Buchanan: How to support industrial businesses? Build a modern workforce

First, I have to thank my neighbor, Rudy, my staunchest critic and biggest advocate, for this column idea.

As I pen this post from my garage office, I’m reminded of myriad conversations I’ve had lately with manufacturing and logistics companies throughout the OC and the IE.

Ask any small business owner what their number one concern is these days – AKA what keeps them up at night – and universally you’ll hear, “the lack of quality employees from which to choose.”

Doubt what I say? Just drive around and you’ll be feted with featured “now hiring,” “help wanted” and “apply within” signs. One of our clients operates an adhesives manufacturing operation and has resorted to “bounties.” He pays his existing workers $500 per referral that results in a hire. His only qualifier is the new employee must stay for at least six months.

You may be wondering what any of this has to do with commercial real estate? Just this.

Relocations are triggered by several factors, one of which is the expansion of commerce. Added business is fulfilled by adding employees, machinery or both. Commercial real estate houses these enterprises. If a building has capacity (places for the extra folks to sit or spaces in the plant for the equipment), there is no issue. In the alternative, it’s a big issue.

Now, the company must place a “band-aid” by doubling up offices, adjusting the shop or moving to larger quarters. As I’ve written ad nauseam, there is an acute lack of vacant industrial space in the market, so the problem worsens. But, this tete-a-tete will be tabled for another time. Today, I want to focus on the shortage of workers and my suggested fixes.

I read with great interest today how California’s unemployment rate is one of the highest in the nation. Hmmm, so why is hiring such an issue, some may wonder. In the early days of the pandemic, our government paid people to not work. Good decision? Initially, yes. But from what I hear from employers, the prolonged subsidy has created lethargy in our workforce. After all, why rise early, schlep the freeways and encounter a cranky supervisor if you can make just as much by NOT working?

In my view, the drought is more systemic. I believe we’ve done a substandard job of preparing tomorrow’s workforce for the jobs that will exist when they graduate high school or college.

Specifically, in our trades — carpenters, painters, electricians, plumbers, welders and contractors who repair air conditioning and heating, appliance and flooring installers — there’s a huge imbalance. If you’ve got a stopped-up drain, good luck getting someone out to repair it anytime soon.

Most of these trades are learned through an apprentice program. Unions understand and train accordingly. But many times, a more seasoned non-union individual passes along her craft to the next-gen. But what about vocational training in high schools? Remember the days of the woodshop, auto shop and home economics? And how about building stuff?

The next-gen should be willing to learn because the income potential is unbridled! Maybe these jobs lack a “coolness factor.” It’s not that appealing to work in a hot attic vs. an air-conditioned suite. Plus, we as a society are partially to blame. But, I won’t go there.

As to skilled labor such CNC machine operators, plastic injection molders, die-cut operators, truck and forklift drivers, I believe the solution might lie within our community colleges.

These schools are wonderfully positioned – and state-funded – to serve the local employer needs. How about a partnership with the largest local job creators and academia to understand the needs and accommodating them?

With a little planning and leadership, we got this!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.