While label converters and equipment manufacturers are often on the lookout for the latest technological advances, the biggest future impact to their businesses could come in the form of labor. The manufacturing industry continues to grapple with ongoing workforce challenges, which have only been exacerbated by the Covid-19 pandemic.

There are numerous layers to the workforce dilemma, too. Employers must attract employees, retain their talent, and brace for long-tenured employees’ retirement, among other factors.

“It has been a struggle. We’ve spent more time on recruiting and retention in the last two years than we ever have,” comments Kristen Shields, president, Graymills, and co-chair of the TLMI Workforce Development Committee. “Literally every time we think we’re fully staffed and will have time to breathe and plan, someone leaves. It’s extremely frustrating.  Our office and engineering staff have been very stable, but the plant is a whole other story. We are aggressively trying to ‘build our bench.’ We want to bring in entry level people and show them the opportunities for growth.”

“The main struggle for Luminer has been hiring for the production floor,” adds Nick Spina, account manager, Luminer Converting Group. “The number of young people attending trade schools to learn print is drastically down compared to 20 years ago.  Simultaneously, our production workforce is aging, so it has been difficult to keep a deep bench out on the floor.”

While this topic is fraught with challenges, Luminer has found some successful strategies. The company has placed a strong emphasis on training. “One of our successes has been hiring young, ambitious employees and training them from scratch,” says Spina. “Hires have come from employee family members and local referrals. Training, meanwhile, has always been a struggle for us, but it must be a top priority in order to engage and retain. Oftentimes your best press operator is not your best trainer, so it has been important to learn the strengths and weaknesses of all employees and see where and how they can fit in our training program.”   

While attracting employees is often seen as the biggest roadblock for converters and employees alike, retention is just as big an issue. Once hired, how can companies keep that employee within their walls?

“Retention is all about having a great work environment,” states Cindy White, president and CEO, Channeled Resources Group. “We work hard to help our employees not only with a good compensation package but also the opportunity to have fun at work. We have a foosball table, ESPN on all the time in our cafeteria, and a basketball court. We have monthly lunches with fun competitions, like hoola hoops or bags. But most of all, retention comes from making our employees feel valued and listened to.”

Retention is also about providing a path forward for employees. The business must represent an opportunity to grow. “There are different perspectives depending on the department, be it sales, accounting, management, or operators,” notes White. “Salespeople need to see the opportunity to grow. As we invest in more equipment and the packaging industry continues to grow, we have been able to find some great young people. Accounting and management want to see the same thing, a company that is investing in the future and will give them opportunities to grow.

“Operators see things a bit differently,” she adds. “I’ve heard a few who show concern when we keep investing in new equipment, as they wonder what money will be left over for them. For operators, we need to show them we have a profitable plan to grow the business and give them chances for upward mobility if they are interested. But most of all, we need to show operators that we are a flexible, stable, fun place to work.”
Communication, especially between the front office and shop floor, is key. With different goals and objectives, companies are best served to make sure everyone is pulling in a common direction.

“Interestingly, I think our biggest challenge is getting our management team to relate better to the operators,” says White. “Several months ago, we had a few departures and I spent time talking to many of our operators, only to hear they felt that there was a big wall between the office and the plant, with a major power trip going on in the office. As I investigated, I realized that our managers had stopped talking to our employees and instead only told them what to do. They weren’t listening, they were prodding and pushing.”

For Graymills, another challenge involves retirement. As the workforce ages, manufacturers are tasked with assembling new teams – with employees unfamiliar with the processes and procedures customary to the industry. “Graymills has an aging workforce full of tribal knowledge,” says Shields. “Our goal is to transfer the knowledge to our younger employees while challenging them to improve those processes.”
As the saying goes, location, location, location. According to Spina, geography plays a role in this process, as Luminer has found it harder to hire in NJ due to the high cost of living. “We have found more qualified applicants in Pennsylvania, which has caused us to adjust our production mix and move more work to our PA plant,” he remarks.

