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Ron Hetrick - Finding a Solution to Current Labor Shortages

• David Turetsky • Season 9 • Episode 13

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Ron Hetrick, Vice President of Staffing Strategy and Sr. Labor Economist at Lightcast, joins us in this episode to discuss the current labor shortage and its relation to shifting demographics in the workforce. He explores which industries are being hit hardest by labor shortages (and why), and he answers the question on many of our minds: can AI help solve this issue? 


[0:00] Introduction

  • Welcome, Ron!
  • Today’s Topic: Finding a Solution to Current Labor Shortages


[7:24] An overview of the current labor shortage

  • The economic impact of retiring Baby Boomers becoming consumers rather than producers
  • How immigrant workers fill essential roles in sectors facing critical staffing challenges


[25:40] Which industries are being hit the hardest with labor shortages?

  • Using classification systems to identify the most vulnerable industries
  • How automation and remote work are reshaping job markets


[38:30] Is AI a potential solution to the labor shortage?

  • Japan’s pioneering approach to AI workforce integration amid population decline
  • Why successful B2B AI implementation must precede B2C applications


[45:55] Closing

  • Thanks for listening!


Quick Quote:

“Right now all the AI investment is going to B2B, . . . which are also in-office, professional jobs. So a problem we don’t have is getting solutions, while all the [labor shortage] problems we do have have no solutions.”


Resources: 

The Rising Storm


Contacts: 

Ron's LinkedIn
David's LinkedIn
Dwight's LinkedIn
Podcast Manager: Karissa Harris
Email us!

Production by Affogato Media

Announcer:

The world of business is more complex than ever. The world of human resources and compensation is also getting more complex. Welcome to the HR Data Labs podcast, your direct source for the latest trends from experts inside and outside the world of human resources. Listen as we explore the impact that compensation strategy, data and people analytics can have on your organization. This podcast is sponsored by Salary.com, your source for data, technology and consulting for compensation and beyond. Now here are your hosts, David Turetsky and Dwight Brown.

David Turetsky:

Hello and welcome to the HR Data Labs podcast. I'm your host, David Turetsky, and as you can tell, I've had lots of Diet Coke already today. And as always, we have my friend, my colleague from Salary.com, Dwight Brown. Dwight Brown, how are you?

Dwight Brown:

I am great. I think I need as much caffeine in you have had. I'm not quite at that energy level.

David Turetsky:

I am powered today by the Coca Cola products. So

Ron Hetrick:

this is what I just drank. So it's a Dr Pepper. Is zero sugar, so

Dwight Brown:

zero sugar

David Turetsky:

and I have that too.

Dwight Brown:

Look at you guys!

David Turetsky:

You hear from our guest, Ron Hetrick. Ron, how are you?

Ron Hetrick:

I'm great! I'm also semi wired on zero sugar Dr Pepper

David Turetsky:

Yeah. Like, I mean, Dr Pepper has become part of my bloodstream now, so I usually have at least one or two 12 packs in the garage and one at least in the refrigerator. So

Dwight Brown:

got the IV bag hanging vein line in it.

David Turetsky:

I would love to do that. If there's an IV, I'm gonna find it. And this segment of the podcast is brought to you by Dr Pepper zero sugar.

Ron Hetrick:

If we actually make some sales for them I want a risidual!

David Turetsky:

That would be great. Hey!

Dwight Brown:

David, we're not selling out

David Turetsky:

We heard on your podcast that you were saying that we sponsor you. We don't. So please cease and desist!

Dwight Brown:

exactly.

David Turetsky:

So, so all of that to introduce our new friend, Ron Hetrick. Ron, how are you?

Ron Hetrick:

I am doing great. Happy New Year. Two good working days into the new year. So

David Turetsky:

is that all?

Ron Hetrick:

Get a bit of a feel for what it's going to be like, right?

David Turetsky:

It feels like a lot more.

Dwight Brown:

Feels like it's been a couple of weeks.

David Turetsky:

Yeah, we've actually been working since, what? At least Dwight, last Thursday? So we've had at least four official days. Yeah,

Ron Hetrick:

I ended up going to the zoo on Friday last week.

David Turetsky:

Oh, that's awesome. Which zoo?

Ron Hetrick:

Jacksonville Zoo. It's like they have a good zoo down here. Weather was too great to re engage that soon, but now it's gotten cold, so you might as well work, right?

David Turetsky:

exactly.

Dwight Brown:

Yeah.

David Turetsky:

Well, and the animals have all gone in their shelters as well. So

Ron Hetrick:

probably now they are. They were still out a bit, but they were all making sure they were in the sun.

David Turetsky:

Oh, yeah, definitely. So Ron, now that we know that you're in Jacksonville, why don't you tell us a little bit more about you and what you do.

Ron Hetrick:

I'm a senior labor economist at Lightcast. I have been a labor economist since 1992 so

David Turetsky:

Wow.

Ron Hetrick:

33 years of doing this, it's really been the thing. I've spent a lot of time kind of studying industries, really, what's been the obsession over the past four or five years has been demographics as it relates to labor force. So the demographic drought, I was lead author on 21, who's going to do the work, which I kind of, I would say, kind of toured on it like was an album for a couple years, keynoting on that, and then a Rising Storm, which came out a couple months ago. All of these pieces were really uplifting, as you can imagine.

