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After several years of encountering, understanding and being hamstrung by the challenges of a very tight labor market, mid-market manufacturing CEOs may have turned a corner. More U.S. factory chiefs aren't simply accepting their plight but instead are finally mitigating the problem of tight talent, even as unfavorable demographics and other factors are preventing them from solving it altogether.
That was the inescapable conclusion at a roundtable discussion with a few dozen executives and owners at the Chief Executive Smart Manufacturing Summit in Louisville this summer. One after another shared best practices, innovations and hacks that have helped them gain at least some short-term traction against their labor frustrations even as they continue to work on long-term solutions.
"The common theme [among manufacturing executives looking for talent] is, 'Where are we going to find workers, how do we upskill them and how far down into education levels can we go?'" said Brock Herr, senior vice president for business development for the Indiana Economic Development Commission, who co-hosted the roundtable.
The difference in response to those questions this time—compared with similar roundtables a few years ago—was that the assembled executives were equipped with some positive answers and less apt to say they were throwing up their hands at the problem.
Darrell Elrod, for example, is focusing on making employees of Chase Construction Group happy for the crucial first couple months on the job. Andrew Zucaro is hiring retirees at 20 hours a week at Azco, instead of full time. Greg Shank is varying the work experiences of employees of Kountry Wood Products so the cabinet manufacturer can better compete with the higher pay in the recreational-vehicle industry in northern Indiana.
And Pattie Byron is using paid time off as a new incentive. "We need them there during their shifts, and they can't take [more] breaks, but perhaps we can give them extra days off, such as their birthdays," said the CEO of industrial-services provider Byron Products. "That's a start."
The roundtable revealed a slew of other talent tactics being deployed by manufacturing chiefs from all over the country, including:
Hold Onto Them Early
Chase focuses heavily on retaining new workers for the first 60 or 90 days because its experience is "you can keep them" if they stay on the job for that long, said Elrod, who is executive vice president. "The retention rate is very high after that."
A new factory worker "is not used to standing all day or in the heat; it's different than what they're used to," he said. So "maybe you need to take it easy on them at first. You also need to say to your [veteran] workers, 'You've been here a long time, but there's this new guy coming in,'" so look after the new employee. "It's a cultural thing, and we still haven't figured it all out."
Accept Attrition
Jeff Stone said fast integration of new workers has become key to how his company has adapted to record turnover. "We have five new employees every week, but five also leave out the back," said the CEO of wood-component maker Navy Island.
"So on the shop floor, you can't afford to put someone in a position and hope they'll be there for a year or five years. It'll probably be three months. So how do you maximize the next three months? You bring them up to speed quickly to not make mistakes, to make them productive. You bring in different automation and systems, and it's a lot about training and really simplifying what they do."
The trickle-down effects include the necessity to simplify manufacturing processes and, therefore, product lines. "It may mean telling your customers you can't offer [some things] and focus on a few," Stone said.
Enter the Friend Zone
Azco "recently hired some younger people through word of mouth," and as employees "they are bringing friends," said Zucaro, who is president of the maker of cutting equipment. "Good people bring more good people. We try to create an environment where workers can have their friends come to work with them."
Azco's bring-a-friend-to-work pitch extends to retirees. "We look for them and encourage them; it's just an awareness," Zucaro said. "We talk constantly about our company, what we provide people, and when people understand it's an environment they like and want to be around it, they recommend it to their friends."
Elevate Supervisors
Kountry Wood Products has been working with its front-line supervisors to transform them "from working foremen to actual managers," said Shank, the CFO. "There's a whole series of steps. Lunch meetings. Talking with leadership that skips over two or three levels of management. There's a lot more connectivity from our executive group to our front-line managers."
For instance, the company has involved line supervisors in discussions with their crews about newly offered wellness screenings. "If you put [supervisors] in the room they're part of how to get the screening done, yet they also do the production for that day, so they're part of the solution. It's transformational [because] now this person isn't just about supervising this particular piece of work; that group leader is now part of what it means to work here," Shank said.
Switlik Survival Products is trying a similar tack. "We have expectations of front-line supervisors to be more managerial, but we realize we haven't provided sufficient training," said Sarah Switlik, chief operating officer of the maker of outdoor-survival gear. "So how do we do that? Our bandwidth is tight. How do we bite it off in chunks so that it's not overwhelming or putting people in positions they're not yet comfortable with?"
Take Care of Their Kids
Providing day care for workers has emerged as a leading innovation at some manufacturers. For instance, Herr noted that Subaru established both a daycare program and a healthcare facility at the automaker's plant in Lafayette, Ind.
