Experienced vs. cheap workers
By Keith Jennings
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I recently attended a monthly roundtable with a local business group I’ve been involved with since last September. The purpose is to gather a diverse group of business people to exchange ideas, discuss workplace issues, offer recommendations and generally support the endeavors of each participant.
At our last meeting, one member noted that, in light of the volatile economy and the need to operate as inexpensively as possible, his company and many others have resorted to hiring less-experienced and lower-cost employees, trimming the more-experienced employees with higher salaries. While this technique is understandable, I’ve been taking the opposite approach at my shop—not consciously, which makes this realization interesting—but because of a critical need for skill and experience.
While I was sitting there pondering the discussion, it all clicked. I was “zagging” when most were “zigging.” My initial concern was that I wasn’t following the logical pattern of these successful business people and could be jeopardizing my shop’s survivability. When the group asked for my input, I informed them that I was taking a different approach—seeking experienced machinists, operators and others worthy of a higher salary. Whoa! Does this make sense in a tough economy?
In the past, our shop had hired some younger, inexperienced candidates who excelled and provided a great bang for the buck. That’s a cool accomplishment, but, unfortunately, it’s the exception. Ultimately, workers with more experience—and higher salaries—have proven to be the better choice.
But does a higher payroll really cost more? Many times, it’s not even close. My customers have more confidence working with experienced rather than inexperienced staffers. Sure, experienced employees may command higher salaries and more benefits, but they’re usually more productive, as well as more mature. Not to mention the boost to shop credibility when your crack staff is on the job.
My experience has shown that paying above-average wages generates appreciation and confidence in management. We even pay for health insurance so employees can keep more money in their pockets. In a way, you can equate it to quality over quantity.
This doesn’t mean a shop shouldn’t trim an inflated payroll. Obviously, there are circumstances that justify cuts. Last year, I terminated one of my top-paid machinists because of personal issues that distracted him from work and his overly conservative machining philosophy. He was talented, but lacked self-confidence and was costly. Or, perhaps a longtime and well-paid employee no longer has the mental and physical stamina to keep up and becomes a financial drain. A more drastic scenario involves removing most of the staff and literally doing the majority of the work yourself just to keep the company afloat.
These things can happen, but don’t assume experienced, well-paid employees will cost you more money in the long run. Whatever a company saves in lower salaries and reduced benefits could be offset by lower productivity and attendance, increased training expense, and the increased potential for rejected parts, among many other factors.
When my roundtable meeting wrapped up, I realized I was the only one recruiting the higher-paid, experienced workers and leaving the less-experienced help for someone else. A few participants nodded their heads as though it made sense, and one expressed his appreciation to me for having the guts to do it. I thanked him and informed him that successful machining requires serious skills and a high level of maturity. And the resulting peace of mind is priceless to a shop owner or manager. I told him that my hiring approach wasn’t gutsy, but a matter of necessity. CTE
About the Author: Keith Jennings is president of Crow Corp., Tomball, Texas, a family-owned company focusing on machining, laser cutting, metal fabrication and metal stamping. He can be e-mailed at email@example.com.
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I disagree to some point, I have less experience than some and therefore don't expect to earn their salary. But what hope is under pay a little and it will come back in the form of training. The companies advantage: pay me a lesser wage, then in a period of time have a skilled employee. That employee will be loyal (hopefully), trained exactly to the Co. standard (no bad habits to break) and realize the more I learn and better I perform here the more I will make to a point.
Granted you need a person who wants to learn and has the ability to grasp what the concept that are needed to perform the job(i.e. math and etc.) But boils down to is: they trusted in me, trained me and ultimately rewarded me with skills and a bit higher pay. Am I going to pick up and leave for a few more dollars? no. Am I going to want to learn more either on the job or evening classes? yes. I think this method establishes good relationships. There are bad apples I know and there are folks who just don't have it mentally, but all in all I think it is a better method. I don't have an MBA from Wharton what I do have is +/- 20 years of managing and sitting the lunch table and listening and a dash of common sense. Seen all types come and go, but I have a feeling of who is hanging plastic vs. Brass.
