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January 1, 2015

Hiring Smarter

Recruiting worthy new talent requires an aggressive, multi-pronged program.

Recruiting skilled workers in the metals service industry can be intensely competitive. By most accounts, there is a significant shortage of qualified help for several reasons: an aging workforce of Baby Boomers starting to retire, stagnating compensation, and perhaps a certain lack of perceived cachet about metals and manufacturing-sector jobs as a lifelong occupation.

According to the U.S. Bureau of Labor Statistics, the average hourly wage for production and nonsupervisory employees in the primary metals manufacturing subsector, which generally includes metals service, was $22.18 in October 2014 (the latest available data at press time). That was a relatively flat 9 cents higher than in October 2013, but 6% higher than $20.84 in October 2012.

For all employees in this subsector, including supervisors, says the BLS, hourly October 2014 wages were $25.12, up just 10 cents from a year earlier, but 5% above the $23.88 calculated for October 2012.      

Still, human resources experts say there are plenty of ways to find good people.

“We use a variety of tools,” says Mike de Leon, director of talent management at Ryerson Inc., the sprawling Chicago-based metals distributor and processor. With 90 locations in North America, the company each year hires about 250 employees, at all levels. De Leon oversees a staff of seven to eight recruiters around the country.

Although all openings are posted on the company’s own website, de Leon says a majority of the hires come from trolling LinkedIn, the business-oriented social networking service. The company also uses more focused online jobs services including Indeed and CareerBuilder.

“In Switzerland, 70% of high school graduates go into apprenticeships. In the U.S., 2%.” 

The biggest enticement, he thinks, is the image the company itself has developed. Is it a progressive, collaborative, welcoming place to work, for example, with state-of-the-art technology, opportunity for advancement and competitive pay? “Brand image: It’s huge,” de Leon says. “Ryerson is a 172-year-old company, but we have to [keep continuing] to build the brand.”

Ryerson, de Leon says, also spends a lot of effort looking for candidates at college job fairs and hiring events staged by local governmental agencies. And across the country, the company has cultivated relationships with institutions of higher education. De Leon says Ryerson is working with Texas A&M University in College Station, University of Alabama at Birmingham, University of Nebraska at Kearney and Purdue University in West Lafayette, Indiana.

Ryerson welcomes referrals from current employees. But, unlike many other firms, it does not pay a bonus to workers who refer someone who gets hired and stays for a specified period of time.

However, Ryerson’s willingness to hire promising individuals with little experience and train them makes it stand out from other companies. “We’ll teach them about metals,” de Leon says.

Understandably, many companies say they prefer to hire veteran, experienced workers. But de Leon says that can be a negative. “We’re buying talent that may have been trained in a different way than the way we do it,” he says.

To that end, Ryerson has created Ryerson Academy, an in-house training facility in Minneapolis for new hires, mainly in inside sales. The company provides six months of paid training. De Leon considers it a major recruiting lure.

 

A Winning Image

At Olympic Steel Inc., brand building begins with a dramatic 20-second video clip on the company’s home page that greets any prospective employee visiting the website. Olympic Steel is a publicly traded Bedford Heights, Ohio-based steel processor with 34 locations across North America, upwards of 2,000 employees, and a constant need for new help—several hundred new bodies every year.

“There is no one-size approach,” says Michelle Pearson-Casey, Olympic Steel’s director of human resources. “For us, it depends what job: skilled [shop floor] or administrative. It’s absolutely a challenge to recruit employees.”

Like Ryerson, Olympic Steel networks with local vocational tech programs and colleges, and offers on-the-job training. The company also uses LinkedIn and other online job sites, but Pearson-Casey says the sites can be a “double-edged sword” because information about expansion, staff shortages or strategic plans may be revealed to competitors by advertising for certain positions. She calls the whole process “post and pray.”

Still, as the snazzy Web video suggests, Olympic Steel has plunged into the complex online universe. Recognizing that the younger generation is far more attuned to less-business-oriented social media, in the past year Olympic Steel has been trying to build a presence on Facebook and Twitter. Pearson-Casey says the content is geared toward recruitment and emphasizes employee benefits.

Olympic Steel also relies on referrals from existing employees and pays a bonus of $250 for a lead on a new hire who stays for more than 90 days.

