Indy’s tightening job market brings sign-on bonuses, rising wages

To attract job applicants at its soon-to-open Carmel store, Pittsburgh grocer Giant Eagle has turned to a tactic from pre-recession times: sign-on bonuses.

The $400 bonuses, payable in full if the new hire stays on the job 90 days, reflect a tightening job market in the Indianapolis area.

“There is a lot of competition right now in the Indianapolis area (for hiring), especially among retailers,” said Mike Maraldo, regional vice president of operations for Giant Eagle. His company’s use of the sign-on bonus, he said, “is an attempt to make sure we had the opportunity to really talk to the best of the best.”

Since the recession of 2007-09, the Indianapolis area hasn’t seen its job market as revved up as it is now.

In March, total employment in the metro area topped 1 million for the first time. It has climbed by 25,000 jobs since then, even as the jobless rate has dropped, to 4.5 percent in May from 5.7 percent a year earlier.

Job-hiring blitz

Last week, online retailing giant Amazon announced one of its largest hiring efforts ever in Central Indiana, saying it wants to find 1,400 new workers to staff its local warehouse fulfillment centers.

That will only deepen the demand for workers in an active job market that has little slack. An unemployment rate under 5 percent is considered essentially full employment, given the normal comings and goings of workers.

The result: Local employers looking to hire have been forced to get more creative.

Giant Eagle, for instance, not only is offering sign-on bonuses to find the 350 workers it still needs to hire for its upscale Market District store and nearby convenience market (about 150 have already been hired). It also has launched an ad blitz for applicants that includes TV, radio and newspaper ads, billboards and email blasts, Maraldo said.

“We’ve been pretty aggressive getting the message out,” he said. The grocer also has scheduled a second mass hiring fair for the store, to be held from noon to 7 p.m. Tuesday at the Ritz Charles banquet center in Carmel. The grocer’s first job fair last spring drew about 150 people.

Maraldo said he’s not sure whether this week’s fair will bring out enough applicants to fill Giant Eagle’s needs, given the job market tightening even more with Amazon’s ambitious hiring plans.

James Poore, owner/operator of four McDonald’s restaurants in Marion and Boone counties, said he has increased pay and benefits to his workers more over the past year than any year since the recession. That has helped him keep workers and attract a strong crop of job applicants to fill positions vacated by students going back to college and high school, he said.

“I am not really noticing a big dry-up in job candidates,” he said.

Pay up slightly

Average wages in the metro area are on the rise but not sharply. They edged up just 2.6 percent from 2012 to 2014, from $45,659 to $46,853, according to the Indiana Business Research Center at Indiana University.

“The labor market is indeed getting tighter. That’s good news for those who want to work,” said Jerry Conover, the center’s director.

The Indianapolis area’s growing demand for jobs continues to make it the state’s economic engine, he said. The 75,000 jobs created in the metro area in the past year were more than in the rest of the state combined (57,000), Conover said.

Karin Gorman, president of the Indianapolis office of Staff America, a staffing firm, said she has seen a boom in her business this year, led by demand for workers from clients that include a health care company, a warehouse operator and a call center.

But much of the Indianapolis area’s job growth in recent years has come in lower-wage jobs, such as those at call centers and warehouses. And many aren’t full-time and don’t offer benefits.

Of the 500 positions at Giant Eagle’s Carmel store, for instance, only 42 percent are full time, while starting wages for hourly jobs pay up to $11 an hour for workers with retail experience, Maraldo said.

Last year, the Indiana Association of United Ways released a report on Indiana wages that concluded 37 percent of the state’s households barely had enough income in 2012 to pay the necessities of mortgage or rent, food and other basics. In Marion County, 55 percent of households were struggling, the study found.

“That’s just a reflection of people making minimum-wage jobs. And a lot of families are having to work two or three jobs just to provide,” said Chris Brickey, president of the Central Indiana Labor Council.

Indiana last year had a record 38 percent of people younger than 65 who had dropped out of the conventional labor force that is tracked by government. That big pool of workforce nonparticipants presents a special challenge to employers now as they try to coax people to apply for open jobs.

“People are used to not working,” said Gorman of Staff America. “They’ve taken a sabbatical” from traditional paid work.

She said part of her job as a recruiter is “helping people transition back to work ... to understanding they need to go the extra mile (for their employer) and have a good work ethic. It’s re-educating people.”

For local employers looking to hire, she said, “skilled, dependable labor is going to be the toughest to find.”

Call Star reporter Jeff Swiatek at (317) 444-6483. Follow him on Twitter: @JeffSwiatek.