David Turetsky:

Oh sure,

Ron Hetrick:

We'll be talking about that today. But yeah, there was a time about a year or two ago where I thought, how, how can I keep doing this? Like, how can I keep bringing this great message of chronic labor shortages to people, but I think I've kind of rounded the corner on it, and I realized that it really is about just making sure people understand things, and then you can kind of prepare for the storm.

David Turetsky:

And oh by the way, we're gonna have links to the Rising Storm report and the audio recording in the show notes. So for those of you who want to catch up to what Ron's talking about. You will have the ability to do that after you listen to the podcast. Or if you want to stop now, go to the show notes, listen to that and then come back. You'll be much more, I guess, aware, right?

Ron Hetrick:

Yeah, there's a lot there. But I think we talked to a reporter one time who I loved his statement. He goes, You know, you could pick any 10 pages in Rising Storm and be blown away, and I think that's kind of the greatest compliment. It's when you write something, it's like making a movie, right? Like, the point of editing is to make sure that anything that doesn't move the plot along kind of goes to the side. And we worked really hard on making sure that Storm was a tight message, where every paragraph would be something that potentially blow your mind, right? I was proud of the way that turned out.

David Turetsky:

That's awesome! And before we get on to our topic, let's ask the one question we love asking each of our guests, which is, what's one fun thing that no one knows about Ron?

Ron Hetrick:

The hardest part about a question like this is that I'm an incredible extrovert, so everybody seems to know everything about me, from the guitars and my background to the fact that I have way too many hobbies. But I think the one thing unless you were my wife, you would not know about me, is that I am a weird kind of like, I will eat any kind of food, but I do food as cycles. So I can't have, like, Indian twice in the same week, or sushi, you know, twice in a week, or something like that. It everything has to have its slot, you know. So I'm gonna eat, you know, something, and it'll be like, two weeks before I have it again. So it makes for a real fun times when I've had something and then a couple will be like, we want to go out. And they'll say, we want to go this restaurant. I'm like, Oh, wow. You know, I kind of had that like, two daysago.

Dwight Brown:

They're like, what's wrong with you?

David Turetsky:

Yeah, well, Ron, I have something similar, but I'm kosher, so I always have the excuse of, I can't go there.

Ron Hetrick:

Ah, there you go. Yeah, I can go anywhere. It's just a matter of,

David Turetsky:

Just don't want to.

Ron Hetrick:

Yeah, exactly, exactly.

David Turetsky:

Well, that's fascinating, and there's probably some psychology behind that, maybe even some body chemistry behind that, too.

Ron Hetrick:

I'm sure there is

David Turetsky:

Yeah, we're not going to go there any further, because that will take the place of our topic for today.

Ron Hetrick:

alright

Dwight Brown:

Although it would be a fun topic!

David Turetsky:

It really would. Yeah, actually, I'd love to talk to you about the psychology of that, but let's have that as a separate topic for another podcast.

Ron Hetrick:

Sounds good.

David Turetsky:

What we're going to talk about today is about the demographics of our economy and how the replacement of the baby boomers with younger generations, and how do we fix the shortages in the key sectors? And so what we'll do is we'll talk about how this is really a big shift for our economy. So Ron, one of the graphics that stood out in your report is that from 2024 to 2032 US population growth outpaces the labor force growth by four to one.

Ron Hetrick:

Yeah.

David Turetsky:

What's an overview of how we're seeing these labor shortages show up in the economy?

Ron Hetrick:

Yeah, when you it's funny, like people talked about baby boomers for forever. And I think when we were trying, what we were trying to say in Storm is okay, that's nice, and we can talk about how populations change, but there's a really, kind of a damaging effect of when a huge group of people all get old at the same time, and you didn't really have a lot of children to kind of replace them. And what happens? And what we talk about in that report is people retire, and they're able to retire earlier now than ever, because the money accumulated is unlike anything we've ever seen in human history.

David Turetsky:

Right

Ron Hetrick:

And so when you retire with all this money, you become a consumer, and you also become a consumer of a lot of things. When you are retired, you used to produce and consume, now you are just consuming. And you'd start to wonder, well, then who's doing the producing for the consumers? And just the very statement of which we're going to be talking about more and more on this call is, what does producing mean? You know, what? What is it that people consume that keeps them alive, that keeps an economy going? And I think that was the point we really wanted to dive into in Storm.

David Turetsky:

Well, so I'm older, I'm, I guess a Generation X,

Ron Hetrick:

Yes, probably, I'm guessing by looking at you.

David Turetsky:

Yeah, thanks, and, and, one of the things that I worry about is I'm not gonna be retiring for many, many years, probably not until my kids all graduate from college, which is at least another, probably another, maybe even 10 years, eight years, probably. But I guess the question is, is that I think a lot of other people will find it difficult to be retiring, whether it's because of the economy shifts in the last few, you know, last over the last decade or two, and then the lack of good savings. So how does that affect it as well?