There’s one other recruitment route that likely distinguishes Olympic Steel from many others in the metals service industry. In a four-year-old program, the company’s four Minnesota locations use nearly 200 carefully screened low-level, nonviolent prison inmates in a work-release program as temporary workers. At night they return to a prison facility. Pearson-Casey says between 10 and 20 a year are eventually hired full-time. She says Olympic supervisors “haven’t had any significant issues with the individuals coming to work for us—at least, no issues unique to that group.”

 

Reliability in Referrals

Not every metals service shop casts such a wide net. Take, for example, Service Center Metals, a privately held company with 140 employees located in the Richmond, Virginia, suburb of Prince George. When Service Center Metals needs employees, it simply tells existing workers.

“Word of mouth,” says Ramon Puzon, the company’s human resources manager. “It’s a huge deal.”

Adds plant manager Howard Somers: “No Twitter. No LinkedIn. We like to focus on keeping things simple.”

While Service Center Metals also pays a small referral bonus—$100 to employees for successful hires—Puzon says that’s not the prime motivation for the recommendations. “The crew wants to have colleagues that they can depend on,” he says, so they only vouch for candidates whose work habits they know well.

“People have to understand there is a long-term opportunity with the company.” 

Somers puts it another way: “This [method] is very reliable because their reputation is on the line.”

Because of this emphasis on character and habits, the company is willing to hire people who lack trade skills but have what it considers the right attitude and capacity to learn. If a candidate can pass the “good people test,” Somers says, “you can teach them to do anything.”

Service Center Metals successfully used this recruiting process during what was (for it) a large expansion—the hiring of 20 workers. Says Somers: “I judge a company by the number of people who want in. People want to be part of a winning team.”

That’s not to say that Service Center Metals doesn’t try to build its own brand or totally avoids the Internet. Its website notes prominently that the company pays 100% of employee health care costs. And it’s possible for anyone to file a job application online, although one of the questions pointedly asks for the name of the person referring the applicant to Service Center Metals.

 

Solving the Identity Crisis

Dave Lechleitner, chair of the software council at the Fabricators & Manufacturers Association, says one of the big problems in recruitment and hiring is what he calls an “identity crisis” in metals service and manufacturing. “It’s perceived as a dank, dirty, dangerous environment” without a lot of advancement opportunities, he says.

It’s incumbent on employers to convince recruits this isn’t true, Lechleitner says: “People have to understand there is a long-term opportunity with the company.” Otherwise, “you’re only going to hire a certain kind of employee.”

Accordingly, Lechleitner is a big fan of using social media in recruitment efforts. He sees it as the best way to reach Millennials—individuals born starting in the early 1980s who now are of prime age for many job openings. “This is the generation connected by social networks 24/7,” he says.

 

Reshoring Heightens Need to Recruit

Added pressure to find good hires could come from efforts to return manufacturing jobs that moved abroad (mainly to China) back to the United States. Harry Moser heads the Chicago-based advocacy group Reshoring Initiative, which argues domestic manufacturing is cheaper, tracks the movement of jobs and believes the trend is finally heading in the right direction.

“The underlying issue is recruitment” of people to fill those returning jobs, he says. “The challenge is to get more applicants.” Moser agrees with Lechleitner that an image issue is getting in the way of recruitment. “Manufacturing as a whole is not treated as a profession here,” he says.

Moser is a manufacturing industry retiree himself, having run a Lincolnshire, Illinois-based machine tool manufacturer now owned by Georg Fischer Group. He takes the long view that recruitment has to start with industry outreach to high school students. “You have to convince students that metals service and manufacturing is a great thing,” he says. Moser draws a sharp contrast to some European countries that have effective entry-level programs: “In Switzerland, 70% of high school graduates go into apprenticeships. In the U.S., 2%.”

Outreach, Moser says, could include anything from providing a program at a local school for Manufacturing Day to sponsoring a mechanical or design competition of some kind for students. He suggests that local managers develop an affiliation with the local community college—for example, by joining an advisory board, which might provide first crack at promising talent.

Clearly, there is no single solution for hiring great talent. Your company needs a flexible toolbox, including online and in-person recruiting, social media outreach, and targeted programs that may include educational institutions like high schools and community colleges. You need to pay competitively, and even offer your employees rewards for good hiring recommendations. And hardly least, you need to be changing the perception of what it means to work in metals services.


William P. Barrett is a veteran business journalist. He can be reached at: wmpb@aol.com.