Here’s a column I wrote for the TAB about how a very tight labor marking may impact Newton businesses in 2019. And here’s one excerpt…
The good news is local business is booming. Generally speaking, our merchants, restaurants owners and many other businesses operating in our village centers and commercial districts report that 2018 was a good year.
The bad news is that an alarmingly large number of those same employers say their ability to be successful in 2019 will largely hinge — not on their ability to attract enough customers — but their ability to find enough employees.
“Newton’s ‘hiring crisis’ weighs heavily on local businesses.”
Newton’s crisis? Unemployment is under three percent in Maine, New Hampshire and Vermont. I have business interests in two of those states and finding good employees is a life and death struggle for small business- and these are in locales with ample, reasonably priced, housing.
Nationally we are at 4%, a low number historically. Everywhere is having a ‘hiring crisis’.
A red herring, Greg.
Not a red herring – Newton’s lack of frequent and reliable public transportation and affordable housing are part of the problem.
from Newton’s Economic Development Action Plan, pg. 10:
“The issue of transportation related to economic development was discussed in numerous interviews, public engagement sessions, and within previous research.
Transportation issues of congestion, insufficient public transportation options, lack of parking in some areas, and
areas of unsafe bike and pedestrian infrastructure came up as a barrier to workforce and customer attraction and
ultimately a barrier to business attraction. …. Newton struggles to compete with other nearby localities who have invested in necessary infrastructure and other systems to deal with transportation issues.”
The report also found 78% of Newton’s employees commute into the city and that ‘Average earnings per job in Newton are slightly lower than the state average (roughly $72,000 compared to $78,000), and slightly lower than average earnings for the MSA ($84,000).’ (MSA – Boston Metropolitan statistical area) pg. AC-25
full report: http://www.newtonma.gov/civica/filebank/blobdload.asp?BlobID=93416
I have a little bit of business experience. I’ve never had trouble attracting talented people to work for me. Here’s my secret… I pay them well.
It’s not to say these other issues don’t matter. Housing and transportation are critical factors. But the most important factor in hiring and retaining workers is compensation level.
The American worker has been struggling mightily for decades. While not stagnant, wages have not kept pace with economic growth. And the trend at a lot of smaller businesses has been to replace paid workers with unpaid interns. Pay people a good wage and you’ll have plenty of job applicants. Just my opinion.
I think Mike pretty much hit the nail on the head.
@Mike that alone is no longer enough. Employees today look for a certain quality of work-life along with their pay. They want restaurants nearby, they want to gain friendships, be social, learn, experience a challenge, and have career growth.
It’s not that pay is unimportant, it is. But it’s a piece of a much larger puzzle. That’s why developers are creating properties that offer things like yoga studios, beer gardens, softball teams, curated retail (including restaurants), outdoor seating, and food trucks. It’s why TripAdvisor built a bar, gives away food (snacks and lunch), has an on-site gym, and offers transportation.
Chuck – This description sounds like Google from the early 2000’s with the ping pong tables. Most people want to go to a job where there’s a positive climate (the workplace is well run and they are treated with respect) and it pays well and has decent health benefits. Then they want to go home to attend to family responsibilities. Being able to get to and from work without it being a tortuous experience is also high on the list.
If you think think this is coming from an out-of-the-touch boomer, it’s not – it’s coming from numerous conversations with three 30-somethings I happen to know very well. They’ve all left jobs because one of these elements was missing, and often consider the commute when looking for a new job.
Respect and validation for a job well done can go a long way and is too often missing in the 2019 workplace. My advice is to forget the beer gardens and yoga studios and get back to basics when thinking about what makes an attractive workplace.
TripAdvisor and other companies that offer those amenities do it because they don’t want their employees to leave. Free meals and free gym means they can work longer hours. I’ve had family members that worked for Apple and LinkedIn and the work environment was toxic because there was no work/life balance. Everyone was miserable, but hey, they had free food.
Greg,
With all the proposals for housing and development you cite, it seems the solution to the housing part is underway. There are over 200 rentals on the market in Newton today – ranging from studios to much larger with 2 and 3 bedrooms renting for $2300 to $2800 and in the spring there will more than likely be more.
Attracting and keeping workers depends on much more than housing including as you point out, traffic, inadequate public transportation and insufficient parking. Factors that others have pointed out are just as important such as:
Mike, “compensation level,”
Lucia, from Newton’s Economic Plan, “Newton struggles to compete with other nearby localities who have invested in necessary infrastructure and other systems to deal with transportation issues,” and “Average earnings per job in Newton are slightly lower than the state average” and
Jane, “Most people want to go to a job where there’s a positive climate (the workplace is well run and they are treated with respect) and it pays well and has decent health benefits.”