Ron Hetrick:

Yeah, what's what's interesting, and what we try to talk about in Storm is this is actually a misconception that people have, number one, there was a belief for many years, you know, you're taking the physical parts of these jobs away. A lot of the physical jobs are going away so people can work longer, you know, because these are professional jobs, and why wouldn't they work longer? There was also this concept of, we're healthier than we ever been. You know, we actually have a generation coming up now not smoking all the time. So, you know, people would be healthier and they'd be able to work longer. But what we're seeing is retirement ages keep moving down. And the reason that is is while people will talk about, you know, kind of things in the economy and all these kind of things, the reality is the accumulation of savings is very unique for boomers. This is the first generation in history where both spouses worked over a course of a career, and most likely worked professional jobs. So household wealth accumulation is unprecedented, and these are people, boomers, who would have bought their homes, you know, 20 30, years ago, and if they're selling homes now, the equity they've built up has allowed them enormous capability. So a couple years ago, you know, inflation starts to take off, and there were a lot of people that had retired. I don't want to say early, because the data doesn't support that. The data just basically said that a lot of people who were otherwise going to stay in the labor force decided to go ahead and retire. And these people were well into their 60s, even into their 70s. So it wasn't necessarily people, necessarily people 55 so what we found out was, during that time that inflation was taking off, labor force participation amongst people 55 and older never got better. In fact, it turned it up a little bit and actually starting to go back down again. And so I think that one thing we have to I know it's a popular narrative, but I think the data clearly shows that people are able to retire, and they absolutely are retiring, and we do really have to appreciate the amount of wealth these people generated compared to their parents or grandparents is astounding. It's astoundingly different.

Dwight Brown:

So when we look at it from a workforce perspective, that's, that's one thing. But what also goes through my head is, is there any impact on as people get older, there's going to be more utilization of health care and those sorts of things? Does that factor in in one way or another, or is it just totally separate.

Ron Hetrick:

You know, this is the most interesting thing. I think if we wanted to Rising Storm could have been a novel. I mean, it was meant to be a research paper, because, you know, especially with attention spans like mine, it's hard to make it through a really, really long piece. And we really wanted to make sure that we honed in on this issue. But you start to think about this in totality. Who, if you have as population base, you know, our native born population is largely retiring. If you go over the past four years, the native born labor force is actually shrinking. You know, all of our labor force growth has been through immigration. So if you think about that, well, who are people that take out of their paychecks to contribute to the stock market and drive that kind of growth, so that we see consistent economic growth. Who is this consuming population? And we see the consuming population aging. Well, the products that aging populations buy are very different than the products that young couples buy, or people in their 20s and 30s buy. And so you have to look at it even beyond health care. You have to go into everything and start to think, what is, what are the next opportunities where, what's the economy really going to need? And obviously health care is the easy one, because you go, well, they're all getting older and they're going to need more health care, but there's actually a lot of other service level occupations that these people are going to need as time goes on. And I think that that, you know, unfortunately, this is where I end up getting the moniker of Prophet of Doom when I speak is I have to, when you talk about these things and you do the math, the math absolutely does not add up. You know, if you think about the fact that these people aren't dying, right? They're just they're living longer, and they're consuming over these periods, this period of time, you're still going to need more and more producers, because population still growing. It's just the way it's growing is not like we've ever seen. So

Dwight Brown:

Where you're going to need the producers is shifting, yeah,

Ron Hetrick:

Yeah. And I think when the paper, one of the things we mentioned is nine out of the top 10 jobs in the US, most posted jobs don't need a college degree of any kind. And these are service level jobs, you know, people who work in restaurants and you know retail, people who sell things to you so that you can live. And labor is another one, a big part of it, and that is a huge part of this paper is to get to bring this awareness of we've told people for three, four decades that college is the only way. Well, they listened and they all went to college. Well, that's not, you know, not to insult people. I have a college degree, but that's not what an economy needs to survive. You know, economies are actually run by the people who kind of do the service level jobs, but those are very unattractive jobs. You know, they're hard. In who's going to do the work? In earlier article, we asked high school students, why don't you do these jobs? And I'm like, well, they're hard, you know, I'm outside. I want to be in an office and everything and and these are very real. I haven't talked to a person yet that's like, I just completely embrace wanting to put a roof on in the middle of the summer. I think that's awesome. And yet the roof is what you need.

Dwight Brown:

Right

David Turetsky:

But there, we used to, and this might be changing due to politics more than anything else, we used to turn to immigration, right? For those roles to get filled.

Ron Hetrick:

Not used to, that is the way we're filling them.

David Turetsky:

No question, no question. But it is today, but there's this political and social like upheaval of, Wow, you got to pay them more so that more Americans can do that work. And I'm being dramatic for a reason there.

Dwight Brown:

Where the Americans don't want to do the work.

David Turetsky:

Americans don't want to get up on the damn roof.

Ron Hetrick:

The perception that people aren't doing the jobs because of pay is certainly not born out in the skilled trades data. I mean, HVAC techs are making 120 $150,000 you see that consistently in a lot of skilled trades, you know, it really does come down to they are the tough jobs, you know. And we're not in a position right now where people you know are embracing

David Turetsky:

Well, in the 60s, it was also a social issue. that kind of of work. And more and more you're growing up in households where you didn't see your parents doing that kind of work. You know, one thing I think we talked about in Storm, but the reason why that military can't hit their enrollment numbers every year now is because we have a record few number of kids growing up in homes where the parents were in the military. And that is a huge driver of, you know, people going into those particular things, and it's really hard, if that you've never been exposed to something like that, to want to do it. You know, people in the 60s and 70s, either were conscientious objectors. I don't want to go to the military. I'll face prison, I'll do whatever. Or, you know, and then in the 80s or 90s, it became much more patriotic, but then it still was, you know, are you going to go to school? Are you going to go to the military, or are you going to take one of these skilled trades? And then in the 90s and 2000s you're seeing many more first generation, sorry, second generation Americans going into the military and being able to fill out a lot more roles that we used to have before. So now they're coming back into a lot of those skilled trades. So, but still, you need, you need the immigration cycle in this process, and especially with birthright, you need people who are second generation Americans, or first generation Americans at least, to do a lot of those roles that other people just won't.

