The Many Challenges of Being a Manager in California

Every human resources professional has stories to tell about the challenges of hiring in California. And a few stumbling blocks remain constant: the high cost of doing business in California; labor pool difficulties; and as of late, the slow economy. Rolfe Jones, director of human resources for Pacoima-based Arc Machines, Inc. (AMI) said, in general, he doesn’t struggle with hiring in California. Any time he advertises a job opening he receives stacks of resumes. AMI currently employs 200. But in the down economy, the problem is that the overall quality of applicants is less than years past. “Many companies are trying to hold on to quality employees as long as possible,” said Jones. The advantage of the down economy for employers, however, is that prospective employees are often willing to accept lower salaries. Jones said current salaries are a little more realistic than some of the over-inflated salaries of the past. California is a very pro employee state, he added, which can be a disincentive for doing business in the state. Employers big and small pay massive overhead for workers compensation, insurance, Social Security and other taxes. “If you take on one extra person, your costs go up so much,” said Jones, adding the state needs to do more to increase the amount of incentives it offers to encourage certain industries to stay in California. Allan Fisher, executive recruiter for Premier Financial Search, agrees with Jones that California and Los Angeles is not very employer friendly. “And I don’t see that changing any time soon,” said Fisher. Some of the challenges he faces include the high wages in Los Angeles, prospective employee’s expectation of extensive benefits packages, and the cost to businesses to hire somebody new. Premier specializes in placing accounting and finance professionals. Another challenge is that many job seekers in California and Los Angeles are from other countries and do not speak English very well. They have stellar technical skills but are lacking communication skills, said Fisher, who has placed people from 30 or more different countries. And in the current economy, many people being laid off lack in the communication department. More selective “We’re starting to see some light in terms of hiring,” he said. “But companies that are hiring are a lot more selective. They want what they want: superior technical skills and superior communication skills. At the risk of sounding politically incorrect, Fisher said some native Californians have a different work ethic than people from other parts of the country. They expect to work a minimum, and quality of life is everything to them. A number of employers actually prefer hiring people from elsewhere, because they have a better work ethic, he said. Bill McLeod, director of human resources for the City of Palmdale, said cities face some of the same challenges, but some unique ones too. He’s running into a scarcity of qualified candidates for certain high-level city jobs. For example, the city is currently looking for a director of libraries and director of planning, both of which offer salaries well in excess of $100,000 per year. “The challenge we face is that if we find a good applicant, say from the Midwest or Southern U.S., as soon as they start seeing housing prices in the area they say ‘No,’” said McLeod. “It’s kind of an irony in the down economy.” Another hurdle cities and counties face in hiring, especially in this economy, is they’re heavily dependent on property and sales taxes. In fact the City of Palmdale has gone through a 30 percent reduction in workforce. Public employers are also known for having high benefit loads, said McLeod, which is an issue that has to be re-examined in order to further cut costs. “In the public sector, there’s almost going to have to be a structural change in benefit levels,” he said, adding the thing that’s frustrating for cities is that the State of California has not made equivalent cuts in jobs and elsewhere. California’s cost of living is by and large the biggest hurdle when hiring a new employee, said Kent Haney, director of human resources for The Master’s College. Even though home prices have decreased, they’re still higher than many states. And rental rates can be shocking to prospective employees. Being a non-profit organization also makes it hard to hire doctorate level faculty, he said, because the school’s salaries are typically less than those offered by state and private organizations. Hiring administration workers is a lot easier. On the legal side, Haney said it’s tough to navigate California’s wage and hour, workers compensation, sexual harassment and other laws. “They keep hitting you with regulation, after regulation, after regulation,” he said. Some of those laws are necessary, he added. “But to be in human resources anymore, you practically need a legal degree.”