The issue that stands out is Newton’s high economic level and cost of living vs Newton’s lower than average compensation, poor transportation infrastructure and insuffient parking.
@Terry: If you break your arm it doesn’t make it less of a problem if other people have broken arms too. Yes, a hiring crisis exists across many parts of the region and nation. That doesn’t make it less of a problem for the Newton based employer who is trying to keep his or her restaurant open, change the sheets at a hotel or is looking for a lab technician, programmer, sales term or VP of marketing. I’m worried about our employers here and there are things we can and should do here to make us more attractive and available to workers.
@Mike: Absolutely compensation matters. But among the employers who are struggling to hire those looking to fill high-salary tech and life sciences jobs. For those workers and employers, it’s about providing the needed housing, fixing transportation and adding amenities, not salaries.
@Bill: Given that you are running for City Council, I suggest that you take a deeper dive into understanding the issues that really are impacting our businesses. It’s naive to dismiss this simply as a compensation issue.
Greg– Bill was agreeing with me. And I had acknowledged there were other relevant factors. I believe compensation is the main attraction for workers though. Not the only one. Just the one that matters most.
Compensation matters but, again, it’s over simplistic to suggest it’s that simple: Many employers are having trouble filling well-paying jobs. Housing matters. Transportation matters. Xenophobic immigration policies matter. The opioid crisis matters. Health care matters. Etc. My point to Bill is if he want to be a city councilor he needs to spend time talking to businesses which is not something I’m aware that he’s doing.
@Jane, yes, respect and validation are important factors, but I’m speaking from a position of having several conversations with area developers and having done a lot of research into the issues. Developers are now looking at their projects not just in terms of providing space to employers, but in terms of how to keep employees engaged over the long-term. In Burlington, there is a development called “The District’ which includes a few restaurants, as well softball leagues, beer gardens, etc. People are now living their lives around work, not around home, so they stay and have dinner or a beer. They play games with their work friends, etc. It’s a community.
It’s this basic idea that has helped WeWork become the largest landlord in New York City. It’s not just about dividing up space and putting people in desks, it’s about building a community. Amenities are a big part of that. I was in a WeWork yesterday where Merck now has its Boston office. Clearly they could have built their own space, but they wanted to be part of a bigger community where there are gathering points and energy. Food, amenities, clubs, etc. are all central to that.
‘People are now living their lives around work, not around home, so they stay and have dinner or a beer.’ Great until you have a family or lose your job. We already have a society that discriminates against mothers, fathers, & older people, let’s not make it worse. Put the money into transportation and affordable housing.
I agree with Greg that Bill Humphrey should develop more relationships in the business community. But he’s already got the “chops” to make a terrific City Counselor. When every sitting member of the City Council got the issue of cannabis wrong, Bill Humphrey got it right. He was here on V-14 encouraging others to respect the vote [that legalized cannabis]. His position was confirmed by the voters in November. If the City Council had taken Bill’s advise there would be more business, jobs, and revenue coming to Newton right now.
Greg-
There are 24 Newton city councilors
and 8 school committee members that
aren’t happy with their pay or lifetime health benefits. Could you please CC this article to them?
The wages, even part time are most likely higher than the current councilor compensation but I doubt you’ll get a pension or lifetime healthcare benefit
Mike Striar
Bless your heart. If you pay someone well, treat them with respect and provide growth for them, they will go the extra mile for you – always. The dirty little secret is there are some small and large businesses
owned or run by cheapskates in liberal Newton.
Gen X’s and Millenials have wisely learned the lesson that many companies look at their employees are part of their debit sheets instead of as assets. Most of them either know their value or they figure it out quickly.
As a result, they learn the skills they need to learn at their current workplace and move on to better jobs with better pay and benefits before they are disposed with. Most of them
also learn pretty quickly that loyalty has little value to your employer, so they save that for their families, friends or having neither, their pets!
“People are now living their lives around work, not around home, so they stay and have dinner or a beer. They play games with their work friends, etc.”
This sounds like a nightmare for anyone who has kids, elderly parents, or any myriad of other issues that need to be dealt with at home. Who’s taking care of the kids? I hate to say it, but most likely it’s the women. I was a fairly tolerant mother/wife, but I probably would have strangled my dear husband if he’d come home late because he’d been spending time after work at a beer garden and left me to bathe the kids and get them to bed. Seriously. Whatever happened to real life?