I think there are forces that will always introduce young workers to a workplace, such as:
"My kid/nephew/neice is looking for ........"
Resumes at times of graduation.
Heavy lifting requirements.
Requests for HR to speak at educational institutions.
Restrictions on health insurance for new hires, such as previous conditions, one year of service before applying, etc.
Restrictions on retirement provisions.
A preoccupation with avoiding "bad habits" candidates.
A preoccupation with avoiding "they ask too many questions" candidates.
A young person may not realize the best time to square away severance packages is at the hiring process, and older employees are more likely to ask about severance, a vacation after six months, vacation time beyond what is volunteered, etc.
If the stress is on "older candidates are worth the trouble", I see no harm in that stress.
I'm sure your method is best long term. Here in Denmark we know we don't have a chance of competing against low wage countries so the focus is on being better at innovation and producing high quality.
Originally Posted by PracticalMan
Having and training inexperienced workers is fine but if low wages is a top priority who's going to be around to do the training? A problem is often that to many a true profesional makes things look easy until you try doing it yourself.
I wish you the best of luck and am sure you'll still be in business when others have buckled under.
We find that even with the current market conditions, a good experienced machinist is still hard to find. That leaves us with little choice but to hire inexperienced workers, but as long as they have good attitudes, and we have robust practices, they can succeed here as they learn and advance.
That's one way to go but it takes time and patience and can prove costlier than anticipated.
Originally Posted by Dave Sterling
My problem was always finding people good enough. As someone said "Anyone smart enough to work for you is too smart to work for you."
I agree with Mr Jennings. I had a small machine shop in Ontario employing approx 25 people, Most of them skilled machinists with four apprentices.I tried semi skilled labour on the c.n.c machines, but had to supervise and quality check more closely. There was a tendency for the lower paid worker to stop work when faced with a problem whereas the skilled workers used inititive to overcome most difficulties. As an incentive I paid 5% of the net profit to the employees. It worked very well.
While I agree that experience and professionalism are wonderful, I do not agree with shunning the inexperienced and young. Everybody who is old and experienced started out as young and inexperienced. If we turn away those who are young and have the enthusiasm to learn and work hard, then those skills will go elsewhere. Then in 20 years, there will be no old and experienced. It's a case of chicken and egg. You only want the experienced workers, but how do they get the experience to begin with? Can't have it both ways.
I might have missed something but I didn't see any post suggesting that the young and inexperienced should be "shunned", just that no company can run succesfully without some experience available.
Originally Posted by whateg0
Within any company there will always be those that have more experience than others. One of the best things a newbie can do is to ask "Why?" to avoid "doing things as they have always been done" just because "It's always been like that".
The option of the short term gain by down skilling the work force may well led to problem in the future as things pick up. No experienced or skilled workers and no real way to get them back in a hurry.
I would see this as the real problem that could bring down any of the short term gains of the previous decision.
sure you need some highly skilled people but also some less skilled workers.
coming from a company that has less than 20% of employees it has 20 years ago we retired or laided off all the less skilled and less senior workers.
you get left with a extremely highly skilled workforce that many had to reapply for different jobs. most put into lower paid positions (they were given the chance to leave). The company wanted few experts in only few things but people who were experts or at least competent in as many things possible. better to react to new and changing business conditions.
but this leaves highly skilled people who are under paid and no longer want to do the "dirty apprentice jobs". this required a few more lay offs to get rid of the really unhappy employees.
what do you do with an employee with 35 years who refuses to do some jobs so an employee with 31 years has to do all of it ?? I mean after a certain point having more years experience means little. Sometimes it becomes who is physically and mentally able to do the work. Many times a employee willing to still learn and try to solve new problems as well as get dirty are the most valuable employees.
i have seen some management prefer kids out of college. they tend to be better trained in newer technology and willing to work cheaper and willing to get dirty. Even me I went and took night school CNC courses. My abilities are at least 25% greater now than 10 years ago because of still willing to learn new technology.
I still believe if you work harder and smarter than another you deserve to be rewarded. Worst thing you can do is pay every one the same regardless of abilities and performance.
