUCTION

In response to a request from the Waushara County Economic Development Corporation, the University of Wisconsin-Extension conducted a study of labor market conditions in Waushara County in the summer and fall of 2001. The purpose of this study was to examine the existing and anticipated supply of and demand for labor in the county. A similar study was conducted in Waushara County in the winter of 1996-1997. We will examine how conditions have changes in the past five years whenever possible.

To assess labor supply issues in the region, we conducted phone interviews with 300 Waushara County households. The interviews were conducted at the Regional Development Institute at the University of Wisconsin-River Falls. Each interview lasted approximately 10-15 minutes and obtained information on the individual's job status, job search strategies, education and training, etc. See Appendix A for a copy of the questionnaire used in these household interviews.

Data for the study are drawn form two sources. To assess labor demand, we mailed 550 surveys to every business in Waushara County. A total of 158 surveys were returned for a response rate of 28.5%. Although the response rate is a bit low, it is not uncommon for employer surveys. Responses were received from businesses in all parts of the county and respondents ranged in size for self-employed individuals to employers with more than 100 employees. A representative number of responses were obtained from most categories of businesses, including agriculture, forestry, mining, construction, manufacturing, transportation, wholesale trade, retail trade, finance, insurance, real estate, services, and public administration. The surveys obtained information on characteristics of the establishments, vacant positions and recruitment efforts, training, retention of employees, and benefits and wages offered in the firm. See Appendix B for a copy of the questionnaire used in these interviews.

REGIONAL CONTEXT

Waushara County is located in the Fox Valley Wisconsin region. The region has a diverse economy, ranging from wholesale foods to the paper products industry One of the major influences is the proximity to the Appleton-Oshkosh-Neenah metropolitan statistical area (MSA). The region has experienced a 11.3% growth over the past decade, higher than the average for the state. The labor force participation rateC75.3%Cis above the state average (Wisconsin Department of Workforce Development 2001). The population in the region tends to have a larger population of older workers, which may limit the labor supply growth in the future.

Another key influence on the supply of labor in the region is the large number of workers who commute to surrounding areas for employment. Fond du Lac County has the largest number of commuters in the region, followed closely by Outagamie and Calumet Counties. The region exports 37% more workers than it imports.

Job growth in the Fox Valley region has been similar to the state average over the last five years. The growth in the region was not concentrated in a single sector, but was widely distributed throughout the economy. Growth in the construction and mining sector was especially impressive with a 32.7% increase over the last five years. The three largest industry groups in terms of number of jobs are retail trade, non-durable, and durable manufacturing.

The per capita income in the Fox Valley region is below the state and national average, and per capita income grew at a slightly lower rate in the region over the past five years than the state or national average.

The total population in Waushara County grew by more than 1750 people (9.2%) during the decade of the 1990's. The growth was spread relatively evenly throughout the county. Wautoma and Leon experienced the largest growth. Waushara County has the lowest labor force participation rate in the Fox Valley region and the unemployment rate has been slightly higher than the state and national average for much of the decade of the 1990's. In November of 2001, the unemployment rate in Waushara County was 4.3% , the highest in the Fox Valley region.

CHARACTERISTICS OF EMPLOYERS Key Findings:

• Employers have increased their workforce in the last five years, but they do not anticipate any further increase.
• An increasing number of firms are hiring part-time workers.
• About 6% of employers hired immigrant workers in the last five years.
• Fourteen percent of the workforce is over age 55, suggesting a relatively large number of retirees in the next few years.

Among the 158 employers interviewed, 83% a for-profit organizations, 5.2% are government organizations, and 5.9% are non-profit organizations. Most (77.1%) firms are independently owned, 9.8% own branch firms, 6.5% are owned by a multi-establishment firm, and 6.5% are locally owned but franchised to offer "brand name" products.

We obtained information on the past, current, and anticipated employment in the firm, and different types of employment: full-time, part-time, temporary/seasonal, and contract workers. See table 1 for the average for each of these categories. The size of the firms in the sample ranged from 0 to 494 employees with an average of 11 employees. Employers have increased the size of their workforce from five years ago, and expect to maintain the same number of full-time and part-time workers in the near future. Over one-half (60.9%) of employers have some part-time workers. The percentage of firms using part-time workers has increased over the past five years, when about 41% employed part-time workers. The number of firms hiring temporary workers has increased. Currently, about one-fourth (26%) of the employers hire some temporary workers, while five years ago 18.9% did. About 17% of the employers have contract workers today, while 8.8% did five years ago. Approximately 45% hired seasonal workers over the past five years and 50% of employers reported that they retain the same seasonal people year after year.

Table 1. Past, Current, and Anticipated Average Employment Levels Among Employers

	Five Years Ago	Current	Anticipate-One Year
Full-time	9	11	11
Part-time	2	4	4
Temporary/Seasonal	4	5	5
Contract	1	1	1

Waushara County employers are relying increasingly on staffing or temporary agencies for hiring. Over the past five years, about 9% of the employers report they have used a staffing or temporary agency. A relatively small proportion (13.2%) of the employers report that they have hired temporary employees as a recruitment method for locating permanent employees.