As for the employers who pay a decent salary and still can’t retain employees – maybe they should look closely at the culture within their business, and I’m talking about the culture between 8am-6pm, not the after hours activities. A lot of people leave “good” jobs because they’re simply miserable places to spend that many hours of a day.
“People are now living their lives around work, not around home, so they stay and have dinner or a beer. They play games with their work friends, etc.”
I don’t know ANYONE who lives life like this and I’m a millennial. I need to come home after work to tend to my family and my expectation is that my husband does the same – and he does, as does everyone else in his workplace. (He is in healthcare) Most people I know treasure their work-life balance and their time with their family.
@jane I interviewed a woman who works in a tech company in Needham. She told me that her life revolves around her office. This includes things like daycare, food shopping, daily errands (CVS), lunches, etc. For her it’s not about the after-work beer garden, but it may be about getting in a little early or, alternatively, shifting her time until it’s a little later.
Another person I spoke with in the same company is young and unmarried. He comes in early some days and goes fishing on the Charles before work. I spoke with a young father who commutes from Charlestown and does his clothes shopping on Needham Street because it’s easier than doing that near home.
When I’m in the TripAdvisor space for early or late meeting, I see people in the on-site gym. Though, there are others I know who maintain their own off-site gym memberships out of preference.
This is what is meant by quality of life.
TripAdvisor sounds like a nightmare, not to mention a place where you’d put on a few pounds. A bar at work? Good grief. And to think people complained about a few pot shops over 18 sq. miles. 😉
None of these amenities address the basic issues facing employees – salary, healthcare, home/work balance. An employee’s lifestyle changes over time. Young women/men whose lives revolve around the office? Wait until they have school age kids and they have to drop them off before work and rush out of work to arrive at the after school program before it closes. Time for chores? That’s called the weekend. Not to mention, what do these people do when they change jobs? Move?
If a workplace wants to attract and retain its employees, it needs to respect the changing lifestyle of its employees as they move from being footloose and fancy free, to being a parent, to being the one who cares for a parent, to one who’s nearing retirement. Workplaces that develop a positive climate within the workday and allow for a reasonable home/work balance will retain employees; those that don’t will lose employees and complain that it’s because there aren’t amenities nearby.
I don’t see enough energy going into making the actual workplace a positive place to be and/or the work itself manageable. Word gets around in this day and age; job hunters have easy access to information about the culture at various places of employment – if the boss is a jerk, you can bet they know it before they apply for the job. If the applications aren’t coming in, then maybe it’s time to give that some thought.
Good for the guy who goes fishing before work. I like that one.
I’ve said my piece with this thread so carry on!
@Jane
There has been a sea change in the
employment game since our generations started out. The near-greatest generation baby boomers have passed their entitlement genes on to their kids and the job market is dealing with the seismic fallout. I know different small and large business owners who have been driven to distraction by the needs, demands and in some cases accommodations that these employees have come to expect in order to be hired or retained as productive or even employable help. The social media revolution has produced a generation of young people that have deplorable communication skills. There are new job market entries that have graduated from 4 years of college without the ability to read and understand instructions, write intelligibly, or to focus on a simple task to its completion.
The instant gratification of the internet and Facebook profiles with little context has created a generation of young people with no appetite for hard work, nor any appreciation for the incremental decades long learning and dedication to a career or craft that leads to mastery, fulfillment and self growth.
If you don’t provide a stimulating, differentiated, varied cornucopia of work environments for these employees to combat their inability to
start and complete a project or even a task, you will lose them quickly.
The reality is that the employees that TripAdvisor works to hire (and Google and Microsoft and Facebook and…) are engineers in their 20’s. Most don’t have kids. Most don’t want to live in Newton. You will find a lot living Cambridge and Boston. TripAdvisor offers gyms, pubs, and cafeteria because this is what their employees want, and it is what their competitors offer. Contrary to Greg’s theory, I don’t think the cost of Newton or Needham housing is a big negative. For the few that live close to work, it may be a positive. Remember they might be in San Francisco or Seattle instead.
These are dream jobs for many kids. I have heard (but need to verify) that the pay for engineers starts at $120K.
That’s never been “Greg’s theory” in any way. It’s not the price of housing that is the deterrent to many young well paid tech and life sciences workers. It’s the type of housing.
Not everyone wants to live in a house with a garage and a yard. That’s why we need the mixed use apartments that are surrounded by lots of amenities. That’s why we need the Northland project. That’s why Washington Place and Austin Street matter. That’s why Riverside matters.