Ron Hetrick:

Yeah, it's an unfortunate aspect, is one of the things I don't we didn't write about this so much in the paper, but it's something when I speak live, that I talk about a lot, and that it's the concept of esteeming jobs. You know, we tend to esteem certain jobs and look down on others, and it's almost subconscious that you do it. And an example that I give is, you know, you'll go through an airport and you'll see people working at a food counter in the airport, and your initial thought is, I wonder what happened to them in life, that they are working this food counter in this airport, when the reality is the job they're doing is probably way more valuable than the job you're flying to go do in that moment. And and that is, it's hard If we say going forward, that these are the positions that we're really going to be struggling to fill, number one, because we really don't have many young people to do them. And number two, because immigrants do a lot of them, and maybe there's a an attitude shift about how immigrants will work in this country, then you get to this, well, if you don't change the esteem of these jobs in a second, you know you're going to be in a bigger and bigger hole. And the reality is, we painted these jobs into this corner for 30 40, years. There's no way you're going to rebirth thinking the psychology of people in five years.

Dwight Brown:

Yeah, they're steering the Titanic. Truly.

Ron Hetrick:

That's exactly right.

David Turetsky:

Well, one of the fascinating things that I was able to get because I worked at ADP and we paid one in six people was that two thirds of America is actually in those non exempt jobs. They're doing those production jobs, and that's two thirds. So like you, you're, if you're a white collar, I hate to use the word white collar worker, but if you're in those professional jobs, yeah, you have this elitist attitude of, well, they do that work, and we do this work and so it's actually not fair, because, to your point, before they're getting shit done, pardon my French. We're not, we're we're making, we're making supposition, theories and stuff, and they're actually doing it.

Ron Hetrick:

I really want to say something after you just said that, because this is, this is we wrote Demographic Drought, and I'm out speaking, and I started something just starts really something just starts really eating at me, and that's kind of what caused the paper of"who's going to do the work" to be written, and that's where we interviewed 1500 high school students. And we said, what are you going to do after you graduate? And now our sample was a little biased, so many of these people were going to go to college, but we asked them questions about, well, why is that? And the societal pressure was a big part of it, you know, not only from, you know, parents, but guidance counselors, their own friends, hey, I'm going to this college. I was going to do this skilled trade. Wow, you know, I feel a little bit lesser now. So this need to, kind of to do that. But all of these factors come in. And when we were writing that, you know, where there was some debate, when we were coming up with that paper about the title, and I was like. No, it's going to be called, who's going to do the work? Because what I wanted to say in that paper, and what we really tried to drive home in Rising Storm, is okay, so not you okay. So not your children, right? Because you're like, why didn't you all this so you couldn't go to college so not your children. So who's? Who does the work? So, and that's in the in that paper, and of course, in Storm, we're like, well, it's clear that what we're saying is it's not us and it's not our children, it'll be other people's children from other countries. So

David Turetsky:

Right!

Ron Hetrick:

we're going to rely on them to do it. Well, what happens if that valve gets shut off? Then whose children are you going to want to serve you? Because ultimately, it does come down to that, as we have always used the term, we're a service economy, but there's no one here to serve us, because we all just want to be served. And that doesn't that's not how things work.

Dwight Brown:

Do we do we see any of what I'll call the recycling effect? So I think of, I think of a lot of people I know who retire that then go back and get a job at Home Depot or Target, you know, they're they're like, Hey, I'm done with all the office stuff. I just want something where I can turn my mind off and and just work. Do we see a lot of recycling effect, or is that kind of a trickle thing?

Ron Hetrick:

A lot is a big statement. We see it, but it's not to the degree I think a lot of people think it is. And one thing that is so important when you talk about this topic, so important is to understand when these people re-engage, they are not re-engaging in a full time capacity. I mean, it is literally like, I feel like being busy a day or two a week, and so they're not looking for your company's employee value proposition, or long term growth plan, or to be wed to you, they're literally like, this is fun for a while, my health is kind of a problem. I'm feeling good right now, but I need something I can kind of engage and disengage from. And so one of the things that you know we started talking about early on is luring older people back into the labor force is not a long term solution. It's a band aid, and it's the worst kind of band aid, because it masks a true strategy to getting towards the future. And you saw this happen, and this example I can

David Turetsky:

Right ever give of this is if everybody remembers way back when CSX laid off all their middle managers. I don't know if you remember this, and so they laid off all their middle managers. Well, then their managers all got old and went to retire, and there was no people behind them, because they had laid them all up. So what they did is they would bring these people back, you know, in a kind of like SOW arrangement, paying them two to three times what they were being paid, because they didn't think the long term part of this out, you know, they were looking for a short term cost. At the time, there was such a war against middle managers in this country, and probably still is, to a degree. There is, yeah,

Ron Hetrick:

But yes, there's a reason why you have people in middle management, you know, because you envision them eventually going to this level. And so when that level happens, and you haven't had a plan for it, then you're likely going to spend way more than you would have spent. But that's not the way we do things.

Dwight Brown:

Interesting

David Turetsky:

Well, and the other, the other key issue here is that starting rates aren't what starting rates used to be. And everybody complains when the minimum wage goes up and the minimum wage is not a sustainable living wage.