Graymills has taken numerous initiatives to attract new employees while also incentivizing its current workforce. “New plant hires were coming in at higher pay rates than our long-time employees,” states Shields. “We brought everyone up to the same pay scale, which is now at the high end of comparable wages for our area. We’ve also improved our 401K program.”

Selling the industry

The industry currently faces several hurdles, chiefly selling manufacturing to a generation that has grown up with technology.

“This industry is profitable, forward-thinking, and technology driven,” says Luminer’s Spina. “We are proud to say that we did not miss one day of work during the pandemic. Not only did our industry survive the pandemic, but it grew. The industry is dynamic and recession-resilient. We are also an industry that takes sustainability seriously, as seen through the many initiatives and partnerships between vendors and converters alike. The industry is filled with growth opportunities, from the press floor to front office positions.”

“This is not a dirty, dying industry,” adds Graymills’ Shields. “The industry is extremely stable, high tech and exciting. Once you’re in, you don’t leave – these are the best people.”

This industry also offers prospective applicants a future without an inordinate amount of student loan debt. As the cost of college has soared, manufacturing provides a career without the excess baggage.

“We must do more as an industry to support and promote local trade schools and training programs,” explains Spina. “It is no secret that the rising cost of college tuition is not matching up with the financial rewards post-graduation. This is an opportunity for our industry to promote a growing and stable career that does not require a college education.”

Associations, such as FLAG and TLMI, are working with members to help curb the issues in the workforce, as well. TLMI’s Workforce Development Committee has taken numerous initiatives to help promote the industry. “The TLMI Workforce Development Committee has been busy rolling out some of our key initiatives,” notes Shields. “We recently had college/vocational scholarship applications open. The member employee scholarship application will be opening soon, too. Finally, the Converter Member Training Grant program will kick off the first week of June. There is a lot of money available for people interested in getting into our industry. Plus, hiring kits are a key part of TLMI’s strategy moving forward.”

Case studies

AWT Label & Packaging’s Shawn Oetjen crunched the numbers on the cost of constantly replacing an endless cycle of employees. According to Oetjen, coaching employees is critical, and having a mentor is critical to their success. Employees want to be seen and they want to be heard, he adds.

“Most of us in this industry can identify someone who impacted us in a positive way, and it helps vitalize what the mentors do, as well,” says Oetjen.

In his experience, AWT had a department of 12 people that cycled through 27 employees in one year. A department with 225% annual turnover was confronted with replacement costs of 1.5-3 times annual salary.
“An $18 per hour job translates to $37,440, and a 1.5 times replacement cost is $56,160. A department with 27 employees equates to $1.5 million. There is a greater cost benefit to training and incentivizing current employees than constantly replacing them.

“We identified we had a problem and what we were doing was not working,” says Oetjen.

Luminer Converting Group is also utilizing successful strategies. “A key retention strategy has been to prioritize training,” states Spina. “Some employees are happy learning one skill and sticking to that every day – but we have found this to be the exception, not the rule.  Most hires thrive when their training is made a priority and they continue to level up within the company. Production personnel, especially press operators dealing with fast-paced, quality-driven tasks, need to feel comfortable and have easy access to have their questions answered.

“A second retention strategy comes during the hiring process,” he adds. “When we have found a qualified candidate, we make it a point to share with them the difficulties that can arise in their given position. We all love this industry but know it is not sunshine and daisies every day. Letting a candidate know the challenges they can deal with on a bad day has been a success in making hires that are likely to stay long-term.”

Channeled Resources, which boasts four locations, has the most trouble attracting and retaining employees in Wisconsin. “Wausau is by far the most difficult place for us to both recruit and retain employees,” explains CRG’s White. “It is our largest manufacturing site, with more equipment coming this month. We are always trying to find good people. The unemployment rate is 1.8%, and there are signing bonuses of $3,000 each on the walls of every manufacturing building you drive by.”

