The Hiring Squad

May 19, 2015  by in Business Strategy, Industry   

By Sheila Long O’Mara

By most accounts, the economy is churning. Consumer confidence is rebounding. Retail sales are steadily climbing, unemployment is down, and so far this spring, housing is looking brighter.

The number of people applying for U.S. unemployment benefits remains at a 15-year low with the most recent figures coming in at the lowest level since May 2000.

Furniture sales are on the upswing.

What could go wrong?

All of the typical indicators are bending in our favor except for that pesky unemployment thing. Overall, a national unemployment rate hovering around 5.5 percent is an impressive figure and one to be celebrated. Many of the brightest economists consider that level as full employment.

In the furniture business, however, that low unemployment rate is causing a bit of a pickle. The competition for good quality employees is fierce. The industry has found itself smack dab in the midst of a labor crunch.

Furniture industry employers are working hard to encourage and show viable candidates that the industry offers great career options and a bright future all while looking to overcome the perception that it’s a dead-end business.

On the manufacturing side of the business, domestic factories are struggling to find skilled labor to build upholstery frames in plants that are now humming with orders after a few slow years beat down by the recession.

“We’re having a hard time hiring people in the biggest sort of way,” said John Bray, CEO of Vanguard Furniture.

That said, the manufacturing sector isn’t alone. Some retailers are struggling to fill slots within their operations, too, and some find themselves fighting the perception among workers that retail is a fill-in-the-gap job until a better job comes along.

The tight labor market has jumpstarted the simple supply-and-demand principle forcing employers to bump up their hourly rates. The push on compensation is exacerbated by the ongoing minimum wage debate going on nationally and within each state.

The minimum wage conversation has prompted many powerhouse retailers to increase their wages. Earlier this year, Walmart, Target, T.J. Maxx all announced they would bump their baseline wages to $9 an hour. The current national minimum wage is $7.25 an hour. Many states have minimum wage laws that vary from the national provision. In cases where an employee is subject to both the federal and state laws, the employee is entitled to the higher of the two minimum wages.

When the super retailers increase their pay scale, it impacts compensation in other parts of the labor market, including the furniture business.

Dallas-based American Leather employs 496 people in its factory and is feeling the pinch to attract the best employees possible to fit into its culture and workflow. Bruce Birnbach, president and CEO, said he competes for workers with every other company in his market looking to hire someone.

“We just changed our wage structure about eight months ago to be able to attract the right employees,” he said. “We had to do it. People are adjusting salaries to draw in the right caliber person. We’re talking 10 to 20 to 30 percent increase in salaries to compete.”

It gets complicated, but the demand for workers doesn’t change and the need to entice them into the furniture landscape is very real.

 

Attacking the Problem

In Western North Carolina, five furniture manufacturers went to their local community college, Catawba Valley Community College for help (See accompanying story) and found it.

“We knew we were going to have a problem in 2008, 2009 when the economy dipped and our sales dipped,” said Bray, whose Vanguard was one of the five suppliers working with CVCC. “We all had to reorganize our factories and most had to adjust employment levels. When the business came back, we knew were going to be in trouble.”

Now, manufacturers in the region are taking a multi-prong approach to find, train and put the skilled employees to work.

To hear executives tell the tale, the industry found itself in the midst of the perfect storm. The recession took many employees out of the business, others aged out and retired, and the kicker, too few young people have been willing to come into the manufacturing sector of the industry in the last 25 years.

Manufacturing roots run deep in communities that were birthed around factories. Those furniture factories that employed multiple generations back in the heyday were hit hard when many suppliers opted to move production off shore. That strategy resulted in plant closures, incredible job losses and sent an industry into the anti-dumping battle that has left many still bitter today.

In addition to that bitterness, it left the manufacturing community reeling with a major public relations problem among potential employees. Think about it. If a high school graduate witnessed his or her parents, and in some cases, grandparents, lose furniture factory jobs to off shoring, what would entice them to jump into that line of work?

Couple their hesitancy with parents yelling “Stay out of the furniture industry. It’s dying.” Young adults are not inclined to choose furniture as a vocation.