Ron Hetrick:

Well, the minimum wage isn't even relevant in most areas anymore, because we're $3,$4 above the floors that they were setting. You know, it was interesting that a lot of this minimum wage increases came in in 21 22 when the market itself was like $14 $15, I know 18, right? It's 18 to 20. I mean, McDonald's is putting up signs for 16 in areas where the minimum wage was probably 11!

David Turetsky:

Right.

Ron Hetrick:

And so this is, here's the thing about it, if you go into the future and you start to look at these things, because I get this question a lot, usually from the crowd after I get done speaking, and they'll say, Well, don't you think that we could, we'll fix some of these problems if those wages go up in things like, you know, it's a fast food and I'm like, Well, that could help, but you hate that. You do not want these people getting paid more. And you see these people like, right? No, I don't. I'm like, No, you absolutely do!

David Turetsky:

Because their prices go up

Ron Hetrick:

When that happened, the low, the closer you are to the product, the more your pay increases directly reflect in the product price. If I pay my IT people more money. That's probably never making it to product.

David Turetsky:

right.

Ron Hetrick:

But my frontline store, people get paid more that goes into product price. Therefore, when they get paid more, you get really angry, and then the Fed comes in and starts raising interest rates because they're trying to get inflation under

David Turetsky:

right.

Ron Hetrick:

You see how this thing works. And I think that that's just that a lot of people wish that it came out of the CEO's pocket. You know, when they have to pay these people more, they're gonna take it out of the pocket. I'm like, that is not how it works at all.

Dwight Brown:

Right

Ron Hetrick:

It goes straight to you.

David Turetsky:

But no, but it is a very visible, very visible way, because now we're not talking about 20 or 30 times an average worker pay. We're talking about 1000s of times,

Ron Hetrick:

yeah, it's crazy.

David Turetsky:

an average worker pay, because executive compensation has gone through the freaking roof, and it's really nowhere near, it's astronomical, compared to when I was in exec comp back in the 1980s and 1990s and we were talking about, you know, what's a relative ratio? Well, now those ratios are just,

Ron Hetrick:

oh forget it

David Turetsky:

absolutely crazy, especially given stock prices and other metrics other KPIs that can track what they should be.

Ron Hetrick:

Yeah

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David Turetsky:

Why don't we transition though a little bit? Because I know we're going to talk a little bit about some of these things that were certainly on my mind, I'm sure on Dwight's mind as well. Which industries are really being the hardest with labor shortages, I imagine you just mentioned one, which is not just fast food, but really restaurants in general, right?

Ron Hetrick:

Yeah. So what we do in the paper is we try to say, let's do this as a CAT level. We all recognize, I mean, I live in Florida. We know hurricanes, so let's talk about this.

David Turetsky:

Well, you know better than we do, unfortunately.

Ron Hetrick:

So how do you get to a CAT level? And the CAT level is the easiest thing for us to kind of illustrate, and that is, there are four ways that work gets done. That's it, four ways. You can globalize shift work out to the world. You can bring in immigrants, so immigrants can do your work. You can automate. You can try to use AI or robotics to do the work. Or you have to hire from your local labor pool. So if I start removing options like a hospital, so a hospital can't globalize, I'm not going to send you to to Belarus to get surgery.

David Turetsky:

You could, but that would probably kill them

Ron Hetrick:

Right? So let's take that off the table. AI and first. robotics that has already been a pretty big non starter. It's one of the things we talked about in Japan. They've already abandoned the robotics program in the hospitals, because the nurses were fixing the robots more than they were working with patients. We look at that, we go, okay, we've narrowed your options down to immigration and to hiring from your local labor pool. Well, there's an added level of complexity. So our two CAT fives are construction and health care. Why? Because not only am I hiring from my local labor pool, but I'm asking something of them, like in health care, registered nursing is the, by far the most requested job in this country. They need a very, very difficult, a top five most difficult to get degree in this country is registered nursing. I need those people. It's hard to get it. It's expensive. You have to have that skill level.

David Turetsky:

Yeah

Ron Hetrick:

Only 4% of our college grads last year got a nursing degree. No one's really wanting to do that, by the way, you may have to clean up bottoms, you know, all of those things that don't go with

David Turetsky:

It sucks being a nurse is what you're saying, yeah

Ron Hetrick:

Are in that job. So that makes these dials up the intensity a lot. Construction is the same way. Yes, I can have construction workers, but so much of construction is not in the labor it's in the skill trade that you have. Well, these are jobs that require you to have a certain level of physical dexterity, certainly a willingness to maybe work in where are we building the most in this country? Well, in the southern states, it's very hot most of the time, so it starts to narrow down your pool. You no longer can employ that person who's 75 years old, and the younger people that you're trying to attract, we have less and less of them, and most of them are going to college, as we talk about in the papers. So it's that's really how we look at the CAT fives. And then what's funny about this is we flip the whole world on its head, the CAT ones, banking, insurance, IT. You know, you can globalize, AI's coming into these jobs in a lot of places. They can use immigrants in various ways. These are some of the more sophisticated programs we have. Even if h1b isn't big enough, it does create an avenue to employ people in other countries. Remote work. You can't remote work a hospital job!

