OPINION OUR VIEW

Pandemic amplifies disconnect between region’s business leaders, employees

By Tri-Cities Area Journal of Business

Are Tri-City business leaders and employees feeling grim that the region’s business climate isn’t improving?

A recent survey suggests they might be.

Business leaders and employees surveyed in Washington, Oregon and Idaho are becoming increasingly concerned the regional economy isn’t getting better, with 29% of leaders and 44% of employees reporting it has declined or weakened steadily since 2019.

Both groups largely attribute their concern to inflation and supply chain disruptions, according to the 2023 Business in the Northwest report from Washington State University’s Carson College of Business. This year is the survey’s sixth edition.

We’ve written plenty about how these issues are affecting local businesses’ bottom lines, so these results likely won’t come as a surprise.

Several restaurant owners told us in fall 2022 they faced steep price increases for food as well as food shortages. Anyone shopping for groceries also could confirm this.

Throughout the pandemic, supply chain challenges hit many sectors of the economy, from construction and health care, to agriculture, retail and manufacturing.

The WSU survey also highlights a growing disconnect between employers and employees, especially related to wages and benefits.

It’s important to acknowledge them.

Two-thirds of business leaders say they want to create more jobs for their companies but can’t offer competitive compensation.

big or go home on Washington’s housing crisis

As business leaders struggle to provide competitive compensation, they are instead placing greater emphasis on other benefits like flexible work schedules (36%), job security (30%) and manageable workloads (24%).

However, employees don’t share these same priorities.

More than 90% say they want a higher salary, while 37% say they want a more flexible work schedule, the survey noted.

Aside from pay raises, employees would prefer to receive company-paid health insurance (54%), paid retirement programs (35%), and guaranteed severance packages for employees at all levels (16%).

This is different from business leaders, who rank these non-financial benefits the highest: flexible work arrangements (36%), manageable workload (24%) and professional development stipends (14%).

Despite these disconnects it is nice to see that 75% of business leaders and 55% of employees surveyed are optimistic about the future.

These percentages are encouraging but they’re not enough.

To ensure this optimism is justified, it’s critical to promote possible solutions for the issues facing business.

This could involve better collaboration between employers and employees to find creative solutions for compensation and benefits. It also should include advocacy for policies at the local, state and federal levels that support small business and address economic concerns, such as tax incentives for small businesses, simplified regulations and more affordable health care.

Washington’s housing affordability crisis hurts every corner of the state. We’ve all heard stories. Nurses and grocery store employees can’t afford to live where they work. Young people are priced out of their hometowns. First-time homebuyers can’t afford a down payment. Seniors struggle to downsize in retirement.

We need solutions at scale for a crisis this big. Legislators have an opportunity this session to pass a historic package of housing legislation. Bipartisan support is helping move dozens of proposed bills to the finish line.

There’s a theme: We need more houses. All types, all kinds, everywhere and for everyone. We need to encourage more middle housing and speed up permitting for builders. We need more affordable starter homes, like townhouses and condos, and we need more housing near transit. The Association of Washington Business (AWB) supports policies that increase housing supply and opposes policies that would make housing more expensive.

Population growth and historic underbuilding has fueled the state’s affordability crisis, with prices increasing as demand outstrips supply. The state’s rental vacancy rate sits at 4%, below the 7% to 8% considered for a healthy market, according to a January report from Challenge Seattle.

Nearly 1 million Washington households are cost-burdened, meaning they spend more than 30% of their monthly income on housing, and the AWB Institute’s Vitals dashboard shows that more than 22% of renters spend 50% or more of income on rent. Lower- and middleincome households are more likely to fall in this category and are often forced to choose between important necessities.

Buying a home in Washington is becoming increasingly out of reach. More than 85% of households don’t make enough to afford an average priced home, with median homebuyers needing at least $38,000 to close. On average, renters have just $1,500 in the bank.

Kris Johnson Association of Washington Business GUEST COLUMN

The housing crisis is connected to the workforce shortage that many employers are facing. Many of our most common jobs, like administrators, sales and food prep employees, are most in need of affordable housing. Yet the gap between their wages and higher paid occupations is widening.

Housing is a top policy issue for 37% of the state’s employers, affecting their ability to recruit and keep employees. According to AWB’s 2023 Competitiveness Redbook, Washington has many competitive advantages for businesses, but we consistently rank as one of the most expensive areas in the country.

The Washington State Department of Commerce estimates we need to build between 20,000 and 71,000 housing units every year for the next 30 years to keep up with population growth, and according to the Challenge Seattle report, “Washington may need up to 2.5 million homes by 2050 to create a healthy housing market.”

Busting the maze of phone prompts is good customer service

There is no substitute for person-toperson connections – people talking with, listening to and understanding one another. It is called “customer service,” and it is the best way to resolve problems and retain customers.

Those employed and embedded in business are more likely to be located on-site, frequently see fellow workers and suppliers, and better understand the products and services. They are part of local communities.

So, whatever happened to people answering phones and directing callers to fellow staff members who can help resolve issues? Isn’t it better to have someone in your organization answering the phone and directing calls for assistance?

Yes, but it is more costly. Given the shortage of workers, receptionist positions are harder to fill. Outsourcing to call cen- ters has become an alternative.

Call centers are not new. They have been around for years; however, now they are more sophisticated.

Too often customer service is relegated to answering machines connected to computers programed with mazes of “phone prompts.” They are designed to keep callers from talking to people.

Just try to escape the maze and reach someone directly. Breaking into the goldholding vaults at Ft. Knox is easier than circumventing a computer gatekeeper.

The global contact center market amounted to almost $340 billion (U.S. dollars) in 2020. “The industry was expected to grow steadily in the following years to reach a value of $496 billion by 2027,” Statista.com reported.

The Site Selection Group says call centers which employ more than 2,000 people tend to cluster in larger U.S. metropolitan areas with populations of more than 1 million. Lower operation costs in Dallas, Jacksonville, Phoenix, San Antonio and Tampa attract massive operations. No city in Washington, Oregon or California made the Top 20.

While the U.S. houses many large call centers, other places such as India, Great Britain, Brazil and the Philippines are strong competitors. In past years, India attracted the most call center investment. That trend is changing.

“It is worth noting that the Philippines overtook India as the top call center in the world in terms of expansion and revenues. The country call center industry steadily expands as much as 30% a year, compared to 10%-15% per year in India,” Magellan Solutions reports.

Philippine-based Business Processing Outsourcing (BPO), a fancy name for call centers, helps in generating 1.3 million direct jobs. “Not only that, but the industry also helped to create 4.08 million indirect jobs. It also promotes countryside development, producing 280,000 jobs in 23 provinces.”

Why the Philippines? According to Magellan Solutions, the top reasons are it has a 98.18% literacy rate, friendly government policies and neutral accent. “Cost is