But "will day care work on a smaller scale?" Brian Hunt wondered at the roundtable. "We've looked at it before, and has anyone come up with a creative way to enable [day care] for a smaller [facility]?" asked the COO of California Faucets. "You need 250 [workers], and our [smaller] size doesn't make sense unless there is some way to partner with someone to facilitate it."
Throw the Net Wider
PUC Services found recruiting "tougher and tougher, but then we did an internal look at it and realized: We're only targeting 40 percent of our population—traditional, predominantly male Canadians," said Robert Brewer, president and CEO of the utility-services company in Ontario. "How do we expand that?"
So to recruit more women, PUC began offering maternity benefits in the form of paid time off, as well as leave for new moms and dads. And it reached out to immigrant populations by, for instance, celebrating holidays other than traditional Christian observations.
"It was about how to make them feel welcome in the workplace, how to make it a destination," Brewer said. "We've had high success. We've cut our turnover down to probably 3 percent."
Illuminate Pathways
Herr said "opportunity" is the operative word in manufacturers' retention efforts. "Be very clear and articulate that there is the opportunity for growth; be very clear about what steps that takes; and provide opportunities," he said. "What resonates with everyone is an opportunity and a clear path of support along with that."
Stone suggested diverting part of marketing budgets away from customers and toward employees. "Apply that to an employee video for orientation and to show the opportunities that exist" at the company, he said. "Show where employees started and where they end up. That helps people understand this is a future, not just a manufacturing job for the next year—that it will grow into something more valuable."
To make manufacturing careers more appealing to young people, Herr said some small Indiana companies have invested in VR and AR headsets. "In high schools and technical colleges, it's an impactful recruitment tool to see," he said.
At an entry cost he said was around $3,500 for "a really nice VR set," Stone said, "we need to be initiating and onboarding using VR or AR to understand operations more efficiently. [Because] everyone is competing for that new generation, and that's what they're expecting."
Darling Industries is "bringing eighth-graders out to plants with career counselors from their schools," said Donald Bockoven, CEO of the maker of polyester fashion fibers. "The counselors had no idea what jobs are available in manufacturing and what careers are required. We walk the eighth-graders through our machine shop and get their feedback."
Tap Into Purpose
Manufacturing employees want to have "purpose," just like Silicon Valley code writers and New York City digital marketers.
"When we go to a high school, I don't talk about manufacturing," Byron said. "Instead of saying 'manufacturing,' we talk about aerospace and medical" products and customers. "That's more exciting than saying 'manufacturing.' If we can, we bring something we assemble. We talk about the larger company and focus on the end unit for the industries we serve and how important that work is."
Added Shank, "A lot of it is just saying that [you're doing] something bigger. We make kitchen cabinets for someone's house. Imagine all the conversations in these kitchens, and we're making the cabinets for them."
Heraeus Medevio seeks to communicate "that what you're doing right here [in the shop] affects this bigger unit, and a good or bad part will impact someone's life," said Michael Wood, senior manager of operations for the medical-device maker. "YouTube is amazing for this. There are tons of videos there [to answer when] new employees ask, 'What does this little thing go to?'"
Purpose also can comprise workers' ambitions for themselves. For example, in an effort to boost employee pride in what they do as makers of delivery trucks, Summit Body & Equipment launched "Summit in the Wild." Employees took photos of a Summit-made truck they spied out in the world—such as a plumber's van or a bread-delivery truck—and submitted it in a drawing for a $250 gift card.
"Then we use that in recruiting, and kids get engaged," said Jeff Blater, director of operations. "We focus on the end product, not what we're doing that is a component of that. It's been phenomenally successful for us."
The National Coalition of Certification Centers addressed this challenge head-on by creating what it calls a "national sign-in day," akin to what U.S. colleges and universities do when they've landed prize athletic recruits out of high school. "We said, 'Why can't every student have that kind of pride?'" said Roger Tadajewski, executive director of the not-for-profit. "They're the core part of America."
So on that day, hundreds of high-school students nationwide sign a non-binding letter of commitment to enroll in a particular community or technical school in the fall—say, a welding program. They put on an NC3 hat and conduct a ceremonial signing at the school that can be attended by admiring family and friends.
"You've got 800 people at the school, with industry, recognizing this day," Tadajewski said. "That starts to evolve the perception of manufacturing. We can set a new template for a new history going forward, [and] it can be about pride."
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications.
This article is adapted from www.ChiefExecutive.net with permission from Chief Executive. © 2023. All rights reserved.