Dwight Brown:

right, right,

Ron Hetrick:

But you can remote work IT, banking, insurance, so everything that was tough to fill. The STEM jobs that we used to say are what we all have to go into, we're now saying no, no, no, no remote and and AI and all these things in the next five so years, those jobs will be some of the easiest to fill, relatively speaking to some of these ones that we see depending on a local labor force that just may not be there.

David Turetsky:

Right. Yeah, try and hire an accountant. It's not too hard. Try and hire an electrician or a plumber. It's impossible!

Ron Hetrick:

I've got an anecdote for you. I talked to a company that put a posting up for an accountant and a maintenance worker. It was a hospital. They had about 150 applications for the accountant by that night, and over the course of two weeks, they had one applicant for the maintenance worker, and that person was just what we call applying for the purpose of saying they were applying so they could collect unemployment.

David Turetsky:

Well, I'm really an accountant!

Dwight Brown:

Dialing for dollars.

Ron Hetrick:

Yeah, exactly.

David Turetsky:

Well, but what's happening is, and I've seen this actually occur, is that that people get, they get ghosted so much, and they get fed up that they start to think about switching careers.

Ron Hetrick:

Yeah.

David Turetsky:

And they start to settle, and their expectations about their compensation and their world have to completely change.

Ron Hetrick:

correct

David Turetsky:

Or the markets change for them and with them, and so their compensation goals might get met, because the market is so bad for those roles. And so I joke with my son a lot about becoming a plumber, because he's like, I want to be a paleontologist. I'm like, No, you probably want to be a plumber. And it's not just because every time he bends over his butt hangs out, it's because

Ron Hetrick:

So there is more than one qualification for that!

David Turetsky:

There is!

Ron Hetrick:

I actually have a friend whose son did graduate a four year college, I think he had a business degree, who was now training to be a plumber, because he hired a plumber, and saw how much they were making, so he decided

David Turetsky:

right to make a switch. I think you're you're going to see more and more of that going forward. I think you know, one of the things that we talked about in"who's going to do the work" was when we interviewed these high school students and they talk about, or when you talk to Gen Z and Gen alpha, what is it you're looking for? Well, a sense. I want the job to have a sense of purpose. I want to feel like I'm accomplishing something. doing something.

Ron Hetrick:

I want to know when I go to bed at night that I've made a difference. You know, I'm concerned about my career progression. Well, hey, congratulations. You just described skilled trades!

Dwight Brown:

Right? Exactly, right, exactly.

David Turetsky:

Getting heat in someone's house is definitely a, a skill that you know has a has a good side.

Ron Hetrick:

You've just made people happier than anybody's ever going to make somebody happy! Like I always say, the world doesn't need another app for your phone. If, if all technology stopped today, if it all stopped, if we didn't see another technological innovation from now until the end of time, we would be completely fine as a society. Now, if we somehow remove the people from our food supply, that could be a very, very real problem.

David Turetsky:

Absolutely

Ron Hetrick:

That's something we have to start to look at, you know, in the next year or so,

Dwight Brown:

One of the things that you've mentioned that it is a reality, especially post COVID here, is further limitation of the workforce, because people have gotten used to remote work and absolutely do not want to go into jobs that requires them to be somewhere besides their living room.

David Turetsky:

right

Ron Hetrick:

So we've done a study. It just, we just got the data right before Christmas, so. We worked with a partner company of ours, and we're getting ready to kind of we're still exploring the full depths of how we want to put this data out. But I'll just tell you real quickly, in overall remote roles, doing the same thing, got 100% more applicants than the non remote job. So

David Turetsky:

of course

Ron Hetrick:

This all came about, and if my daughter overhears this, she'll feel so happy that her father called her out. My daughter actually does my profession as well. She asked me one day, she goes, You know, I sit in an office with recruiters, and all day long I hear them. This is mostly engineering, and they're they're making these calls, and as soon as they get to it's in person, the person's like, I'm not interested.

David Turetsky:

Right

Ron Hetrick:

And she goes, I wonder how many people who say they're unemployed or are saying they looking for a job are really only looking for remote work. And I've been begging the job boards to join us on our quest to to show us for the amount of profiles that they have on their job boards, how many of those profiles are only sitting there, applying to remote jobs. And I think it could be a great service for all of us to know that.

David Turetsky:

It certainly would. Well, it would certainly help designing and

Dwight Brown:

Yeah! doing workforce planning, right?

Ron Hetrick:

Sure!

David Turetsky:

Designing roles and workforce planning, if you knew that the market, especially in the location that you're at, and the market you're looking for, if you're not going to be able to hire people locally, then you may actually start thinking about more, not just not just nationally, but globally.

Ron Hetrick:

Yeah. And by the way, you can't afford a home, right? I mean, home affordability is, that's no great, no great lie. One of the things when I speak, and I'm speaking later this week in a in a location in the Carolinas. And one of the things I do when I study a location is I immediately go to Home Price and I look at how much it's gained in the past several years. And in this particular location, was 38% in the course of two years. And I think about the fact that salaries didn't go up 38% anywhere. So you have essentially priced your market for retirees or boomers who are selling their now grossly overvalued home so that they can move into these. Well, that's the exact not labor force that you are going to attract into your homes. You do not have the inventory, and your inventory is not priced for service workers to move into. So what are they supposed to do? And that's I, you know, I've been challenging companies and locations to do more work to instead of just saying, I offered you a job, the rest is your problem. It's like, no, it's your problem. If you want them there, you should be talking with the builders. You should be talking with the landlords of these places and saying, what options do we have for our people who are moving in at these salary ranges?