Most furniture manufacturing companies in the Hickory area have returned to or have exceeded pre-recession production levels and have surpassed their personnel needs.

The group in North Carolina is coupling the furniture program at CVCC with another plan to capture young people, show them the way to successful careers in the furniture and to combat the public relations image plaguing the industry.

Working with area high schools and the local chamber of commerce, furniture suppliers will be setting up apprenticeships and internships with older students in the next six months or so.

“I think we will have solved our problem when we can hire high students as interns and show them that by the time they graduate from high school, they can be making more than $30,000 a year with a vision of moving to between $40,000 and $50,000,” Bray said.

Through the program, the candidates will be thoroughly trained, which isn’t cheap. Training costs per person sits around $20,000 a year.

“But, the alternative is to do nothing, and then we’ll see our pool of potential employees go down,” Bray said. “We do see a light at the end of the tunnel.”

In the meantime to fill the gap and keep up with demand, employers find themselves pushing employees to do more and put in overtime, which can be frustrating for overtaxed workers.

In Galax, Va., Vaughan-Bassett Furniture remains one of the largest local employers. Doug Bassett, president, said the company is also working with local community colleges to uncover young people who would be attracted to building bedroom.

Bassett said educating people that the furniture work they remember from their parents or other family members has change significantly.

“It’s not all sawdust and grit,” he said. “We’re looking to marry up with people who have the new technical skills we need. The job today requires working with computer programs. It’s evolved into a less labored job and more skilled work.”

Machinery within furniture factories are reinvented and change frequently these days, Bassett said, requiring employees be tech savvy with strong math skills to keep up with the changes.

Other groups are also pooling their resources to find solutions to the labor crunch. The Solution Partners of the American Home Furnishings Alliance was just awarded a grant from the Furniture Foundation to help develop solutions.

The 10-person task force was set to hold its first meeting at press time, but Mary O’Keeffe, executive director for Solution Partners, said the industry is indeed in the midst of a labor crisis and needs to develop some long-term strategies.

“There’s a call to action that manufacturers have all these jobs to fill, and there are no workers to fill them with,” she said. “Everyone needs skilled workers and they can’t find them.”

 

Constant Recruitment

City Furniture in Tamarac, Fla., is always in recruitment mode, and the lower unemployment rate has forced the retailer to move into a more passive recruitment mode as opposed to an active strategy. The strategy has the company actively pursuing potential candidates who are currently employed and aren’t active in a job search. The active recruiting deals with people who are searching.

Janet Wincko, vice president of human resources for the retailer, said active mode doesn’t always result in high quality or high quantity.

Recently, the retailer has been working with recruiters who conduct searches through a variety of social media sites including LinkedIn. The entire 1,300 City Furniture is involved in recruiting, and the company makes it worth their effort through its referral program that offers prizes for new hires that stay on the job a certain length of time.

“We’re always looking for ways to enhance our efforts there,” Wincko said, adding that about 30 percent of new hires come in through an associate’s referral.

At Waukesha, Wis.-based Steinhafels Furniture, current employees are also encouraged to be in recruitment mode. Lynda Malmberg, senior human resources manager for the 20-location company, said employee recruitment is a constant with the company staying in recruitment mode.

“Our employee referrals are key,” she said. “We’ve been the top work place in Wisconsin for four years running, and we’re hoping to make it a fifth. That definitely helps in enticing people to come work with us.”

Malmberg said getting people to change their mindset about furniture retailing is imperative in finding the best recruits.

“No one thinks of retail as a career,” she said. “We have professional sales associates on our floors that make very good money.

Steinhafels has a strong commission rate, and the company works to accommodate employees’ schedules, Malmberg said.

“You can make a lot of money here,” she said, adding that nights and weekends can be a drawback for some people. “We give our sales associates Fun Time to make their lives more flexible. If they want a Saturday or a Sunday off to spend with family, we make it possible.

“We give them the opportunity to make really good money all while meeting their family obligations,” Malmberg said.

