As the accelerating recovery in home building and remodeling fires up wood products factories across the U.S., managers are bumping into new challenges: a shortage of available employees, and uncertainty about health care costs attached to new hires. Also in the mix: work permit issues for immigrant employees, who make up many construction and remodeling crews, and man wood industry factory floors.
We've received a steady flow of inquiries from readers of WoodworkingNetwork.com about finding employees. Woodworking schools tell us their grads are spoken for by businesses long before classes end. Custom millwork and furniture builder Dovetail Gallery issued a press release on PRWeb.com seeking cabinetmakers as its business blossoms in 2013.
Bill McKinney, CFO at furniture manufacturer Lee Industries told CBS Radio News recently that his Hickory, NC company would hire more, but is having trouble finding candidates.
Indicative of the worker supply chain challenge: the construction industry added 48,000 jobs last month, the most since 2007. But there are spot shortages in a number of markets, as housing permits also rose 38 percent. Home completions, including all that flooring and cabinetry, are being held back by labor shortages, say some builders.
The New Home Construction Company president Kevin Carson told the New York Times last week that his firm will build 120 homes this year in northern California, up from 50 last year. But a shortage of labor – workers have returned to Mexico or moved into other markets - keeps them from expanding even further.
Forestry firm M.A. Rigoni, in Perry, FL, which grows and harvests pine trees, saw business improve in mid-2012 as lumber prices rose with the housing recovery. But Rigoni is relying on independent contractors, rather than new hires, to take up the slack as sawmills reopen and spur demand. Having reduced employment to 40 from a peak of 55, Rigoni business development manager Richard Schwab tells the Wall Street Journal he has about 40 contractors as work, rather than commit to new hiring.
Uncertainty about health care costs is also having an impact. Small businesses with 50 or more employees will be required to offer health insurance in 2014, or pay a penalty per employee. Businesses at the size threshold are weighing whether it is a better deal to provide health care insurance coverage, or pay the penalty. In some cases, businesses who are just below the threshold of 50 may elect to add independent contractors - as did M.A. Rigoni - and will remain below that size.
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