David Turetsky:

Well. I think it actually goes also back to your planning boards and your governments and your taxation and your and the taxation and legislators, because they're the ones who are setting up either incentives or disincentives for these things to happen. And so you're right! I mean, you can go to landlords, but landlords are only going to try and get as much as they possibly can!

Ron Hetrick:

Absolutely.

David Turetsky:

And the mortgage brokers and the mortgage companies and the banks, they're trying to get as much as they possibly can. So unless you go to the people who are legislating this stuff, it ain't gonna change!

Ron Hetrick:

I would say one thing, and that is and now it's funny, I live in St Johns County, Florida, and I it's actually on a slide that I use, and I'm like, I promise I didn't go out look for my own county. I didn't we know we were doing it until I did a Google search. A housing developer down here did a development, but he set they set aside a certain number of these homes at a lower market price, but you had to be working as a health care worker or in one of these jobs that were deemed very necessary for the county.

David Turetsky:

Sure

Ron Hetrick:

Because St Johns County is a very over educated County, of 50% of our residents at least a college degree. And

David Turetsky:

that's great

Ron Hetrick:

national average, like 34 so you know that is those are things that are very intentional. And you're right. That is something that can be done. But I also would say that if I am a large company and I'm hiring a certain kind of worker. If I'm a hospital, I'm hiring nurses, I would think that there would be certain apartment people would be like, Look, that's a safe bet for me. Like, you're gonna bring these people in, I know how much they like they make. Like, I know they're going to meet their payments every single month. And I'm willing to trade off risk to give you a price that would attract people to do that. And I think it's just something that has to be explored.

Dwight Brown:

Or some sort of benefit, you know, for your employees, some sort of housing benefit that goes there. But again, that's more money, and it's going to hit the pricing. And, yeah, part of that vicious cycle.

David Turetsky:

Yeah, I was going to say we have section eight housing here in Massachusetts, and that is that when you build a certain number of homes, you have to keep some as a proportion, a certain proportion, for lower income housing. And you know, that's, that's just the law. And you can apply to not have it apply to you, but you'd have to, you have to really bend over backwards to have it be not applied to you, yeah, but I love the I also think it's location, location, location. If you're in an area that has a lot of healthcare organizations, that makes more sense, if you have no healthcare in your entire county, then that ain't gonna work, right? Or maybe it's a way of enticing that to happen.

Ron Hetrick:

Well, they're building a lot of hospitals here, and I think that they were looking at it going, Okay, we can't staff the hospitals that we have, and we're going to build more.

Dwight Brown:

Yeah.

Ron Hetrick:

So that's got to create some kind of mechanism to get people into this labor force.

David Turetsky:

Well, it also people want to live in areas where there are, like, people near them, probably, and so they can all commute to the same place, or they they can share war stories.

Ron Hetrick:

That's right!

Dwight Brown:

Yeah

Ron Hetrick:

It's a big deal.

Dwight Brown:

It is!

David Turetsky:

Hey, are you listening to this and thinking to yourself, Man, I wish I could talk to David about this. Well, you're in luck. We have a special offer for listeners of the HR Data Labs podcast, a free half hour call with me about any of the topics we cover on the podcast or whatever is on your mind, go to Salary.com/hrdlconsulting to schedule your free 30 minute call today. So the third question Ron, which I'm dying to get to, is we talk a lot about AI in the world of HR. Is AI a potential solution for this challenge, and I and as I'm saying it, I'm like, how can it be? As we talked about, you can't replace people in lots of different in lots of different work with AI. How can it help?

Ron Hetrick:

Yeah, I think one of the most incredible things about this paper, and you don't really know this until you're well into writing it. And you know, there's certain things you want to go look at. You take some time, you finally get it, and then it all kind of comes together. What we kind of saved to the end of that paper was lessons from Japan. And that little piece, it's only a two pages, three pages, is so powerful. And what you found out, what you find out in Japan is you, we learned some things. And number one was people who are getting older, because in Japan, it's common to work to you're 80 years old. Well, what is it? What are the jobs that 80 year olds are willing to do in Japan? What do they apply to? And so they looked at that, and they were like, well, they were kind of light professional roles, office jobs and things like that. Well, we also know, as we talk about in the paper, that all of our labor force growth has been college grads. You know, we actually have a pretty big gap, big decline in non college grads. Well, college grads are looking for these kind of light, early professional office jobs, and then we look at AI. And right now, all of AI investments going to B to B, even though the B to C market was supposed to be the dominant part of where AI was coming in! To this point, if you look at private equity venture capital investments, they're almost exclusively, it's almost, it's heavily leaning towards B to B. Because those people can write the big checks to justify the investment that you put into this AI, the AI research in the first place. Well, those are also in office and professional like you start to look and you go, a problem that we don't have is getting three solutions. Meanwhile, all of the problems that we do have have no solutions. You know, older people will not do a lot of these manual labor jobs. These college graduates certainly are not going to be like, Well, I just paid $50,000 for my degree. I'm not going to, you know, go be a laborer. And then lastly, there's just no money for AI to go after. So one of the things we talk about is, when you talk about a franchise restaurant, you're talking about people who are had their own P and L, you know, they're not investing in robotics and such, because that's a very expensive transformation. And if the machine breaks, you still need people! Well, not to insult them, but McDonald's, can't keep an ice cream machine running. So how are you supposed to keep a robot doing most of your labor? So we just look at and say the environments aren't good for these kind of things. There's not a big check to be written. The checks would be very small, and those for the amount of money that's being invested in AI, the return's not there. And when will they start? Well, there was some speculation that maybe in 2026, 27 you start to see the B to C. But I challenge that. If the checks don't come in really big from B to B, then I don't imagine they're going to be too anxious to go spend a lot of additional money investigating how they're going to make money in that B to C market.