We need more affordable housing but we also need more market rate housing that aren’t necessarily single family homes.
Jeffrey,
In general yes, the STARTING pay is 120k for smart engineers from a top 20 school. In general, they can afford to live (and work) wherever they like. Those without kids would unlikely choose Newton, but when kids arrive they mostly to the inner suburbs. By which time their salary will hover around 180k for one income.
So much of job growth has been driven by these folks (young, finance, tech, biotech) and their top choice for work/life balance is NYC, SF,Boston… not Newton
The sad thing is that as a country, we have fallen behind in educating our children for these types of jobs.
Jeffrey,
For those not familiar with the requirements needed to get that starting salary: .. its hard, its very hard.
Not everyone can do it. Imagine I force someone who has zero artistic ability to paint a new picture, it could take years of practice and no matter how hard they try… the picture still sucks because you don’t have an artistic mindset.
Engineering is similar a problem, you need a logical/methodological mindset. You need to have extreme patience and a very logical mindset to get those starting salaries. It’s not always a matter of education
Budgek. Just so we are clear on where we disagree. My “theory” is that over the last 50 years the US has fallen behind on technical education. Your “theory” is that our education has not changed, rather people in other countries have developed more logical/methodological mindsets and more patience?
Jeffery,
I think its more a ‘culture issue’. Engineering requires long stretches of focus, zero subjectivity. Its either right or wrong. This conflicts with
– helicopter parenting
– instant gratification
– medals for showing up
– not forcing children to do things they don’t like
– subjective grading
The American culture is geared toward independent thinking, team work, free thought and presentation skills… which unfortunately doesn’t come in handy for engineering tasks
@Jeffrey Pontiff & @bugek-
You both provide great insights to
aspects of employment issues.
Well done.
Greg: And those communities that do have a large mix of available housing also have low unemployment rates and difficulty finding workers. The answer to every problem is not repeating the mantra “MORE HOUSING”.
Some problems do not lend themselves to macro/structural answers.
Can you name a community that you feel is doing a great job in building a large mix of market rate and affordable housing that does not have a problem with hiring?
How about communities that have existing stock? They also have the hiring problem. Please point to your model community.
@Terry I beleive you are asking the wrong question.
Housing in Greater Boston is growing too slowly to meet the demands of a booming economy. Since 2010, the Metropolitan Area Planning Council’s Metro Mayors communities have added nearly 110,000 residents and 148,000 new jobs while permitting only 32,500 new housing units. Prices and rents have risen well above the increase in average income. And with the net growth in population through 2030 projected to come from millennials and seniors, there will be a large increase in demand for smaller housing units.
Boston and Cambridge have a done a good job issuing new building permits but the suburbs — including Newton — haven’t.
If we want to grow our commercial tax base here by attracting new employers here (and retain the businesses we have) we need to provide the housing that every site selector takes into consideration when choosing a location or considers when renewing a lease.
Terry,
There is no model community in a capitalistic environment because of the laws of supply and demand, human nature and American culture.
Excellent schools
Low crime
A good supply of affordable homes for the middle class
Low unemployment
It is impossible to have all 4 in a CITY in the united states.
I think the only time this may have existed in Newton is 1950 when the GIs returned from war and housing was built for them… a very unique situation
Not looking for a model community. Just looking for a place-not an island- that built itself out of a large scale hiring crisis.
All the single professors with whom I work, live in Boston. The professors with families live in the suburbs. It has nothing to do with building permits.
The poor zoning of Cambridge and Boston has consequences. Some families like the idea of green space and yards, streets that are not littered with parked cars (sorry for bring it up), the absence of front yard chain linked fences, living next to other families, and having neighbors who don’t rotate out every September. Newton, Cambridge and Boston don’t have to offer everything to everybody. Its OK.
Chuck,
Curious, do you happen to know why TripAdvisor had chosen Newton as their first HQ? Was it just that the founders lived in Newton? or it had the cheapest commercial rent closet to Boston (with T access)
Most of this discussion has been about professionals, in jobs with decent incomes. My impression has been that a lot of the hiring crisis centers around a much different demographic – low income hourly jobs like restaurant and store workers.
Most of these jobs hire people who can’t afford to live in Newton, in which case they need a way to get here. There’s a limit to how high wages can go and still allow the businesses to survive. Treating employees well is always important, but can’t make up for a job that’s too difficult to get to or has no place to park for those who can only get here by car.
