Posted on 7 July 2008

4 Factors Creating Utah Workforce Funk

There’s no question something interesting is happening with Utah’s professional/technical workforce right now, and I think there are no less than four competing factors at play any business-owner should be paying very close attention to:

  1. Real and Wage Inflation
  2. Intense Competition for Talent
  3. Corporate cost-cutting
  4. High Energy/Commute Costs

The hardest part to pin-down is that the economic indicators show a market that is schizophrenic. Utah’s high tech job market is part recessionary and part booming. There’s both signs of weakness, but signs of boom-cycle madness.

If there were ever a time to unveil the invisible hand and see what’s really going to happen to this economy over the next six-12 months, now is the time… those who navigate this juncture well stand to gain a lot of opportunity, while these massive icebergs of clashing forces might very well crush entire sections of our economy and workforce if we’re not paying close attention.

Real and Wage Inflation

The Fed won’t admit there’s inflation yet, even though everyone else is worried about it… but one trip to the grocery store tells you a dollar doesn’t go as far these days. This plays into issues 3 and 4, and is the driver for issue 2.

Bottom-line: If the same amount of money you made last year isn’t cutting it, talented people will demand higher wages for the same jobs they were doing a year ago.

If the company they currently work for won’t pay up, no problem, they’ll just move.

Intense Competition for Talent

As a recruiter, I use every tool I can find. The job boards, these days, are as silent and un-exciting as a Hillary Clinton rally in Payson. The war for top-talent has moved from remote, tactical operations using unmanned email probes and remote-controlled resume submittal to (continuing the analogy) hand-to-hand, street fighting. Candidates are being approached at every angle, from every recruiter, in very creative ways…. and they’re getting hired, too!

At the Blogger Dinner last Thursday, Steve Spencer quipped something like: This is just like the late 90s. It doesn’t matter if you can actually do any of the stuff on your resume, but if you have the right acronyms, you’re hired!

(And, yes, Steve’s company is hiring… tell ’em I sent ya)

Corporate Cost-Cutting

Client after client of mine has issued cost-cutting warnings. Several more companies are putting in-place hiring freezes, readjusting their priorities, laying people off or closing down all together.

This hyper-sensitive focus on costs can be unacceptable to a workforce already in high-demand.

One jobseeker for a Salt Lake-based IT Outsourcing firm told me last Thursday that his current employer has”implemented a new performance-based pay plan where you get a “very low base wage” and, if you hit certain quotas every day, you will get paid more.

The story goes that these employees, if they are industrious little busy bees, can earn even more than they have been making, but the employees don’t quite see it that way.

    “Its a joke,” my jobseeker friend told me. “I’ve done the math. It is impossible to make anything close to what I have been making. I am outta here.”

There’s bound to be losses when a company needs to refocus. A recent article by Tiffany Hsu in the Baltimore Sun explains this very well:

    “It costs a lot to let someone go,” said Don McNamara, president of Heritage Associates Inc., a management consultant company based in Laguna Niguel, Calif. “So we’ve got to circle the wagons and pull in a little bit.”

    Businesses, he said, can cross-train employees in multiple roles to boost productivity and restructure to remove inefficiencies…. but employers can’t cut too many expenses and perks without risking driving workers away.

    “You’ve got to be sensitive to your people and make sure morale isn’t one of the things you cut,” McNamara said. “If this comes as a surprise to them, they might be tempted to update their resumes at another company.”

High Energy/Commute Costs

Even thinking about high gas/energy prices makes me exhausted, but the simple fact is we are receiving regular calls and updates from our candidates seeking more commute-friendly work options, telecomuting, shorter commutes, or other benefits to offset the incredible rise in fuel costs this last year has seen. For once, the State has taken a lead here, generating (I predict) pressure on many new fronts to allow employees to have more control over when, where and how much they work.

On the flip-side, a lot of people who otherwise want to keep their current job are interested right now in part-time, flexible, contract-based work options too. That is an unforeseen consequence of these higher prices.


At the end of the day, companies are asking their employees to do more with less, while these same high-demand employees are not afraid of feeling out their options and making a more lucrative move if needed.

I fear, for companies too cost-conscious, this will become a race to mediocrity unless they very creatively examine their work demands, and be very open and honest with their employees. Find out what they need/want and even while cutting costs, you can make work fun and, heck, maybe even more productive.

3 Comments For This Post I'd Love to Hear Yours!

  1. Utah IT Services Says:

    Really good insight!

  2. Robert Merrill Says:

    Thanks! What specifically did you like?

  3. LayZ Daisy Says:

    A well written blog. I think this also applies to the rest of the country.

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    […] right :p).  Such is the case with Utah Tech Jobs’ Robert Merrill’s recent post titled 4 Factors Creating Utah Workforce Funk.  From the […]

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