Recent census data suggest that immigration in the Midwest has increased dramatically over the past decade. We were interested in assessing the extent to which employers in the region were hiring immigrant workers. Over the past five years, 6% of the employers report that they have hired immigrant workers at some time. Among those that have hired immigrant workers, the median number is only two workers, although one employer reported hiring 125 immigrant workers. Fewer (2%) employers have hired any guest workers (defined as someone with a H1 visa) during this period. Overall, it does not appear that Waushara County has experienced as much immigration as some other parts of the state.

Several projections suggest that a relatively large percentage of the labor force will retire in the next five years or so, as the baby boom begins to reach retirement age. We asked each employer to identify the percentage of their workforce in various age categories (table 2). Overall, we find that the majority of residents are in prime working age. Approximately 14% of the workforce is older than 55 years old, which suggests the potential of a relatively large number of retirees in the next few years.

Table 2. Average Percentage of Workforce in Age Groups

We asked employers to identify the racial/ethnic composition of their workforce (table 3). The workforce in the Waushara County area is predominantly white, but with a growing number of minority workers.

Table 3. Average Percentage of Workforce in Racial/Ethnic Categories

VACANT POSITIONS AND RECRUITMENT

Key findings:

• Lack of skills is the largest problem employers report in finding workers.
• Job centers are becoming increasingly popular to search for employees.
• The largest number of anticipated vacancies for employers is in technical positions.
• There is a good match between how employers search for workers and how workers search for jobs.
• Basic work skills such as honesty, punctuality and motivation are most valued by employers.

Approximately 43% of the employers report they are having difficulty recruiting qualified workers. The employers report problems hiring a variety of workers, and there is much more emphasis on skilled workers, especially those with job training and experience. When asked what they consider the most important reason for their difficulty, employers were most likely to report that the problem was the applicant's lack of skill necessary for the position.

We asked employers to identify the position that had been vacant the longest. Employers are most likely to report that auto technician positions and sales positions had been vacant the longest. The auto technician positions were vacant for over a year, and the sales positions had been vacant for an average of 36 weeks. Why were these positions vacant? In most cases, it was due to the previous worker resigning.

How do Waushara County employers recruit new workers? We asked employers to identify all the strategies they use to recruit new workers. In table 4, we report the responses to this question. Employers are most likely to use newspapers, rely on current employees, and walk-ins to recruit new workers. The strategies for searching for workers have not changed much over the past five years. However, there has been a significant increase, from 26% five years ago to 36.9% today, in the number of employers using the Job Center to search for workers.

Table 4. Methods Employers Use to Recruit New Workers

How do workers search for work? In table 5 we report the methods workers reported having used to find a job. Workers are most likely to make direct contacts with employers, use the want-ads, or ask friends or relatives. There seems to be a fairly good match between how employers search for workers and how workers search for jobs. It should be pointed out that many Temp agencies use the Workforce Development Center/Job Center to find open positions for their employees/clients.

Table 5. Job Seeking Methods of Workers

Employed residents were also asked if they were actively searching for a new job and, if so, how long they had been looking. About 10% of the workers were searching for jobs. Most had been actively looking for at least a month.

In table 6, we present a list of the current and anticipated (one year) vacancies among the employers interviewed in this study. The largest number of current vacancies is in the machine operation occupations, but the largest number of anticipated vacancies is for technical occupations. We also include information on the percentage of employers that report that various positions are very difficult to recruit. So, for example, 28.6% of the employers report that computer specialists are very difficult to recruit in this labor market.

Table 6. Current and Anticipated (One Year) Vacancies in Waushara County

We next asked employers whether they use a variety if pre-employment screening techniques (table 7). Employers are most likely to check references. Reference checks are fairly standard among employers; other pre-employment screening techniques are used much less frequently.

Table 7. Employer Pre-Employment Screening Techniques

There is substantial evidence that the skills demanded by employers are changing rapidly. To understand what skills are most valued by employers, we asked them to evaluate how important a variety of attributes were in their hiring decisions (table 8). There were three levels of importance: very important, somewhat important, and not at all important. Although employers value many of the standard skills, such as reading, writing and math, there appears to be much more emphasis placed on basic work skills, such as honesty, punctuality, quality, and motivation.

Table 8. Employer Ratings of Importance of Employee Skills

TRAINING

Key Findings:

• A vast majority of employers provide on-going training and skill development for their employees.
• The training likely to be received by employees differs from the training they expect.
• Employers do not require a college or technical degree for many skilled positions.

Given the technological change there is a growing need for job training. To assess how much and what type of training Waushara County employers offered we asked a series of questions regarding their training activities. Many employers provide some type of formal or informal training to new hires. About 37% of the employers report they regularly offer formal training to new hires. On average, a new hire receives 34 hours of formal training. New hires also tend to receive informal training in many (54%) workplaces as well. About one-third (30.5%) of the employers reported that they provide new hires with a mentor. Many employers also provide new hires with some type of orientation to the workplace. Twenty-seven percent provided a formal orientation, with an average of 8 hours (median=4) of orientation, and over one-half (55.5%) gave new hires an informal orientation.

