Solving the problem with workforce shortages linked to the dearth of affordable housing on the Coast was one of the top issues for a delegation of 20 businesses leaders from the Coast who recently traveled to Washington, D.C., to lobby congressional leaders.
Brian Sanderson, president of the Gulf Coast Business Council, said a major focus of the lobbying effort was to urge congressional leaders to adopt the Housing America’s Workforce Act that would provide tax breaks for employers to provide direct assistance to workers with housing costs. Under the act, the housing assistance benefit would be tax free to workers.
“It would create a new business tax credit that would provide employers with an incentive to help offset the cost of assisting employees with affordable housing,” Sanderson said. “It could be rental assistance, down payment assistance or mortgage assistance. This is one of those issues that it is good for business and good for workers, as well. Businesses need workers, and workers need a place to live. This could help with both.”
The business leaders who traveled to Washington the first week of June had workforce availability high on the list of needs. Sanderson said this is a critical issue to Coast businesses.
The issue of affordable housing for workers isn’t unique to the Coast. Across the country, low- and moderate-income families are being priced out of the housing market.
A summary of the proposed legislation provided by Sanderson said that housing production has failed to keep pace with job growth, which continues to push affordable housing beyond the reach of an increasing number of working families. Employer-assisted housing (EAH) programs address this housing challenge from a new perspective by allowing the private sector to play a direct role in promoting housing affordability. The Housing America’s Workforce Act builds upon these efforts by providing incentives that will help expand EAH programs nationally.
The Housing America’s Workforce Act provides a tax credit equal to 50% of the cost of qualified housing expenses for eligible low- and moderate-income employees, which takes into account up to $10,000, or 6%, of the employee’s home purchase price (whichever is less) and up to $2,000 in the case of rental assistance offered. Rental assistance could be used toward security deposits and rental payments. Homeownership assistance could be used to subsidize down payments, closing costs, financing costs, contributions to second mortgage pools, mortgage guarantee programs or contributions to an employee homeownership savings account.
While some employer-provided benefits such as health, dental and life insurance are tax free to employees, current federal tax laws do not currently include housing as a tax-free employee benefit. The Housing America’s Workforce Act treats housing assistance as a nontaxable benefit by excluding from taxable income up to $10,000 in home ownership assistance and up to $2,000 of rental assistance received.
The act would also establish a competitive grant program available to nonprofit housing organizations that provide technical assistance, program administration and/or education and outreach support to employers undertaking EAH initiatives. That is being advocated since most employers lack the knowledge and expertise needed to undertake an EAH initiative.
Other creative solutions
Coast employers are also coming up with other creative solutions to recruit and retain employees, said Michelle Daniels, staffing division director for The CPI Group.
“One of the programs we are seeing is on-the-job training,” Daniels said. “Whereas before recruitment might have been for experienced candidates, now employers are much more open to training someone into a position rather than requiring the experience before hand,” Daniels said. “Another very prevalent recruitment tool we are seeing from companies is more educational benefits like tuition reimbursement and scholarship programs.”
There is a lot of concern along the Coast that many people in key positions nearing retirement are considering not rebuilding and moving to other areas once they retire. One way that employers are attempting to retain those individuals is to offer enhanced retirement packages.
“If they stay for a longer period of time, they get a better retirement offering than if they didn’t stay,” Daniels said. “We are also still seeing sign on bonuses. Usually those are set up in a way that an individual might receive a certain amount at the time of hire and the remainder of the bonus after they remain in the position for a certain period of time, three to six months being common.”
Providing a good working environment such as flexible hours and incentive programs for good attendance and safety records are also more important than ever.
“Those types of things are smaller but they do contribute to the overall experience a person has on job, and could be the reason a person stays with a job versus moving to another,” Daniels said. “This is especially important for parents of small children. If they are able to take time off work and go to a t-ball game, and make up the time somewhere else, then that is a big benefit.”
Employers are also recruiting outside of the state and sometimes outside of the country to fill vacant positions. Daniels said that is especially true in the hotel and restaurant industry and in construction. In most cases companies are providing some sort of housing for the workers brought in.
For the state’s largest private employer, appealing to patriotism is one of many avenues being taken to help fill the ranks.
“Northrop Grumman is building products that defend America’s way of life and we will continue to use that as part of our recruiting efforts because it is a job that carries so much more than a paycheck,” said Bill Glenn, communications manager, Northrop Grumman Ship Systems, Pascagoula. “Right now, Northrop Grumman is focused on several different areas of recruiting employees. The company continues to be involved in job fairs throughout the entire Gulf Coast region and in Mississippi. We have strengthened our relationships with all local and state higher learning institutions and regularly visit campuses with human resources personnel to sell Northrop Grumman. We have also extended our apprentice program to local high school so that seniors can work in an on-the-job training environment.”
Glenn said healthcare, vacation, tuition reimbursement continue to be significant to their applicants and employees.
“Northrop Grumman offers a strong benefits package, and obviously this package is a very important part of the recruiting process,” Glenn said. “We are looking for career-minded employees, and the benefits package provides a strong attraction to applicants looking for a strong future and career. It is also extremely beneficial in retaining employees considering some benefits expand as employees work longer at Northrop Grumman.”
Northrop Grumman recently increased hourly wages as part of a new union contract. Many other employers are also finding that it is necessary to increase salaries. The Coast’s cost of living is higher than it has been in previous years, and wages must increase for people to be able to pay their bills.
But paying higher wages can be very difficult for small businesses.
“Our small business guys have to compete with higher wage levels from bigger industries,” said National Federation of Independent Businesses state director Ron Aldridge. “On the small business level, it is, ‘How much can you pay me for the job?’ Some of them can afford to pay more and some can’t. The bottom line right now is it isn’t extra benefits that are most important, but how much they can pay on an hourly basis.”
With the high price of gas, many people are looking for a shorter drive to work. Some people may trade a job with a 45-minute commute for one that involves driving less. With the U.S. 90 bridge between Pass Christian and Bay St. Louis open for two lanes of traffic, and the U.S. 90 bridge between Ocean Springs and Biloxi scheduled to open two lanes in November, that helps both employees and employers.
“One of the best things happening down on the Coast is the bridges being completed,” Aldridge said. “Once the Ocean Springs bridge opens, that will be huge in terms of people being able to get back and forth to work. For some folks it is a 45- minute drive to work even though it may be just across the water in eye sight.”
Contact MBJ contributing writer Becky Gillette at email@example.com.