Today’s show is the first episode in our new season about hiring and retaining good employees in machining companies.
Our guest is Scott Eighmy, co-owner and CEO of American Turned Products, a medium-sized precision machining company in Erie, Pennsylvania. Scott says his company is struggling like many manufacturing businesses right now to hire new good employees, so he needs to get the most out of the people he already has. He says small acts of recognition and making employees feel heard is key to maintaining a happy and productive workforce.
Key Takeaways From the Interview
Background of American Turned Products
American Turned Products (ATP) employs a little under 100 people. It serves a variety of industries such as automotive, appliance, military, and hydraulics, primarily focusing on high volumes—jobs with quantities of hundreds of thousands or millions of parts. To produce the large quantities of precision turned parts the company has many EPIC CNC Hydromats and INDEX CNC multi-spindles.
The the city of Erie and its surrounding areas supply ATP with a population of around 250,000 as a source for employees. Erie has a long history of heavy industry, its educational system is solid, and the cost of living is relatively low. A person can purchase a nice house there for $120,000.
Wages at ATP range from $12 per hour for new workers to $24+ on the higher end. Most of the hourly workers at the company start at the bottom and are trained in-house.
Today’s Difficult Labor Market
Scott says the current tight labor market has been challenging for ATP. He says the precision machining business is hot right now, but potential workers don’t have enough incentive to get jobs while they can still receive the generous unemployment benefits brought about by the COVID-19 crisis. Scott says he hopes Pennsylvania will soon stop taking the government subsidies that fund the special unemployment benefits, as several other states have recently done.
In typical times, ATP finds new employees by using temp agencies, but right now there are no temps available. The company also tries to find new employees using social media such as Facebook and LinkedIn, but that has also not yielded great results.
Culture of Employee Engagement
Scott says the millennial employees at ATP often ask why they have to do certain things, rather than simply accepting orders. The company tries to show them respect by allowing employees to ask questions in meetings and giving them straight answers. For instance, if management asks employees to prepare equipment to be sold, sometimes people ask why the company is selling it. Then managers do their best to explain why the change is necessary.
ATP wants its hourly employees to understand the purpose of their work, so the company often sends them to visit customers. Also, when customers come to visit the company, shop employees give them the tour, rather than the managers. Scott says, “The more employees understand what is important to the customer, the better the product the customer receives.”
Making Employees Feel Valued
Scott says ATP’s management philosophy is to show its people it respects and values them. It’s not uncommon for the company to have small celebrations, like a pizza party for a team that succeeds in setting up a challenging part.
He also says the company demonstrates how much it cares about its people by constantly emphasizing the importance of safety. Management has daily meetings with employees on every shift, and the first topic they go over are safety issues in the plant. In addition to preventing accidents, Scott says it demonstrates to employees that the company cares about their wellbeing.
He says if you demonstrate to people that you care and show optimism, people will be loyal and do good work.
Question: Do people at your company communicate well?