The lower unemployment rate in Florida pushed City Furniture to make some adjustments to its wages. “Compensation is something that we’re always careful about,” Wincko said. “On the operations side of our business we had to make some changes due to the low unemployment and to increase retention. We constantly have to stay a tune to what’s going on.”

 

Front and Center

A great recruiting tool for City Furniture is its career site where job seekers can truly explore the company, its culture and get a feel for what it might be like to work for the furniture retailer.

“It’s an amazing tool,” Wincko said. “It presents us well through words, images and video. There’s a whole section on recruiting and everyone the website is a City Furniture employee.”

Wincko said the site gets a lot of buzz from the community,  potential hires and employees.

An all-important aspect of finding the right person for an open position is the interview process. That process can be a challenge that requires research and a knowledge of what can be asked and what should never be asked of job candidates.

 

Here’s a look at questions and topics to avoid, and pointers on issues to bring up from a number of human resources personnel.

1. Do not ask about sensitive or illegal topics

Religion, politics, sexual orientation, marital status, nationality and race are all out of bounds during interviews. It is illegal to ask those questions. Doing so violates the Civil Rights Act of 1964.

2. Avoid bad mouthing former employees

If you’re looking to replace an employee who was a bad hire and was fired, do not share the information with the job candidate sitting in front of you. The topic may come up during the interview if a candidate asks, but be diplomatic in your response. Trash talking is never appropriate and could frighten off a potential hire.

3. Don’t waste time on small talk

Create an interview script with an outline of prepared questions and stick to it to ensure you get the critical information needed about the possible hire.

4. Most wasted question: What are your weaknesses?

A better option is to ask a candidate to provide an example of a work situation they wished they would have handled differently. That opens the door into critical thinking skills.

5. Determine whether the interviewee will mesh with your company’s culture

While competency is key, you still need employees that work well with others on the team. If they’ll detract from the corporate culture, it’s likely best to give them a pass. A good strategy is to have as many people at your company as possible interact with the candidate. Gather their feedback.

6. Investigate whether the candidate is competent

This sounds like a no-brainer, but ensuring he or she is capable of the task at hand is key to making a smart hire.

7. Talk about your company

It’s important to be able to sell your business to the candidate. While you’re hoping to be sold on their qualifications, they need to be sold on your organization. Be sure to point out aspects of your company that make employees want to work there.

8. Drill down and determine if the applicant wants the job

In today’s employment environment, candidates have a variety of options available. It’s important to gauge their interest toward the end of the interview. Ask if they’re interviewing for other positions. Ask how interested they are in a position with you. If they have reservations, you can address them before they leave.

 

In today’s tight labor market, it’s imperative that companies hold onto the talent they currently have on their teams. Here’s a look at a few strategies to help maintain morale among employees and perhaps just keep them from job searching elsewhere.

 

1. Show Appreciation

Let employees know when they’ve done a good job.

2. Be Clear

Written polices and job descriptions help keep everyone on the same page

3. Be Consistent

The only thing worse than no rules is not holding everyone accountable to them.

4. Celebrate Wins

When the company or individual employees do well, celebrate the victories as a team.

5. Share Your Vision

Make sure employees understand your company’s business model and goals. Keep everyone on the same page.

6. Squash Issues

Don’t let employees’ problems, interpersonal or performance based, fester until there’s a blow up.

Prompted by a need to qualified employees, several companies from the furniture manufacturing community in North Carolina have come together to help design a furniture program at the local community college.

Catawba Valley Community College in Hickory, N.C., kicked off its Furniture Fundamentals program in January 2014 to offer interested people an overview of the furniture manufacturing process. The program is also designed to provide career specifics on a number of different furniture specialties.

The program meets the need for people in the area looking for careers, while also filling the desperate need for furniture manufacturers on the hunt for employees.

Offered through the college’s Workforce Development Innovation Center, the coursework includes plant tours, career previews and assessments to help students determine career options in the industry.

Participants earn continuing education hours and receive a certificate upon completion of the program.

The program was customized to meet the needs of the local furniture industry that like other employers are struggling to attract quality employees. Companies that partnered in developing the program include Century Furniture, Lee Inds., Lexington Home Brands, Sherrill Furniture and Vanguard Furniture.