A place like Trip Advisor can move to another town if employees don’t like it’s location, but neighborhood restaurants and stores are needed in fixed locations. If they are having trouble filling jobs in Newton, we lose important services and amenities in our villages.
Meredith,
I would guess that restaurant and stores have ‘crazy’ amounts of staff turn over. Students, part time workers, folks working to save money for education, etc etc.
Without Boston-like density, I doubt you will ever be able to find enough supply of such people in an affluent town. So yes, we could build enough density to house these employees, but Newton will have to sacrifice a few things such as overcrowded schools, more traffic and higher property taxes to cover the influx of resident services.
Bugek – it’s not only about building housing. If you improve public transit – make it reliable, longer hours, and more frequent – workers don’t have to live in Newton.
Lucia,
Unfortunately the MBTA is not in the business of providing what their customers need. They are driven by politics and unions. Why should they care about the needs of an affluent suburb?
We will see affordable autonomous cars and taxis before we see MBTA solves issues specific to Newton. It took 4 years for MBTA just to study ADA requirements for Auburndale and they completely screwed it up and wasted 4 years and $$… Imagine if they actually had to do some actual work..
https://commonwealthmagazine.org/transportation/t-is-rebuilding-station-in-worst-possible-way/
I agree with Lucia. Most of Newton’s public transit (e.g. commuter rail and express buses) is solely for people who commute to Boston during business hours. It isn’t useful for people who don’t work during typical business hours, it isn’t useful for people who need to commute to places other than Boston, and it isn’t useful for people commuting TO Newton. AND for many, the prices of the CR and express buses are prohibitively expensive!
MMQC I wasn’t aware that the express buses had jacked up prices (I take the green line). What does the MBTA charge for express buses
A regular monthly MBTA bus card is $55 and the monthly Inner Express card is $128.00 and the monthly Outer Express card is $168.00.
Inner Express Bus is $4 with a Charlie Card, $5 without and Outer Express Bus is $5.25 with a Charlie Card or $7 without one.
The MBTA should care about affluent suburbs because the people coming into Newton to work are not affluent – salespeople, nurses, teachers, custodian, etc. And many of these people live in suburbs too.
If our State government can’t get transportation fixed, what can they do? Transportation is even more dependent on the government that housing. When have you last heard of a private developer building a subway or road intersection?
Plus, allegedly our state wants to reduce greenhouse gases. Transportation is the biggest emitter of greenhouse gases in MA (43% – https://www.mass.gov/service-details/ma-ghg-emission-trends).
The State’s Commission on the Future of Transportation’s #1 recommendation was ‘1. Prioritize investment in public transit’ because electric cars won’t reduce congestion or transit inequality. https://www.mass.gov/orgs/commission-on-the-future-of-transportation
@bugek If you’re asking why they originally chose the Needham Street location (now Newton Nexus) I don’t have a good answer for you. The company was founded in Needham and I know they have always been committed to staying in the area.
I know that current employees come not just from Boston, but from around the metro area (including NH and RI). The current location is centralized for that type of workforce.
@bugek
I agree with you. The T hasn’t been able to consistently provide reliable
transportation for many years. In the same way that UBER has replaced taxis, the MBTA will eventually
be replaced or fully marginalized by other transporation solutions.
The only real interest the T seems to have is continuing their ridiculous pension and retirement system
which ultimately you and I will be responsible for proping up while our own retirements will suffer.
The WSJ has an article titled “Why Perks No Longer Cut it For Workers.” In it the author explores how to find, hire and keep employees in 2019.
An excerpt:
“They’re going to have to go deeper. What will distinguish the most profitable companies from the rest in the coming year won’t be whether they offer foosball or free food. It will be whether leaders foster a workplace culture where employees feel a sense of belonging, like their jobs and trust their managers to help them move on to a better one.”
“For employers, those squishy factors can make the difference between riding out a downturn or falling flat.
Companies that rank in the top 10% in engaging their employees, including giving them the training and encouragement to do their best work and imbuing it with a sense of purpose, posted profit gains of 26% through the last recession, compared with a 14% decline at comparable employers, says Jim Harter, chief workplace scientist at Gallup and author of its annual employee-engagement survey.
The tight labor market is raising the bar. Coveted employees simply aren’t all that interested in working for companies that don’t give them the level of trust and motivation they want. “People expect to have a great manager now,” says Dr. Harter. “They want to be able to see their future in the organization.”
https://www.wsj.com/articles/why-perks-no-longer-cut-it-for-workers-1543846157