Labor steps it up.

Byline: Sherri Buri McDonald The Register-Guard

CRESWELL - At Wise Woman Herbal, a small manufacturer off Interstate 5, every workday begins with 10 minutes of stretching and yoga. The company pays employees their regular rate to participate, and all 18 of them do.

The stretching is one of several unconventional offerings in the company's benefits package. Others include a 15-minute massage and a catered lunch every month.

Owner Ken Koenig said he offers such benefits on principle.

"My feeling is, if people are going to spend a third of their lives here at work, we want to make it as enjoyable an experience as possible."

That principle also is helping Koenig attract, and hold onto, skilled workers in the tightest local labor market in a decade.

Lane County's jobless rate was 5.1 percent in June, its lowest point since 1997, according to figures from the state Employment Department.

Employers vying for workers are responding to the tight labor market by adding benefits and recruiting more aggressively - some even luring workers away from competitors.

"Employers have to look harder for good employees, and they may have to increase wages," said Brian Rooney, an Employment Department labor economist.

The low unemployment rate has been a boon for workers, giving them the chance to look for a better job, or demand more pay and better benefits in their current one.

Gabriela Snyder discovered that when she recently took a job at Summit Bank, after working for Umpqua Bank for the past nine years.

The move was a step up in wages and benefits, she said. Snyder had been Umpqua's Internet banking manager; now she oversees all things technical for Summit. Snyder said she wasn't looking for a new job, and Summit Bank representatives contacted her.

"Eugene is a small community, and people pretty much know each other," she said.

Lindsey Greif, 24, who began working this month as an account manager for Cawood public relations firm, said this job search was much easier than when she looked in 2006, with a freshly minted University of Oregon marketing degree.

Greif said she responded to an Internet posting for the Cawood job in late April. The firm contacted her that afternoon, and she accepted the job in mid-May.

Greif said that, by contrast, it took her a solid month to find her first job out of college.

"And that was with me doing my darnedest to get my name out there," she said.

The new job is a move up for Greif, who is now a salaried employee instead of an hourly one.

"I felt that my first job was kind of a starter job, and this is really something I look to make a career out of, so it was definitely worth the move," she said.

New college graduates also are likely to find it easier to get their first jobs. "It's a good time to be a graduate," said John Mitchell, an economics consultant based in the Portland area.

Job prospects nationally for recent college grads are strong, and starting salaries are rising for graduates in many majors, including accounting, business, marketing, engineering and computer science, according to the National Association of Colleges and Employers.

Bracing themselves for the coming wave of retiring baby boomers, many organizations have rolled out management training programs enabling graduates to start their careers in mid-level positions, said Rick Guerra, associate director of the University of Oregon Career Center.

The tight local labor market isn't a passing phase, employment experts say.

"I think it's fairly well entrenched," Rooney said. "Even if there are some job losses and the economy slows, it will take a little while for the labor market to loosen up."

Virtually every industry in the county is adding jobs, except manufacturing, Rooney said. Manufacturing typically pays more than most other industries, so it's unclear what effect the loss of factory jobs will have on the county's average annual wage. However, other industries, such as health care, pay fairly well, he said.

The chore of finding skilled workers and hanging onto them weighs heavily on area employers.

In a recent survey of 29 local manufacturers by the Lane Workforce Partnership, 86 percent said their biggest challenge was maintaining a skilled and motivated workforce, and 77 percent said it was finding qualified applicants.

"I used to want people who were interested and skilled in my industry," one respondent said. "Now I look for people who show up and want to work."

The shortage of skilled workers can shackle a business by dragging down productivity and impeding growth, the survey respondents said.

Employers are responding by focusing more attention on their existing workforce, said Chuck Forster, executive director of the partnership, a nonprofit workforce development agency.

Many are introducing mentorship programs that pair young workers with more senior employees, providing leadership training, and offering richer benefit packages, he said.

"People are just looking for creative ways to enhance their benefit packages and set their companies apart," Forster said.

Koenig bought Wise Woman Herbal five years ago and has been adding benefits ever since. Four years ago he brought in a massage therapist to give 15-minute massages to employees once a month. He also treats employees to a monthly catered lunch, during which employees learn about the company's line of 350 herbal products.

Other perks include profit-sharing and a $25 birthday gift certificate at Sweet Life Patisserie in Eugene. Those are in addition to above-minimum-wage pay for all positions, and traditional benefits such as paid holidays, vacation and health insurance, Koenig said.

