Buisiness Rant, what to do????

After 16 years of running my own shop, I never thought I would be in THIS situation. Started out by myself, with my wife helping now and then. Hired my first, then second, on up to 11 guys at one point. 02/03 hit, and as everyone will never forget, the bottom dropped out of manufacturing completely. Somehow, managed to survive those times, thanks to my wife and her ability to manifest money out of thin air. When your payable column is almost twice your receivable column, your in trouble. Learned some valuable lessons. Downsized to 2 employees besides myself and my wife. Became a lean company, with totally controlled debt. 08 came around, and we never skipped a beat. Actually had a record year for being so small, and it was profitable. My customers are the greatest. All of my clients are global companies, that have been with me since I started, and we have nearly a 90% quote to order ratio. My customers have been pulling me along considerably. We are debt free, accept for the new VF4 being delivered in 6 days. Sales increased 30% last year, and look to increase another 10% this year. We are working 10 hour days, 5 days a week, and sometimes Saturdays. Profit margins are high, and spend money generously on new tooling to save time. Now, here is the problem. I cannot find ANY employees with ANY experience. Ive been searching for a year now. Just lost a key guy in the shop, that wanted an office job. Offered more money and schooling, but he accepted another job, and off he goes. Been doing alot of interviewing. So far, my choices are between one guy thats been in prison for the 13 of the last 15 years, with a record a mile long. Not going to happen. The other choice is a guy that I offered to hire months ago. Never heard back from him. Out of the blue, he wants to come talk again. Ok, fine. Offer him the job again, and he isnt sure he wants to leave his secure graveyard shift job????? More money, air conditioned, no production and first shift. The only people we get in the door, are folks wanting to be button pushers. We dont run production, so I dont need button pushers. What the hell is this????? Is this industry dead for talented employees?? Never in all of these years, did I think what would put me out of business, is NOT being able to find people to run my machines. Money is good, profits are high, customers are fantastic, but no one to run.

Im left with a couple of choices. I am currently training one individual, who is dedicated, and should be up to par with the year. I could hire more people who know nothing, but I dont exactly have time to train them all. Secondly, I could start brokering work out, but cannot stand that idea, as I have done it in the past, and nearly lost clients from it. I could slow our workload, but my clients need their work done, and if they like us already, why send them to someone else. Lastly, I could just put it up for sale, but who wants to buy a turnkey profitable business, that doesnt come with employees!!

I cannot believe this situation. Im exhausted. Havent had a break in almost 2 years now, and there is no relief in sight.

How are you advertising and how much do you pay? What are expectations in terms of OT? Do you offer any benefits - health insurance, life insurance, 401K? What is your vacation policy? Is the shop clean or a sty? You haven't given any information to determine if what you are offering is even remotely competitive.

My experience has always been that the quality of people coming in the door reflects what you are offering. If you're looking to pay $10 you're fishing in a much shallower part of the pond than if you are offering $25.

If you're not satisfied with the people you are seeing, look at what you have to offer and figure out why you can't attract a good candidate.

Nobody went into this trade for a long time. And at least in this area few people train. We have a community college but it is limited on space and we only have them for 2 years. Spread out among not only machine shop classes but english, humanities, industrial safety, etc. Plus part of each class is now required to be a writing class. So we only produce entry level employees. When the machinists start to build a decent amount of skill the larger companies scoop them up. Cuts way down on training. So not surprising.

As for attracting people. Go to craigslist. Look at "machinist" jobs. The title is machinist but the job is part loader at $8 an hour. So people that would have been drawn into the trade see that. "Oh, $8 an hour machinist, forget it" So the temp agancies screw us by listing operator jobs as machinist jobs and scare people away.

You need a break or you will go mad. One obvious answer to your problem. 90% quote award rate. Raise your prices.

That is a tough spot seems to be the norm.
If you can't find the people only avenue you have is work smarter and raise your price.
Hopefully you're a CNC shop, perhaps fixturing your parts on a 4th axis, longer run times with more sides completed. Could be time to look at a simpler robot to load / unload.
Are the machines to set up as a work cell.
If the prison guy is willing why not give him a chance, you could corner the market in custom shanks.
Never easy being the over worked owner of a small shop.
Good luck.

The problem is the industry picked up meaning you will have bunch of leftovers to choose from. The higher end employees (programmers, supervisors, setup people etc) are employed which means you need steal them from someone.

That's means pay more money not .25, .5, .75 not even a dollar more like $2 to $3. You need to have Benefits, reimbursement for schooling, match vacation etc

My condolences.

Not exactly, but in a general sense, been where you are now.

Decided to scale down to me, and now to me and wife. Much happier and more relaxed.

You might consider downsizing a little. Choosing best companies to deal with that you can manage to make a decent living with and keep them happy.

Getting harder and harder to find and keep good help. Life is too short to be agonizing over all this instead of enjoying what you have.

Want to move to Pa. there is a vacant lot next to my house. Walking to work would be great.

Stop buying 3 axis verticals would be step #1.

