Springfield Business Journal_2019-02-25

Architects & Engineers Read all about it MARCH 25 COMING NEXT Jill Phillips Professional EOS Implementer - Business Coach Manufacturing is more than putting parts together. Its a growing industry making an economic impact not only for us today, but a viable option for workforce development for our future generations. “ PRESENTED BY SPRINGFIELD BUSINESS JOURNAL · 11 FEB. 25-MARCH 3, 2019 numbers are out there? Devore: We’re chasing after on-time de- liveries. Obviously, retention is, as well, because we have increased our rates of pay to attract top welders and we want to hang onto them. You can’t even turn on the radio without hearing an adver- tisement for welders. Perches: We meet with anywhere from 120 to 150 companies each year, a vast majority of those being manufacturers. And in the fourth quarter alone we had probably close to 90 percent of those companies that expressed or anticipated almost a double-digit growth for the calendar year. Of course, a lot of what drives that activity is, “Yeah, we can continue to grow, but we can’t grow anymore without people.” For us at the chamber, we see our biggest investment and the biggest return on investment by promoting skills and getting people the right skills. So, those people that you do keep, whether it’s the tuition reimburse- ment programs or the different resources that are available at your companies, that they’re able to stay at the company but continuously able to move up and up. Olson: Anything particularly unique that you’re doing on the recruitment side? Myers: Social media pops to mind. Three months ago, we were going to do a com- mercial. We finally made TV. We were so excited. [laughs] We had brought in six young trainees. We said, “OK, we’re going to do this commercial. What do you guys think?” They said, “A com- mercial? On TV? We don’t watch TV. We watch Netflix.” Social media has been a big attractor of volume. This is a volume game at this point. We interviewed 1,296 people last year. We hired 56. We think we spent $260,000 in just interviewing process, retention efforts, hanging signs on the building. The social media piece of it was huge for us. But also we did referral bonuses. Of the 56 we hired, 36 were from referrals. We’re considering at my location purchasing our own app. We’re just always trying to figure out how to communicate. Money talks Olson: What are the wage trends in your shops? We know statewide, it’s about $57,000 annual average compensation [for manufacturers]. Devore: Average in my shop is not $57,000. We do pay welders well and our wages have gone up the last two years. They’ve gone up more than 12 percent for a welder. We want qualified welders. People who can read a blueprint and fabricate and not just weld. Myers: I’m assuming that $57,000 is across all positions. We’re right there with that. Our wages have gone up. If you want the brass ring and you want more, we’ll give you the path – but you got to walk the path. In our satisfac- tion survey, pay was probably one of the lowest-rated questions that we had had historically. In the last two years, we have seen tremendous improvement in that score. Now it’s a new standard. With the open job market and as few of people that there are ... everybody’s go- ing to compete and somebody’s going to leave for 50 cents and somebody is going to leave for a quarter. And that’s OK. But I would like for people to look at things like health care and retirement plans. Devore: That’s great because they do have an awesome package, and they are large enough that they can have great health care offered to their employees at a great rate. When you look at a small manufac- turer, like myself, we are at the opposite end of the spectrum. So in that case, we have to offset with higher wages up front. We do offer health care, but it is very difficult to get. Tariff talk Olson: With the recent international trade deals and tariff changes, what has been the impact locally on your businesses? Devore: When they were just talking about tariffs, our steel prices started going up. There was a point in early 2018 where we were getting notices: One day plate was going up, next day beams are going up, the next day tube was going up, and it seemed like every day. We literally had to change our model to make sure we were covered. We were stuck with a few contracts that we hadn’t bought material for yet that we had to take a hit on. We started changing our quotes to hold them for three days instead of 30 days or 60 days. We started buying material as soon as we got a con- tract. Prices actually had started to just level out, but now, of course, with new talks of doubling tariffs, I feel like it’s going to start going up again and so does the market. The new (North Ameri- can Free Trade Agreement), moving to Mexico, Canada, America, we don’t know all the details of that yet, but I know it’ll have an impact. I know it puts more demands on the U.S., Canada and Mexico to produce more of the steel that we consume, which in turn will cause manufacturers to have to get up and running, increase their capacities. Perches: What we saw ... was a lot of that hurry up and wait. There was that initial response with prices, like you said, not even being official and prices jumping up. It’s, “All right, I need to get all my materials for projects one, two, and three – and four and five that aren’t even con- firmed.” There were a lot of talks of how do we restructure this deal? Do we pass along this cost to our customers or do we find a way to absorb it ourselves? Myers: There could be a real interesting (leveling) of global competitiveness with these tariffs. I don’t like them cur- rently at this point. They’ll hit different businesses that we have $400,000 or $500,000 just in cost increases this year. When I tell you that manufacturing is uncertain, this is where I’m talking about making investments into why do we buy it anymore? Why don’t we make it again? Future is now Olson: What are some ways that you are integrating technology to improve and advance your workflow? Myers: Technology has to come in. You want people to have good quality jobs. Part of some of the retention in some industries is because it’s a crap job. You don’t want to do it. We have those jobs where you can remove people from hazards, and you can have a better qual- ity people. Part of my struggle with the greater Springfield area is the technical aptitude to keep that technology running. This town is not full of robots. One of the Chrysler plants I used to work at, when I started, there were 20 robots; today there’s 2,000 robots in this factory. Tech- nology needs to have a huge piece in it. Devore: I don’t think that it affects our business as much. What will become necessary is to have CNC, or numeric control, machines for making parts. The busier we get, I outsource that work, making the small stuff. Perches: One of the reasons that we’re going younger and younger to bring stu- dents onto these plant floors is because it’s not what people think of a manufac- turing floor. We all think it’s this dingy, dark place. It’s a great opportunity for not just people to work physically on the floor, but also for engineers and techni- cians and all these different types of skill sets. A lot of these robots that you see, in a way they are replacing some jobs. But they’re replacing jobs that either had high turnover to begin with because it was maybe a very strenuous job or it was very repetitive – or ultimately they’re removing some potential safety issues from that position. Excerpts from Features Editor Christine Temple,  ctemple@sbj.net . Dianna Devore, Design Fabrications Inc.; Holly Gray, Heim Young & Associates Inc.; and Jill Phillips, Jill Phillips Coaching