RECOGNIZING THE VALUE OF LONG TERM EMPLOYEES
Some disturbing business trends have begun in recent years, and it is easy to dismiss them as side effects of COVID 19 that will revert to “normal” as COVID subsides. That might be wishful thinking. Neither the hiccups in the worldwide supply chain, nor rising fuel prices can easily be linked to the virus. The same goes for the shortage of microchips. One trend that might be harder to understand is the mass of USA employees who voluntarily quit their jobs in 2021, many of whom do not appear anxious to find another one. This has been referred to as the Great Resignation of 2021 and has resulted in a labor shortage in many industries.
The numbers behind this trend are stark: About 47 million people, or one-in-five working USA adults (19%), quit their job at some point in 2021 – and it was even higher (24%) among lower-paid adults. These are the highest percentages ever recorded, although these “quit rates” have been increasing for over a decade (Source: Pew Research). This came on the heels of 2020, which showed a one-year dip in people leaving their jobs, as the uncertainty of COVID plus government stimulus checks caused a pause from the overall trends. A closer look at the numbers, however, shows something more damaging to many businesses: the accelerated retirement rate of long-term employees who just decided it was not worth it to stay in the workforce any longer.
More Americans retired in 2021 – and at a younger age – than in any year in US history. And unlike the Great Recession of 2008-2010 where 1% of recent retirees actually came BACK to the workforce after a downturn in the economy, in 2021 workers over 55 years old retired 1.9% FASTER than the year before. Many were experienced, dependable employees, and some managed departments and business units. Most knew their job well and possessed a dependable work ethic. Their early exit is causing management problems in many industries, as less experienced employees struggle to fill the void. And that traditional work ethic is getting harder to find.
Just ask Mike Scelzi. As Scelzi Enterprises nears its 43rd anniversary in business this August, the owner and founder often reflects back on the long-term employees that have helped him and his brothers build a legacy in Fresno, CA. “When we started all this back in 1979,” he notes, “we were just a couple of young guys having fun welding and painting cool stuff. Sometimes we saw our small band of employees as a necessary evil. The minimum wage was $2.90 per hour back then and some days we thought none of our guys were worth that much! We were pretty naive about business, but thankfully we learned some things as time went on!”
1979 was a year of turmoil in the USA, and not the ideal time to start a small business. The 52 American hostages taken in Iran and the global havoc that ensued caused the price of gas to surge to nearly 85 cents a gallon. The accident at Three Mile Island raised safety concerns about nuclear power. Inflation was on the rise. Still, in 1979 you could buy a new Ford F-150 for about $6,000 and McDonalds went nationwide selling their Happy Meals for the first time. There were still some bright spots in daily life.
In August of that year, Mike and Gary Scelzi took a $20,000 loan from their father Monroe and turned it into the truck body building juggernaut that is Scelzi Enterprises today. They survived the severe recession of 1980-83, and each one since that time. The employees who joined their team in the ensuing years and decided to stay have been a huge part of that success.
“The more you spend the time to find and hire and train new employees,” Mike adds, “the more you appreciate the seasoned team of veterans who have hung tough with you through the years. Those first 20 years were pretty tough, and then when the 2008 housing crisis slammed us hard, we trimmed our team quite a bit. We didn’t realize then how hard it would be to ramp things back up with the same quality team when the economy recovered. So when COVID hit in 2020 we were determined not to lay off anyone for another short-term downward blip.” That decision seems to be paying off.
Later this Summer Scelzi Enterprises will hold a special luncheon to honor the new inductees into their “20 Year Employee Club”. That Club is getting larger each year, as is the Scelzi appreciation for their efforts. “Twenty years ago, it was easier to find integrity and appreciation of a hard days’ work,” Mike adds. “Like some raw materials we need for our truck bodies, they are much harder to find today. All the more reason to celebrate it when you can still find it and do your best to build an organization that encourages more of it.”
At Scelzi Enterprises, they are trying to build more than just the world’s best truck bodies, but also a team that can continue to maintain those lofty goals. A task that is getting harder to achieve.
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“Majority of workers who quit a job in 2021 cite low pay no opportunities for advancement, feeling disrespected”
“The Great Resignation
didn’t start with the Pandemic”