A lumber CEO who raised his minimum wage to $15 an hour and embraced 'overstaffing' explains why companies need to be 'pro-employee' to solve the labor shortage

• So-called labor shortages are still cropping up across the country, as employers struggle to staff up.
• But Stinson Dean, CEO of Deacon Lumber, told Bloomberg that his company is overstaffed.

Labor shortages have stuck around for months now, as businesses continue to say they can't find enough workers. But one lumber CEO say's his company is "overstaffed" - and he knows why.

"We have a very happy workforce and we're not working everyone to death because we refuse to pay higher wages," Stinson Dean, the CEO of Deacon Lumber, told Bloomberg's Joe Weisenthal and Tracy Alloway on the Odd Lots podcast.

The key to hiring, said Dean, may be understanding that employees have a newfound leverage, and accepting that it's time to be "pro-employee."

During a wave of newfound worker power, cleaning companies are turning down projects and canceling on customers because they don't have enough workers. A childcare company in California is shuttering because it can't hire. One jewelry store owner said that her husband had to come out of retirement to work, because she's so understaffed.

Some businesses have compensated by working their current workforces longer and harder. But that might only be aggravating shortages, since it leads to rampant burnout among workers, who then continue the trend of quitting.

"I just think it's such a short-sighted and stubborn practice by business owners to cry and complain about the cost of labor and take their most loyal, longest tenured, dedicated employees and work them down to the bone," Dean added.

It's a matter of meeting the labor market and employees where they're at, he says. The past year has been one of rethinking work, and what people want out of it. It's also a period where workers are taking action on changing their working conditions. For some, that's meant simply just quitting their jobs. In August, the last month that the Bureau of Labor Statistics has collected data on, over 4 million workers quit their jobs; it marked the fifth month of near record high quits.

Others are changing conditions from the inside out, with a wave of strikes cropping up and thousands of workers taking to the picket line to demand better contracts.

"We accept the fact that this economy is pro-employee," Dean said. "And if you're not good at that part, you just won't have a business, or you'll be running every aspect of the business yourself, because no one would want to work for you."

Dean isn't the only one to find himself overstaffed during a moment of chronic shortages. He notes that $15 is what he calls a "clearing wage" - even though it's still not law as the federal minimum wage, which has remained stagnant at $7.25 for 12 years.

Fellow business owners who haven't struggled with staffing have boosted wages into the $15 realm, Insider's Grace Dean reports. One MaidPro franchisee in Florida, Andrea Ponce, told Insider she was also overstaffed after she brought wages up from $11 to $14 in May.

In June, Iowa coffee shop Greene Bean Coffee raised wages to $15 an hour. Owner Rich Osborne told Insider he got about 50 applications in two weeks.

"That kind of upended the entire narrative out there that people don't want to work after the pandemic anymore," Obsborne said. He said that "smart people" realize investing in employees is an investment in business, and that he trusts his workers to run his business.

And for Dean, keeping pay high and conditions good is also a matter of business: "It's great business practice to pay lower level employees and treat them as if they're revenue producing high commission salespeople."