John Bray, CEO of Vanguard Furniture, calls the furniture academy an “impressive program” that incorporates problem solving, team building skills and a variety of other workplace skills needed in the manufacturing sector.

Classes include furniture fundamentals, pattern making, manual cutting, automated cutting, sewing, introduction to upholstery, inside upholstery and outside upholstery. Students within the program are taught through hands-on training and learn from furniture craftsmen from local companies.

Human resources executives and employment professionals in the area worked with CVCC to develop the curriculum.

Bray said students who succeed in the initial part of the program and make it through the coursework are guaranteed a job.

 “This is a long-term solution for our industry, and it will be successful,” Bray said.

 

After more than 2,000 Starbucks workers headed to college through the coffeehouse’s original two-year tuition reimbursement program with Arizona State University, the company shifted gears and expanding the program to cover four years of tuition for eligible employees.

Starbucks expanded its College Achievement Plan with ASU last month making more than 140,000 full- and part-time employees eligible for the program.

The tuition program, rolled out last summer, is a collaboration between Starbucks and the university allowing employees to get either full tuition reimbursement or partial scholarships to complete one of 49 online bachelor’s degree programs through ASU.

Originally, students starting out as freshmen and sophomores in Starbucks’ program were given a partial scholarship and need-based financial aid, while juniors and seniors received full tuition reimbursement for any out-of-pocket tuition costs. Upon graduation, employees are not required to stay with the company.

Under the expanded plan, all eligible Starbucks employees can apply to have all four years of their tuition covered by the company and ASU.

Starbucks estimates that over the next 10 years its investment in the plan could exceed $250 million.

Another change under the expanded plan is the way in which employees are reimbursed for their tuition costs. Previously, Starbucks only reimbursed students after they completed 21 credit hours toward a degree. Now, the company repays students at the end of each semester.

Another new component of the collaboration between ASU and Starbucks is an online Retail Management degree.

“We have partners who want to stay with Starbucks and grow their careers in retail after they complete their education,” said Dayna Eberhardt, vice president of global learning for Starbucks. “This customized degree is meant to help teach them the kinds of skills they need to be successful in doing that.”

Eberhardt and her team defined five categories of learning that are important to Starbucks: people and team leadership; critical thinking and problem solving; business management; customer service; and sustainability. Drawing on classes ASU currently offers related to those key subject areas, Starbucks and the university’s W. P. Carey School of Business created the retail degree.

Case studies from Starbucks business situations will be used in the classes, which are open to all ASU students. The next phase of the retail degree might include further customizing classes. For example, future course studies could include examining the challenges of balancing a premium brand with affordability or supply chain issues specific to Starbucks. Another possibility is inviting Starbucks leaders to be guest lecturers.

“It would be beneficial to get as close as possible to teaching our partners (employees) the specific skills they’d need to be successful at Starbucks,” Eberhardt said. “There are many exciting possibilities that would help our partners learn and apply valuable skills that are relevant to Starbucks.”

 

The NRF Foundation, the research and education arm of the National Retail Federation, joined hands with the U.S. Department of Labor Employment and Training Administration nearly eight years ago to create a Retail Competency Model to help all retailers identify and build talent.

The framework supports a variety of recruitment, training and career advancement solutions built on skills retail workers need to be successful. The ETA worked with business leaders to create comprehensive and readily accessible documentation of the skills required in a number of high-demand industries. The NRF Foundation and ETA collaborated to develop and validate competencies necessary to pursue retail careers.

“We are committed to expanding competency-based training and certification in the retail industry,” said Tracy Mullin, NRF president and CEO. “These competencies set a standard for career advancement and identify opportunities to take advantage of the range of career opportunities that retail companies provide.”

The program has continued to grow since its founding, and the NRF Foundation houses online a variety of information for job seekers including a variety of training programs and locations for testing centers for certifications in customer service and sales; retail management and other information.

For retailers seeking training for employees, the NRF Foundation offers a number of training courses for purchase, including courses on retail operations, customer service and sales skills and more.