Our rural location is one challenge. There are a number of employers competing for skilled laborers in our area. While we pay a premium, it can still be a determining factor.

We work with local high schools to present skilled labor as a viable and lucrative career option for those not pursuing a college degree. We also work with post-secondary schools to bring students in for tours.

Very few people believe in hard work, and in many cases, we are not forcing our kids to have a job. Recruitment gets back to the basics, not everyone is qualified for college. Training in the trades needs to be rediscovered. Secure a job and create your own work ethics to succeed and move up the pay scale. In Missouri, we are developing a logging school to get high school graduates interested in the trade.

Entry level labor is the soft jobs that we compete with. We pay the same, but our labor makes bonus and everyone puts in additional overtime. We are in a rural area so good mid-management is hard to find, so there is opportunity for growth and growing within our work force. We are fortunate to have some very good talent that grew up within our ranks and want to live in the area.

Finding labor will require immigration to continue in a controlled manner, unless entitlements change. Putting in robotics will help if perfected, but putting people to work is the real key. My Dad always said, “An idle mind is the devils workshop.”

Our company [Herwood, Inc.] offers good benefits to our employees i.e. heath insurance, pension, and competitive pay. These benefits help retain good employees, and attract those with family obligations.

There is a lack of applications due to the high employment rate in our region. I think industry should consider building a pallet shop school, where we could train and certify employees for the industry. It may generate interest in younger individuals, and provide laborers for companies looking to fill jobs.

Fair compensation is another issue. We tend to look only at volatile wood pallet prices as a factor of estimating and not at the cost of employees themselves. As an industry, we should widen our scope to look at employee compensation and adjust accordingly so it can be a true living wage. However, money is not the only contributing factor when considering job satisfaction. Health care benefits rank at the top of the list; something that is becoming increasingly difficult to provide. Creating a community in the workplace where employees feel valued and integral to the business’s success strengthens the foundation of any business.

I believe that 5 or 10 years down the road, as the pallet making process becomes more automated, the job will become less laborious, less taxing and therefore more desirable, making it easier to recruit new employees. 

To combat these challenges, we looked at ways to enhance our recruiting process. The first thing we examined was our pay structure. It’s essential to ensure that our wages reflect the increases in the cost of living to maintain our current employees, and to attract new ones. We also have started working with local organizations that help find employment for new immigrants. Often language barriers exist when hiring an employee that is new to the country, so we bring in translators throughout the training process to ensure the employee is familiar with the job, and with safety. The most successful recruiting tool we have is our employees. They can be the best people to promote the company to their friends and family.

The next step to combat the shortage of labor is to invest further in automation. Automation reduces our reliance on manual labor while increasing production.   

Primarily, a combination of wage rates and location, as our locale is at nearly full employment, with a broad base of opportunities in production, agriculture and service industry positions, are all factors. This generates upward pressure on starting wage rates, and makes retention of trained employees challenging as well.

Wages and the physical demands for many production roles make it challenging to recruit. There is competitive pressure for all roles, mainly from traditional manufacturing facilities, warehousing/logistics opportunities, and agricultural positions.

Automation, mechanical solutions, and process modifications to mitigate the physical demands will help. Implementing automation solutions for the future will also drive skill development and opportunity for advancement, resulting in a higher functioning work force in the next 5 to 10 years.

Our organization will actively be moving toward a European style repair system with robots and additional labor eliminating processes. Custom size pallets may be increasing difficult to provide to customers.

There is a growing trend of young candidates being inexperienced with physical labor and having a disdain for it. This trend has been amplified by the tighter immigrant restrictions. The key is finding candidates who thrive in our environment - open up the immigration lanes. 

The increase in minimum wage in Ontario has added challenges to recruiting. There are more positions in the market now with similar pay. General labor manufacturing roles with non-skilled help are our biggest competition for labor. Automation will help over the coming years.

