The current state of employment in the manufacturing industry [Podcast]

Rich Safranek is the strategic account manager at Sage X3 and has over 25 years of experience in the enterprise management and wholesale distribution space. His background includes consulting and industry presentations and a 41 city tour with both Microsoft and IBM, speaking with company owners and c-level executives on the benefits of processor invention and the use of technology to enhance and automate many of these processes. I recently had the opportunity to interview Rich for the Sage Advice podcast to discuss employment in the manufacturing industry. You can listen here, or read an edited version of the interview below.

Tell our audience a little bit more about yourself 

I currently reside in the Atlanta area. I’m originally born and raised in Omaha, Nebraska, but decided it was time to get out of the cold. So I’m grateful for the weather in the southern part of the United States. My role within Sage is mostly new sales. I cover a five-state area throughout the southeast. With my position, I do an extensive amount of traveling working with primarily manufacturing companies on automating what systems they have in place today and how they can combine most of that into one system as opposed to a lot of disparate systems that we see out in the market that were popular 8, 10, 12, 15 years ago.

Why do you do what you do Rich?

It’s exciting to me to be involved in a project within a company and see the light bulb in their head go off that says “now I get it.” In other words, what they realize is we’ve been doing work like this and working around current business systems and creating processes because we didn’t have any way to support it, so we use a lot of Excel spreadsheets. We use some manual entry. What I really enjoy is seeing them have that conversation amongst themselves saying, “why do we keep doing it that way?” It could be something as basic as just photocopying and purchase orders so we can file it away and understand that there’s a lot of companies who regard this as a just normal process. It’s exciting to me to see them move to that next level and realize what their potential is within the company and how they can help themselves.

What is the current state of employment in the manufacturing industry? 

A lot of the companies I work with have big banners on their fences around their building, or on the side of the building, or even on their website and advertising that they are looking to hire new manufacturing employees. It could be from general warehouse help, drivers for vehicles, or office staff. It covers all the different functional areas within their company and typically that’s not something that we’ve seen happen in the past, or at least I have been exposed to. Most of my time, even in the last three to five years has been people walk in the door, and “Are you taking applications?” The response has been, “Well, we’ll take your application, but we’ll keep it on file.” Today’s world, today’s market it’s just the opposite. It’s a matter of how many more people can we get in the door because I’m still short. By short, I mean effective labor that’s needed to be to run their operations.

I’m also seeing something happening with more companies that are asking for our software, whether it’s Payroll or People. On the manufacturing side of it, if we can support things like point systems, bonuses, and incentives. In the past, again, it was enough for somebody to walk in and collect a paycheck and they were glad they showed up every day. Now, it’s a matter of what kind of referrals can we get? What kind of incentives can we offer to keep people employed? Then, move them up within the organization as well. I attribute this to one thing and the statistics show that the birth rate in the United States has decreased. The population has increased. Don’t get me wrong, but when it comes to birth versus death, we’re running into a shortage of bodies and that’s the only way I can describe this, especially in the manufacturing sector.

They’re hurting for people who are willing to work and show up on a daily basis. That’s the bottom line. Beyond that, they’re looking for people that are willing to buy into what they do as a company. Their mission, their philosophy, and value and that are willing to stay around. The other side of that is they’re hiring people when they can find them, but keeping them is another problem altogether. Again, if we look at the fast food industry, they typically always had help wanted signs, but not in the summertime when kids were out of school. We don’t see that anymore. We see restaurants, where you go to eat dinner with your family and there are empty tables, but there’s still a wait at the door. It’s not that they don’t have tables available, it’s that they don’t have a staff available to service those tables and so they have to be very picky on the timing of serving you and seating you and your family for dinner. The same thing applies unfortunately on the manufacturing side.

I have plenty of prospects especially in certain regions, Eastern Tennessee is one of the areas, the Carolina’s are another one where they’re hiring somebody in the manufacturing world, but they may lose them in the first 30 days because of all things, Mcdonalds offered a $2,000 hiring bonus and they’re paying 50 cents an hour more. The manufacturing people, the audience we’ve chosen at Sage to do business with is now competing for people in a different process than what they’ve had to in the past. It’s really becoming a shift to the HR side of how do we hire these people, how do we train them to be efficient and then how do we retain them as much as anything else.

One observation that I’ve seen is that manufacturing output is actually way up. “Jobs” were down, but the actual output in the United States has never been higher.

That’s a great observation and I would agree with that. I think what you’re seeing is the effect of automation and efficiencies. We’re doing more with fewer people. I think Sage is a big factor to that. I think the automation of certain processes within a manufacturing company. Whether it is picking orders, whether it is assembling raw materials for production, whether it is taking finished goods and scanning them instead of writing down serial numbers, lot numbers, dates for expiration and such, are now being able to be captured electronically. I can now move many more goods with fewer people, but if that company is going to expand, if they’re planning to open a new facility, if they’re going to open a new line, they’re really limited, not on capacity so much anymore, as labor than anything else.

For the rest of the interview with Rich, check out the Sage Advice podcast.