Still shops where everyone gets top wage cannot compete with a shop with a mixed group of employees of different wage grades. Not every job requires a top wage earner. You can pay someone $30/hr to clean toilets but most will not be happy doing the job for months and years.
Keith is in a position to cherry pick the talent that is looking for work. If you don't have a help wanted sign out in tough times, you will never have a chance to see what is available! I have one customer that has turned over a portion of his workforce by letting the troublemakers, go and picking up employees with better talents and attitudes. He also will take in work with no margins at very slow times so his best employees see no need to leave... the shop is busy most of the time.
Absolutely agree, Dave.
If they are willing to learn and grow with the best interests of the company in mind, then we are all for inexperienced new hires. The specialization boom of yester-year is long since gone and we, as manufacturers, are now somewhat responsible for training the next crop of potential candidates.
Re inexperience. What is the responsibility ratio for training and educating machinists in the USA? I'm thinking what does a company do and what is state regulated with regard to technical schools and colleges.
Assuming there is an apprenticeship (and it has nothing to do with the age of the apprentice) then who pays and how is the cost divided?
I've been a machinist for 10 years and have about 3 years experience on CNCs. I guess you can say I'm somewhere between inexperienced and highly experienced. Hiring someone that is somewhere in between like myself could give you best of both worlds. Young, willing to learn, but not too inexperienced. This might be your best bet.
You won't have dead weight of older (more experienced, but not as willing to learn newer methods or machines, health issues) or, younger (little experienced, though willing to learn and healthy, but with maturity issues.
I had to teach myself on a CNC. I guess you can say I took matters in my own hands. Eventually they HAD to get one of the company trainers to certify me as "officially trained" on the equipment because none of them wanted to come in on 3rd shift to train me. Not exactly good company policy practice. If I had got hurt, it would have been my fault and not have got anything out of it. But at the same time how was I supposed to do my job when they replaced my old machine? I hear this goes on alot with alot of companies. Even at a printing company where my dad works. They have to sign off on a job or they get fired even if they aren't properly trained on certain equipment.
Next time I'm in this situation I'm going to go above some heads and get what I need done first.
OK, sorry I went off the subject.
In my opinion Mr. Jennings pretty much sums up my overall experience both during the entire time I have been hiring people and during the recent recession. My shop is mostly a fabrication shop rather than a machine shop but the same principles apply.
Better pay does attract better quality employees, as a rule. However to just all of a sudden make that switch will usually not attract the quality people. Many of the skilled workers know each other, know of each other, and all know the "cheap" shops from the "better paying" shops. If you have a reputation as a low paying shop it will take a couple of years to reverse that perception.
I think if a shop sets up a decent written pay scale and stick to it they can employ both skilled workers and not so skilled workers. There is nothing wrong with hiring someone with little experience and lots of drive to run saws and drill presses for less money. That employee may turn out to be one of the best paid worker in the company. My production manager started with me 15 years ago as a helper. He can run every machine in our shop if needed.
What the recent recession has done for me is to allow me to hire much more experienced workers at the going first class rate. Some of these guys worked at shops making much more than the normal job shop. The local Ford plant closed a few years ago. Another local branch of GE also closed. International Paper closed a nearby paper mill. All of these places put some highly paid men on the street. In many cases the workers were not all that better but among them were some great employees. I wound up with a couple of them.
Low Experience and Pay Vs High experience and pay
I think it is wise to utilize the more skilled people because there are the ones who will leave the trade behind if they can not make a honest living at it then you have to train up what you have to meet your needs. If you do not need anyone with experience then no problema just hire anyone.
The man who said it made sense to pay less and train up the ones you have which I think is a rational idea. The problem is that the ones training may not know enough themselves to transmit anything of value. Or the ones who do have good knowledge are not good at transmitting it. Many of these guys are expected to do it for free and to do it along with everything else they must do to boot! It is hard to train up someone up even if one has a willing candidate. It can be done for sure and done well and the good shops have done it and kept their talented people they brought up through the downturn. Now they are ready to roll when business is comeing back because they have the experienced and trained employees to do the jobs. They get the work while other shops are working through problems. The boy Scouts said "Be Prepared". Good advice even in these modern times.Jus sayin.