We focus on locating high character people first, and then dedicate the training resources. Due to low unemployment rates, the pool of available quality candidates has dropped. Once we fill a position, it’s unlikely they've ever worked in a manufacturing setting, therefore training and patience is crucial. If someone shows up for work every day and has a good attitude, we’ll move their wages up within a few weeks, and continue to motivate and train them.

Our primary competition is for entry-level talent. Our region is full of small to mid-sized manufacturers also struggling to find talent. The pressure is on all of us. However, since most of the entry level positions require minimal education, we can offer competitive wages without educational strings attached as an advantage. Also, engage with the local high schools to find individuals that are not planning to attend college or a tech school.

There aren’t enough employees to go around! In our area, the unemployment rate is 2.4%, which anytime this drops below 3%, the few applications we do receive are mostly unemployable. Our area also completes with agriculture (farming) plus other manufacturing facilities looking for labor. In the next 5-10 years, we’ll have to turn to legal migrant workers with the support of additional automation. 

Training is vital, and we must do a better job of helping people succeed. My wife taught for 20 years and I remember her saying that if a kid leaves us and can’t read, then we failed him. For years, our industry has just thrown people at jobs and expected them to figure it out or we’ll get another employee. Well, the next one won’t figure it out either, so why not spend more resources and set this one employee up for success.

In our area (South Eastern, Alabama), the food industry is our biggest competition. The area is heavy in poultry and peanuts, and all the big national brands have processing facilities within driving distance, so our middle management, and even the best of the forklift and maintenance, work there because they offer better wages. There is no magic answer and each region is different. In talking with people across the nation who are having success in finding workers, one solution is locating laborers who themselves are bouncing back in life. But to do that successfully, you can’t treat people as numbers, they are people who will need a little extra assistance. They will show up, sometimes because they don’t have a choice, but most often because it is their only choice. 

Our main challenge is attracting candidates who have good work ethics. The work is highly physical, and in all weather conditions. For example, a good forklift driver could easily find work in a warehouse for the same pay and in a better environment. New and established warehouses, as well as manufacturers in Lehigh Valley, compete with us for labor, be it entry level or mid-management.

Consider solutions to strengthen and promote a culture of engagement, safety and accountability, all which can contribute to attracting, and retaining, qualified and loyal employees. Some ways to achieve said goals are:

-       Empowering our managers to seek and offer solutions from within; accountability for themselves and for their teams.

-       Having structured processes and training for employees, managers, supervisors and team leads.

-       Continually check the pulse of the workforce from job posting to hire, through orientation, training and starting their job, providing them feedback through regular performance reviews, and showing them a career path if that interests them.

 Increased economy, increased discretional spending, immigration and undocumented worker controls, increased pay and benefit offerings from retail and restaurant employers are all contributing factors to labor. There is competition in the general labor force with competitive wages, but there’s not enough publicity about the opportunities in the lumber-related industry.

 Recruitment and publicity will help at the elementary, high school and technical school level; college recruitment for management and sales positions. Employers should consider increased wages and benefits to compete with businesses and industry in the surrounding area, and upgrade technology of the machinery and equipment as to provide for a more skilled and higher paid workforce.

The next generation comes with more “digital” skills than “hard work” values. We need to prepare for these new workers. For example, if a teenager today can use a computer better than anyone from the 70’s, why couldn’t they program a collaborative Robot to load boards into a nailer in a few years’ time? Schools in many parts of the worlds are already teaching robotics, programming, coding and mechatronics. In a few years’ time, we'll perceive the hand-nailing or hand-feeding as we perceive the (fax) facsimile… (and faster than we think).

Automation in the European pallet industry has grown rapidly over the past 10 years, and possibly for different reasons: a higher quality product from newer and more advanced sawmills (automation processes), higher wages on labor (social care and taxes), higher and unpredictable costs and availability of the raw material, heavier and tougher restrictions on health and safety regulations. The need to reduce costs forced companies to look at other areas instead of just finding cheaper labor.