According to White, the modern worker wants to be part of a collaborative environment. “Today’s employees do not want to be told what to do without any input,” remarks White. “Many of our operators are millennials with young children. They want and need a work-life balance. Things like mandatory overtime, meetings at the end of a shift that goes beyond their time, etc. can cause all sorts of resentment for people who must get home to take care of their families. Today, Channeled Resources is working hard to make sure our employees from the ground up get a chance to be part of solving problems and making the working environment better.”


TLMI addresses workforce challenges
Through the Workforce Committee and Label Leaders of Tomorrow, TLMI has prioritized the ongoing workforce crisis facing the manufacturing space. The association provides resources like hiring toolkits, scholarship funds and training tips, among others, to help foster employee retention and attract the next generation of employees for converters and suppliers.

The topic took center stage at the recent TLMI Converter Meeting, as various presenters touched upon the state of employment, both in the industry and the country at large. Plus, experts addressed the issue during the converter panel and roundtable.

“We don’t have enough labor in this country,” noted Alan Beaulieu, president and CEO, ITR Economics. “It’s not because people are sitting on the sideline, either. From Covid-19, people have come back to work. In fact, people working in the private sector is at a record high, and the number of people unemployed is the lowest we’ve seen in years. The work-to-population ratio is normal and better than it has been in the past, too. Looking at full employment, there are more jobs than we can possibly fill.”

The lack of available labor will translate into much higher wages in the future, Beaulieu added. Companies will battle how to get by with very little to no labor in the future. While automation, robotics, and AI will help, there is still a human component to many jobs.

Where you live impacts labor availability, too. According to ITR Economics, places like California and Illinois are seeing declining labor availability, while Idaho is soaring.

Claudia St. John, president, Affinity HR, noted 26 states have reached record low unemployment rates this year. However, eight million jobs have gone missing due to the pandemic, either from retirement, death, long covid, mothers choosing not to return to work, among other factors.

“Labor is the most critical issue for your businesses going forward,” said St. John. “Labor is a diminishing resource. For a fairly labor-intensive industry, this is a problem we need to start paying attention to.”
Seeing as how this is what St. John calls a “systemic” issue, not just for 2023-24 but for the future, “people need to be your primary focus.”

Another issue will be the cost of labor. On a normal year, wages increase by about 2.3%. That number is 4.2% and it’s expected to rise to 4.6%. However, compensation is not the only – or even most significant – consideration for prospective workers. Work flexibility (the ability to work from home or flexible hours), relationships, well-being, opportunity for advancement, and adequate pay and benefits are among the concerns for the modern employee. According to St. John, label converters and suppliers should invest in management training. Proper communication is critical, and management can learn skills, such as how to relate to people, navigating conflict and setting expectations, to foster a better work environment.

During TLMI’s converter panel, John Wynne, Fortis Group CEO, Tara Halpin, owner and CEO, Steinhauser, and Charlie MacLean, president, ASL Print FX, discussed their successes and pain points. Illustrating a bright future at the company was a common thread throughout the businesses.

“What we’ve been most focused on is showing a career trajectory,” explained Wynne. “We want to make sure our new hires are not on an island by themselves, and they have support as they enter the team. We’re proactively engaging our employees on whatever they’re thinking about. We want to make sure they see a home at Fortis. We’ve been more mindful of how to attract and retain employees, as well.”

“We try to strategically increase our headcount,” added MacLean. “Once somebody comes through your doors, what are you doing to keep them there? Showcase your culture and make sure their voice is being heard.”

Halpin has seen great success at Steinhauser, as the Kentucky-based converter boasts a retention rate of 96%. Steinhauser also saw its best year to date in 2022, and that momentum has carried into Q1 of 2023. Company culture has been imperative in generating new leads.

“Our biggest source of finding people is having a referral program,” stated Halpin. “Having people talk about how wonderful Steinhauser is around the dining room table is amazing for us. We also do tours of our plant for young people or those who need a second chance. We want to showcase how great printing is and that it can be a great career.”