Episode Overview
“Finding talent is very hard. It’s an interesting market, and you have to find creative ways to find talent. We’ve seen customers offering signing bonuses, referral bonuses, partnering with recruitment firms, even advertising on TV and billboards.”
Despite many manufacturing jobs being available, manufacturers are having difficulty filling openings. David Klotz is President of Precision Metalforming Association (PMA) with over 850 members. In this episode of Zen and the Art of Manufacturing Podcast, Bryan Sapot and David sit down to talk about creative initiatives to hire new talent, how to retain skilled employees, valuable partnerships, and ways to combat product shortages.
Key Takeaways
Originally broadcast on June 15, 2021
Joining the PMA
Klotz’s involvement with PMA started locally in Michigan, where he chaired the district, served as treasurer, and led the golf committee. As he networked with members through Plex’s sales, he took on national roles with PMA’s boards and committees. With a leadership transition at PMA, Klotz was approached about leading the association given his deep industry ties. “My father owned a metal stamping company in Indiana so I grew up in this environment…When I got older worked in the tool die shop area and and then out in the press room. I was cleaning dies to help out wherever I could over the summers.” He accepted and has been President of PMA since 2019.
Even though many members were able to remain open as essential businesses during the pandemic, the tight labor market has made hiring very hard. Factors like enhanced unemployment benefits allowing people to stay home, lack of childcare options due to COVID, and suspected fraud in the unemployment system have all contributed to the labor shortage.
Klotz says PMA members are getting creative to find workers. Common tactics include using recruiting firms and signing bonuses. “Now they’re offering signing bonuses at a manufacturing space and and I’m not talking like a hundred to two hundred dollars or five hundred dollars I’m talking thousands of dollars.” Other company are offering generous referral bonuses for current employees of $1,000-1,500 if the referred worker stays for a year.
Creative Incentives for New Hires
While these incentives are helping attract some new hires, Klotz acknowledges it’s still an immense struggle overall for manufacturers to find the talent they need. He has been visiting PMA member companies regularly and seen firsthand how hard they are working to recruit workers through various means.
One member company in Ohio with 100-200 employees has resorted to advertising on billboards along a major highway, sponsoring signage at local little league games and racetracks, and even running a TV commercial segment to promote that they are hiring. “In Detroit you have your Ford, GM and Chrysler and you know you had people that you went to go work there. But then there’s enough jobs out there for like these small manufacturers to compete now they’re all competing for the same people.”
Klotz notes these types of broad advertising efforts for hiring are highly unusual for smaller manufacturers, underscoring how desperate the need for workers has become. With large employers like the major automakers also heavily recruiting, small and medium manufacturers are struggling to compete for the limited talent pool.
When companies can’t find enough staff, Klotz says their options are limited – either rely on temporary staffing agencies as a short-term band-aid, or make the difficult decision to turn down new orders and business opportunities due to lack of workforce. “I had one member in South Carolina that turned away almost $5 million worth of business because they had nowhere to run it. Which is a shame. You would have loved to take a business but you can only do so much overtime.”
The Role of Automation to Compensate for Worker Shortages
One member company in Chicago already had robots on five production lines and was planning to add robots to five more lines within six months. As the cost of robotics declines and reliability improves, Klotz says automating certain processes like part handling and moving parts between work stations has become more viable for smaller manufacturers.
However, while automation helps offset some staffing needs, Klotz acknowledges there are still many tasks requiring human workers that cannot be easily automated, especially material handling and part loading/unloading. “The price of robots is going down so with material handling it moving parts around. Maybe now they’re adding a robot to move that part over to that cell”
Given the intense labor shortage, Klotz stresses that retaining existing experienced workers is critical for PMA members. Many have strong cultures with employees tenure spanning decades. “Many of our members have a family business so there’s a very strong culture. They have a lot of employees that have been there 20-30-40 years. It’s amazing when I tour the factory floor and see the passion these key employees have.” Efforts to keep these key personnel through good compensation, benefits, and workplace environment are essential when new hiring is difficult.
Automating certain processes provides some relief, but does not fully solve the workforce crisis. A combination of investing in automation where feasible, while also focusing on retaining longtime employees, is a core strategy Klotz sees among PMA companies dealing with the labor crunch.
Transitioning New Hires to Long Time Employees
Once new hires pass an initial 90-day period, they tend to stay for decades due to the engaging work environment. Manufacturing can provide great career opportunities, even for those without a four-year college degree. Many PMA companies will pay for employees to get additional education and training while working. Klotz cites an example of the current CEO at one major PMA member who started decades ago as a toolmaker and worked his way up through the ranks. As baby boomers and older owners look to retire, there are increasing opportunities for younger manufacturing employees to take over ownership if a succession plan is not in place.
Klotz sees a resurgence of vocational training programs, apprenticeships, and even partnerships with corrections facilities to create manufacturing career pathways. “If you come on board they’ll pay for your schooling you know you’re you’re two you’re in four-year degree obviously now there’s some commitment after that that they have to stay with the company for a certain amount of time but they will pay for education.” Robotics competitions in schools are also stoking interest in engineering and manufacturing among students.
Overall, he paints a picture of an industry that offers robust career growth potential and is actively working to train the next generation of workers through creative partnerships, paid education opportunities, and nurturing passionate cultures that retain employees long-term.
Connect with David Klotz on LinkedIn.