The U.S. market may not be that far away from Europe in the diagnosis but it may be in the pain. The lack of consistency in labor will provoke an inconsistency in daily volumes, and force companies to look elsewhere. Automation may be a solution but it will require some time to accommodate the mentality and the reality of the pallet-lumber business in the United States. Although the pallet lumber quality has not gone as far as it did in Europe (yet), the current technologies that allow lumber to be graded while going through the manufacturing lines comes at a cost. The cost for scanning technology is still too high for many small-medium size volume companies.

Things began to change when I started to recognize the value of the human capital surrounding me and realized that filling jobs wasn’t all about me needing workers to produce “my” widget. I recognized the opportunity to positively influence people that needed help in their lives. It is easy to think that entry level workers are the most challenging, but the fact is that every human being that walks through my front door has a ton of baggage, and junk in the trunk. If I expect them to deal with their problems outside of work, and yet show up with a smile on their face every day, then I am the fool.

The fact is that turnover is our enemy, not the available workforce alone. Pallet company business owners have gotten used to needing hundreds of applicants yearly when they only have a handful of jobs to fill. My plant manager Jay Doyle reminded me not worry about having a long line at the door. He encouraged me and said, “We just need 10 people today boss, not 100, if we can keep them from leaving.”

The magnitude of that statement is huge because it creates freedom from worrying about what is happening in the job market with so many other opportunities. It challenges us to be smart in a different way. Looking at what I’m doing internally to keep employees is a far better use of my time than trying to figure out where to advertise jobs to reach more people. 

It’s foolish to keep doing what I did 20 years ago and expect it to work. Demographics have changed for sure. But I don’t control those things, I only control how I respond to change. Expecting it to be enough to just give an employee a fair market wage, an average benefit package, and a dirty hard job, is foolish. We need to ask ourselves how to become the destination for people looking for work, and it’s going to look different for each of us based on our surroundings. 

Millennials are causal. In other words, missional. They want their life to count. They join in worthy causes. They don’t give to church, but they will contribute to a friend in need or a GoFundMe cause. We can work with that at L&R Pallet because we have started to hire people based upon being a cultural fit first, skills/ability second.

It has been my experience that all people need purpose. Applicants don’t come to us with a burning passion to make pallets, but they do come with a longing to be a part of something greater. So “what” do I do to staff my workforce? My job (my mission) is to lead and take care of the people standing in front of me. Their job (their mission) is their work station. Our job is building, serving and impacting everyone and everything through what we do. The vessel just happens to be a pallet, but it is not “why” we get up every day. I get up to make a difference to a captive audience that reports to work for 40 hours each week. It’s an opportunity and a responsibility. By doing that, serving the customer has become easy. 

The answer is actually simple; start loving people. I guarantee it’s the secret sauce in defining your company culture and figuring out where you will be in 5 to 10 years.

Finding the right person takes time. In our area, we have a good public job agency, and the state of Ohio also offers training reimbursement. Entry-level is the toughest. We can’t “afford” or need college graduates for all job openings. At the same time, we need experience.

Our community recognizes the upcoming labor problem and has begun to address it with various solutions. One solution is to engage educators and employers in the conversation. Our public school system is creating Career Academies where grade schools and high schools introduce students to career paths. Some involve advanced education, some do not. This is in its early stages, but it’s a start!

In the next 5-10 years we expect our industry to consolidate and to open room for growth by hiring people with experience in our industry. We also expect automation to continue causing the need for physical labor to decrease. Overall, physical labor will continue to be hard to find and skilled labor for automation will be required.

Regarding pay and benefits, we’re working on increasing wages and offering more benefits to employees. As we grow, we want our employees to grow with us.

In our small town, we have several big businesses, Nestle, Target, 3M (5+ plants), etc, therefore we compete against some top tier employers for our labor. Right now, the biggest competition is for labor.

We’ll continue to automate and train our key employees to use the new equipment. This will allow us to keep our most valuable staff while producing more pallets and cut-stock on a daily basis.