David Turetsky:

There were a lot of investments in Japan made in humanoid artificial intelligence and robots.

Ron Hetrick:

Yep

David Turetsky:

Never really became popular in the consumer environment.

Ron Hetrick:

No. And they love to show these things jumping on boxes, and then you see the cutouts that they didn't show, which is them falling trying to go up a single stair, and you're like, Would you trust that robot to pick your mother up in an in a

David Turetsky:

or your baby!

Ron Hetrick:

and move her? And the profound answer is absolutely not, because if it drops one person, you're going to get sued through the floor.

David Turetsky:

Or holding a baby for even a second,

Ron Hetrick:

even a second

David Turetsky:

and it puts too much pressure on the baby and crushing the baby.

Ron Hetrick:

Yeah. You can let it assemble a car in a factory,

David Turetsky:

yeah!

Ron Hetrick:

but the second it touches a human being? Whoa! I mean, we use a robots to assist surgeons. But the surgeons right there,

David Turetsky:

right

Ron Hetrick:

guiding the robot. They're using the robot as an extension of their own hand. The robots, they didn't walk in the room and take types on the robot and then leave and go to lunch!

David Turetsky:

Stand aside, Doctor, I've got this!

Ron Hetrick:

Dr robot. a couple lawsuits away from failure.

Dwight Brown:

It's kind of like down here we have all the Waymo self driving cars that are a surrogate for for taxis. And you see all over the internet the videos of when the self driving software goes haywire, and same concept as Yeah, exactly. It's it's a great idea, but you know.

David Turetsky:

Well, the reason why I was going there, Dwight, was because to have somebody serve a McDonald's hamburger. There are so many human steps in getting the hamburger.

Ron Hetrick:

It's crazy!

David Turetsky:

From the fryer to the person!

Dwight Brown:

Right.

David Turetsky:

And you can automate it with. You can automate it with the conveyor belts. You can, I mean, we've been using conveyor belts forever!

Dwight Brown:

yeah

David Turetsky:

But it still needs to have somebody hand that bag to the person. I mean, you could do what we used to have in New York, which is the automats, but it still took a person to put it into those little doorways so you can open the door and get your food. So until all of that happens, people are necessary.

Ron Hetrick:

Absolutely

Dwight Brown:

Yeah

David Turetsky:

Sorry, let's close the door on that conversation!

Ron Hetrick:

That's the whole point of the paper is, you know, at the end of Demographic Drought, one of the things we said was, what we need to change the most is our attitude in the way that we look at, I need service, and I want this now. And this person messed up, and they got my order wrong, and why aren't they sitting me down? All this kind of self entitlement was, man, you was basically born out of a surplus of labor where you could be spoiled. Well, now you're not going to have a surplus of labor, so you're going to have to put up with some things. And it's best to start to adjust the attitude now and treat everybody with respect, then just be a jerk. We don't need more jerks.

David Turetsky:

Well, I wonder if that attitude still plays at home, like, are you gonna yell at your spouse? Are you gonna yell at your kids? Are you gonna yell at yourself for that same crap that would happen in a restaurant? Not a freaking chance, right? Oh, no way!

Ron Hetrick:

Why aren't you serving me?

David Turetsky:

Right, exactly

Ron Hetrick:

You'll get kicked out of the house right there!

David Turetsky:

Yeah, stop being a baby. Shut up and take your food when it comes. Because all of us, and I think one of the comedians, said that everybody should be forced, just like in Israel, you're forced to be part of the military. Every American should be forced to take a job, and Jillian, you can, you can quote me on. This every every American has to be forced to be in either a server job or a bus person job, so that they have to deal with the crap that other people give them because they think they're they're in some ways subservient to them!

Dwight Brown:

right

Ron Hetrick:

I was in Ponderosa, I was a busboy, my first job ever, and I'll tell you what, I don't want to be a busboy!

David Turetsky:

Yeah!

Ron Hetrick:

I know what it entails, it's made me appreciate the job. You know?

David Turetsky:

And that was downhill. I was a busboy too.

Dwight Brown:

Yeah, me too, yeah, that was actually one of my favorite jobs, believe it or not.

David Turetsky:

I loved it too. I loved it too.

Ron Hetrick:

I didn't, I didn't love it. Woolworths, Woolworths, I loved Woolworths, yeah.

Dwight Brown:

Motivation, consider it all motivation.

David Turetsky:

Well, we'll have to have another chapter of this where we go into our favorite stories from when we were bus people. I got some doozies! T^he title of this is going to be doozies from our childhood. Ron, obviously you can tell we had a ball with you. It was really wonderful. Thank you so much for being on our podcast.

Ron Hetrick:

Sure thing, I appreciate it. Enjoyed the conversation greatly.

David Turetsky:

Me too. Dwight, thank you so much.

Dwight Brown:

Yes. Thank you! Thanks for being with us. I love talking about this stuff.

David Turetsky:

Yeah, so you can tell we're very passionate about this stuff too. Thank you all for joining take care and stay safe.

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David B Turetsky

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