Similarly, most (84.8%) employers report they provide on-going training and skill development in their firm. They are most likely to offer job specific skills for this type of training. On average, employers provided some formal training to more than one-half of their employees and spent an average of $1,724.27 (median=$325) on training last year.

Employees were asked about the types of training that they have received from their employer in the past year (table 9). About one-half (44%) of employees reported receiving some type of training in the past year. The most common types of training received were safety, and product and equipment training and computer training.

Table 9. Types of Training Received by Workers Last Year

Waushara County workers were also asked about their future job training goals. About 41% of the workers plan to obtain job training in the next two years. The types of training most likely to be pursued by employees in the next two years were formal education and computer training.

There is a difference between employee=s expectations of future training and the types of training they are likely to receive. In table 10, we report the types of training workers plan to obtain during the next two years. Employees were more optimistic about receiving formal education and computer training. In contrast, employee's product and equipment training greatly exceeded their expectations.

Table 10. Areas of Planned Employee Training in Next Two Years

In table 11, we provide descriptive information on the educational and experience requirements for various positions in Waushara County. College and technical degrees are not required for most service and labor positions in Waushara county. Surprisingly, employers do not require a college or technical degree for many skilled positions.

Table 11. Education and Experience Required for Various Positions in Waushara County

RETENTION

Key Findings:

• The turnover rate in Waushara County is relatively high compared to the national turnover rate.
• One-quarter of employers laid off workers in the last twelve months.

The tight labor market in the late 1990's has put additional pressure on employers to retain good workers. We asked employers whether they had difficulty retaining workers in the labor market. Forty-three percent of the employers reported difficulty. The turnover rate in the County was 19.6% in 2001, which is relatively high compared to the national turnover rate of about 12%. The tight labor market may be a factor in the turnover rate as workers change jobs to obtain higher wages. Most of the vacancies were due to resignations. Among the employers in the study who had some turnover in the last year, the average number of resignations was six, versus about one retirement and about two terminations. Thus, about one-half of the turnover is due to resignations.

A growing number of firms in Wisconsin were laying off employees over the past six months due to the slowdown in the economy. Approximately one-quarter of the employers we interviewed reported that they laid off employees in the past twelve months. The median number of employees laid off was two.

The absentee rate among Waushara employers was 4.4% in 2001. Among the possible reasons for absenteeism, employers were most likely to report that illness and family personal conflicts were the problems.

BENEFITS AND WAGES

Key Findings:

• Of the benefits offered by employers, Waushara workers agree that health insurance is the most important.
• Employers are increasingly recognizing the importance of benefits in attracting workers.

Benefits

Employers were asked to report whether they provided a number of benefits to workers in their firm. Table 12 summarizes these findings. In table 13, we report the benefits received by workers living in Waushara County. The percentage differences between the two tables can be attributed to a few factors. Because of the high rate of out-commuting in the county, workers may be receiving different benefits than are offered by local employers. Also, small establishments are not as represented in the employer survey, but workers in small establishments are. Large establishments are more likely to provide better benefit packages, which may contribute to the differences.

Table 12. Benefits Offered by Waushara County Employers

Table 13. Benefits Received by Workers Residing in Waushara County

Over one-half (57%) of Waushara County residents have health insurance through their employer. Approximately 44% have some form of pension plan. Employees were asked which one job benefit is most important to them. Most (70%) Waushara County workers said that health insurance is the most important benefit to them.

Overall, employers are most likely to report that wages and benefits are equally important, but many more say that wages are more important than benefits than the reverse (table 14). This finding probably reflects the tendency to compete for workers in a tight labor market through increased wages.

Table 14. Employer's Views of Benefits and Wages

Many employers are recognizing the growing importance of benefits in attracting good workers. Over one-half (51.7%) report that their benefit package has become more important in attracting workers over the past five years. Many (38%) have made some changes in their benefit package and 11% anticipate making changes over the next year. About one-third (62.5%) of the employers require new employees to work for a specified time before receiving benefits.

In addition to the standard package of benefits offered to workers, we looked at several other work incentives. We asked employers if they provided flextime-allowing workers to adjust their work schedule. Thirty-four percent said they did allow flextime. Only 22.4% of the employers reported they offered job sharing at their establishment. Few (6.5%) of the employers offer tele-commuting or other options that allow individuals to work out of their homes on a regular basis.

Wages In table 15, we report the entry and maximum wages for various positions in Waushara County. Tight labor market conditions over the past five years have led to large wage increases in the region. The average wage increase among employers for 2000 was 6.8% and they projected a 5.7% increase for 2001.

Table 15. Entry Wage, Maximum Wage, and Current Employment Among Waushara County Employers