He launched the morning stretching about three years ago, after an employee had a workers' compensation injury.

"Everyone really looks forward to it," he said, and the company hasn't had a workers' comp claim since.

Other employers are also sweetening their benefits packages.

Avamere Health System, which operates skilled nursing facilities in the Willamette Valley, including two in Eugene and one in Junction City, is constantly trying to add perks and flexibility to its benefits plan, said Marsha Warner, corporate staffing manager, who is based in Wilsonville.

"Our employees are very aware that it's a tight labor market and will leave and go to the company next door for a more attractive package," she said. The package at Hynix's computer-chip plant in west Eugene is "a huge draw for recruitment and retention of entry-level workers," company spokesman Bobby Lee said. Hynix employs 1,215 people.

Manufacturing technicians, who start at $11 an hour, are eligible for the company's full benefits package after 90 days. The medical plan costs just $10 a month to cover an employee or $37 a month for a family, said Don Danielson, who oversees recruitment and training at the plant. In the past few years, Hynix added some nontraditional benefits, such as child care reimbursement of $100 a month per family, and free legal and financial services.

Danielson said the company has no trouble filling its manufacturing technician openings. Specialized positions, such as engineers and managers, take a bit longer to fill, he said. Hiring now is easier than in the late 1990s because several chipmakers, including an Intel Corp. plant in Colorado and Micron in Boise, have recently laid off workers, Danielson said.

A shortage of skilled workers is starting to cut into productivity at States Industries, a hardwood plywood manufacturer with a 500-employee plant near the Eugene Airport, said Kristee Neumann, human resources coordinator.

"We may get quite a few applications, but we're still struggling to get the right mix of skills," she said.

"Work ethic is a big issue," Neumann said. "You can train (on-the-job) experience, but you can't really change people's values," such as wanting to do a good job or wanting to advance.

The company is reviewing its pay and benefits, as well as its strategies to recruit and keep workers, she said.

The county's average annual wage figures for 2007 aren't yet available, but 2006 numbers show that a tightening labor market may be starting to push wages up, said Rooney, the Employment Department economist. Lane County's annual average wage was $33,234 in 2006, up 2.9 percent from the previous year, he said. The average worker probably didn't feel much richer, though, because regional inflation was 2.6 percent in 2006, according to figures from the Employment Department.

The tight local job market may strengthen labor unions' positions when they bargain for better pay and benefits as labor contracts near expiration, Rooney said.

"There's been some strikes, and workers are starting to demand more than they had in the past few years," he said.

Locally, the carpenters union and Teamsters Local 206 members at Western Beverage Co. staged short strikes to demand enhanced wages and benefits.

But wages here still lag behind statewide and national averages. Lane County's average annual wage in 2006 was 88 percent of the Oregon statewide annual average wage and 79 percent of the U.S. average annual wage, Rooney said.

Many factors come into play, he said. Lane County has a different industry mix than other parts of the state and country, which have more manufacturing with high-paying research and development jobs. People in Lane County may be willing to accept lower wages in exchange for the area's high quality of life - under a theory popularized by local economist Ed Whitelaw that the quality of life represents a "second paycheck."

Greater use of temporary workers may further dampen the average, Rooney said.

A shortage of skilled workers may already be putting the brakes on growth at some Oregon companies.

"I've talked to businesses in Oregon that would expand if they could find the people," said Bill Conerly, an economist based in the Portland area.

Jack Roberts, executive director of the Lane Metro Partnership, said he hasn't encountered that in Lane County.

"We believe we can still offer a quality workforce," Roberts said. Many workers in Lane County are underemployed, he said, with skills and abilities they want to use but don't in their current jobs.

Site selection experts who recently visited the area "don't seem to be worried about the overall unemployment rate," Roberts said.

Besides, the labor market is tight throughout much of the country, he added. "We don't anticipate that that's going to be a greater problem for us than for anyone else."

In June, 18 states reported seasonally adjusted unemployment rates well below the national rate of 4.5 percent, according to the U.S. Bureau of Labor Statistics.

U.S. UNEMPLOYMENT RATES

Seasonally adjusted figures for June

Highest: Michigan, 7.2 percent; Ohio, 6.1 percent; Mississippi, 6 percent

Lowest: Hawaii and Montana, 2.4 percent each; Idaho, 2.5 percent; Utah, 2.6 percent

Oregon: 5.1 percent