I know several guys that have spent time in the big house and they learned there lesson and are first rate people. It depends what your guy was sent up for. Assault or other violent problems would rule him out but if he was sent up for smoking weed or some other minor offense I would give him a chance.

A big factor: WHERE in Wisconsin are you? I had plenty of classmates, a good portion of them young and eager, in my classes here in Minneapolis. But I don't want to drive 20+ miles into the suburbs, or even further into the exurbs to get to work, and neither do they. The people that are needed in this industry are young and smart, but want the benefits of being in or very near the cities. Much of the appeal of suburban life is gone in newer generations (and I agree with this - at 31), especially with high gas prices and sub-par public transit in many places.

Bottom line: who are you trying to attract, and how far will they have to travel?

Also, I know of people who've been in and out of prison who probably would have done fine if someone had only given them a job that paid their bills. Not saying this guy is one of them, but the stigma attached to prison is certainly not a factor to ignore concerning recidivism rates. Whatever happened to "I did my time"?

Though I sympathize, the laws of supply and demand solve these problems. It's like selling a house. If it doesn't sell after a while, the price is too high for market conditions. You lower the price and it will sell. Skilled tradespeople will take the best offers, and that may mean the remaining ones have left the area. Do you have any other local manufacturing? If there's a shortage, the going rate will be high until people decide it's a good trade to get into. Then the supply increases and wages stabilize. It's like the great non-existent engineering shortage. If companies offered true engineering wages, they find a lot more qualified takers.

dstryr said:

Stop buying 3 axis verticals would be step #1.

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+1
A horizontal with a pool would be on my list of things to look into. This will help a lot with labor shortage gives you the advantage to run many different jobs unattended. But it also depends on what your parts are.

Jason,

Very clean, well lit shop. Air conditioned, lots of natural light. Clean machines. No 401, but we have a employer contributed simple ira. Typical vacation plan, like most have. We advertise 25-28 for programming, and 22-25 for setup. I would pay 50 an hour to the guy that can walk into my shop and do what I do!!
As for the multi axes machines instead of 3 axis, are you saying that because I have 3 axis machines, no one wants to work for us?? Or, are you saying I need a multi axis to make a larger profit margin? Our profit margins are as high as they are going to go. If its this difficult to find basic setup people for basic 3 axis, finding one to setup 5 axis isnt going to be any easier. We have tried raising prices, and that usually results in the work going elsewhere. We dont do any piddly little work for 25 bucks here and there, our orders are usually between 1500 and 30 grand. Latest and greatest Mastercam setup. Level 3 with solids and lathe.

Im sure the problem is, we are a fairly small shop. People tend to think of a small machine shop, to not have any security. (Ive read it on here to) Thats a load of crap. You are, and always will be a number at a large plant. When the bottom line dollars say let people go for the next month, you get laid off. I dont, and havent ever worked that way. But, how do you draw people in, to prove that to them, I dont know.

I guess we will just keep plugging away at it. I dont have alot left in me, and my kids are growing up without me. If things dont change by spring time, we will cut the work load considerably, and step back 8 years in time.

We are in a small area for sure. Some manufacturing, but not much. Nice to live 2 miles from my shop, but the nearest larger population is 20 minutes away. 30 minutes after that, then 40. Our type of work, doesnt really justify a 5 axis. If it did, I would have one. My next lathe will definitely have live tooling.

Here's a suggestion from someone who wanted to work in what it seems like you've got: go to the local community college/trade school and find out what the people there want to work on. Do some outreach. You'll probably have to do some training, but make it clear that the harder they work and faster they learn, the more they'll make, and quick.

You still didn't let us know WHERE you are. It does sound like a great shop, and if I'd had someone like you come into the class while I was attending, I would've been first in line. I hated working for a truly large company.

How about using a temp employment agency? They take care of everything and you just write a check. You can go through employees every time you change socks until you find a keeper or two you can hire permanent.

Forgot to mention the prison guy. Lets just say, after speaking with his parole officer, I had to stop her in the middle of the long list of offenses, ,to say this isnt going to work. The reckless injury with a base ball bat got him the first 7 years. Grand larson a few more, distributing cocain and sexual abuse, was where I cut her off.

We are in southeast Wisconsin near Lake Geneva.

Your productivity with multi axis machines will go through the roof... Granted your initial time programming will be longer but at the end of the job, your time programming the 5 axis machine versus 4-5 setups on a vertical will be the same. However you only have to do 1 setup.

We have seen it first hand. At one point we had 12 3 axis verticals. Sold a couple verticals and now have 2 3+2 machines and 1 4th axis horizontal. Anything of decent volume and repeat work gets thrown on 1 of those machines.

Do you have any repeat work? we don't so I'm not reaping the full benefits of this yet but working on it.

Sounds interesting to me. The commute would be a killer though

gixxergary said:

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I guess we will just keep plugging away at it. I dont have alot left in me, and my kids are growing up without me. If things dont change by spring time, we will cut the work load considerably, and step back 8 years in time.

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Sounds like a plan to me..

Once your kids grow up without you, how much money would you give to buy back that time with them?