Takin' Care of Business: How the Industry Does It

Published: October 01, 2000, By Teresa Koltzenburg and Claudia Hine, Senior Editors

Success, we know, requires good equipment and good employees, but finding and keeping the latter is a challenge for employers today. The industry and many companies are making some headway in the struggle to find good workers. Here's how.

When Bachman-Turner Overdrive released the song "Takin' Care of Business" in 1973, they hit the "big time." Little did the band members know that it would remain in play for years to come, even end up a classic. And they certainly didn't know it would garner a mention inside the new millennium in Paper, Film & Foil CONVERTER. Though the song is nearly 30 years old, it has a certain pertinence for today's work world. With labor shortages, e-retailing and e-business, mergers, acquisitions, contract negotiations, flex time, health-care coverage, time/life/work issues—take a breath—the list could go on and on, company owners and plant managers have more business to take care of than ever before.

Unless you're a one-person operation, taking care of business begins with taking care of your employees. Without them, there is no business. And in today's economy, if you don't take care of them, someone else will.

It's an employees' market; if they're not satisfied with what you're providing them, it's fairly easy for them to jump ship and climb aboard a new vessel that offers them more money, more perks, more time off, more autonomy, more say in company operations, more, more, more.

Yolanda Simonsis, editor-in-chief of Paper, Film & Foil CONVERTER, recently wrote several editorials on the challenges of finding and keeping good employees (see March 2000, p8; May 2000, p8; and July 2000, p6); she had no idea they would spark so much discussion. Both suppliers and converters, even the president of the Tag & Label Manufacturers Institute (TLMI), responded, indicating their concerns about the lack of qualified labor today and for the future.

At least everyone is talking about it. But even so, the labor shortage remains a significant problem, and it's one that doesn't seem to be waning.

Doing More with Less
The US Dept. of Labor estimates the available workforce in 2006 will number 141 million, 10 million shy of the 151 million jobs the department estimates will be available that year. In citing these statistics, futurist Edward D. Barlow Jr., Creating the Future Inc., painted a challenging picture for employers in his presentations at TLMI's annual meeting in October 1999 and at Radtech 2000 this past April.

The picture may be a little less bleak (emphasis on "little") for employers in the manufacturing sector. According to Allison Thomson, senior economist at the Bureau of Labor Statistics, an agency within the US Dept. of Labor, the decrease in manufacturing employment has slowed in recent years. "The historic decline in manufacturing employment is expected to moderate over the 1998-2008 period, amid sustained gains in productivity and real output growth," she reports. In nondurable manufacturing (which includes converted paper products; pulp, paper, and paperboard mills; paperboard containers; and plastic materials), the overall number of jobs is expected to decrease marginally until 2008, while the output, or productivity level, is expected to experience a slight increase.

Obviously, technological advances and subsequent automation are responsible for the diminished number of workers needed in any manufacturing environment. But automation hasn't yet—and probably never will—eliminate the need for qualified people.

So what does this mean for your converting company over the next few years? Well, most likely, it's going to have to operate much as it does now: Employees will be in short supply, but actual work will not. Your operation will have to maintain high, even elevated, production levels with a minimal labor force.

Finding and keeping qualified, diligent employees will be one of the keys to keeping your converting operation producing and profitable. Some of the advice that Edward Barlow imparted to TLMI and Radtech attendees spoke to this concern: As an industry, he said, we need to create a workforce pool for the twenty-first century, a pool that will enhance the capacity and longevity of the current workforce; attract and maintain a qualified workforce globally, nationally, regionally, and locally; and share the pool of workers.

School Is in Session
Most converters already recognize this need to "create a pool," and some, like Chris Fread from CMF Label, Nobelsville, IN, have taken the plunge. Fread was one of the readers that responded to our editorials; he and his partner recently formed The Flexographic Trade School in Charlotte, NC.

According to his correspondence (an excerpt of which appears in the May editorial), the school opened in May of this year with a class of ten students. "We will train and educate these students over a three-month semester.... The school actually will run production-level orders for label users, so each student will graduate with enough experience to step into a production environment and be an immediate contributor," he reported.

And immediate contributors they are: According to Fread, the first class graduated about a month-and-a-half ago and was a "huge success. [The graduating students were] gobbled up immediately. They all had more than two job offers, and once they decided, they scattered to various plants across the country."

The school continues to offer flexo training, notes Fread, with subsequent classes already in session. He adds that, at all times, the Flexographic Trade School will have a day class and evening class in session, but he notes the classes are staggered, with a different group of students graduating every six weeks.

Trade Groups Take Action
Organizations and trade associations also are taking steps to confront the labor problem. The Printing Industries of America (PIA) reports, "Many printers are addressing the labor challenge by participating in the time-tested `Employee Recognition Program' offered by the Master Printers of America (MPA), an affiliated group that serves the union-free PIA members."

According to the PIA, MPA's program "helps printers keep qualified and experienced workers by creating a bond between the company and its employees and building mutual loyalty. This loyalty not only creates a quality workforce but also a productive and dedicated workforce, [which ultimately enhances] the profitability of the printing companies."

To tackle the plastic industry's severe worker shortage in South Carolina, The Society of the Plastics Industry (SPI) recently unveiled a statewide training initiative. "With the remarkable growth of the plastics industry, there is an urgent need for technically skilled workers...," SPI notes. "The South Carolina plastics industry has over 230 facilities statewide and provides over 26,200 jobs for South Carolinians. The latest Plastics Industry Economics Report shows over $5 billion in plastics shipments from South Carolina, a 117 percent increase since 1991."

A result of the collaborative efforts of SPI and six South Carolina state agencies, the initiative was introduced last April at the Plastics Industry Workforce Roundtable held in Columbia, SC. Industry leaders attending the roundtable heard from a panel of technical training and employee-recruitment professionals that shared information on the initiative and on other resources provided by the state.

In addition, the SPI is addressing US workforce issues through its appointment of Gary Moore. Moore, who was appointed last spring and, according to the SPI, has more than 20 years experience as an executive and consultant specializing in workforce development, joined SPI in the newly created position as director of workforce development. "[He] will have direct responsibility for the strategic planning and implementation of programs to provide solutions to the plastics industry's workforce development needs, including recruitment, retention, training, and professional development initiatives," reports the trade organization.

Which Management Methods Work?
Imberman and DeForest, a management-consultant firm in Evanston, IL, recently polled 427 plant managers in six states—Illinois, Wisconsin, Pennsylvania, Ohio, Michigan, and Indiana. The survey identifies ten different methods plant managers use to discourage job-hopping.

According to the results, the most effective method is a monetary reward program, such as gain-sharing bonuses, wage boosts, lump sum bonuses, and merit raises. "Used by three-quarters of the plant managers [surveyed], this method is rated about 60 percent effective," reports Dr. Woodruff Imberman.

The second most effective method, says Imberman, was the use of attendance and on-time bonuses as well as transportation aid. "Tried by nearly three-quarters of [those questioned], this method is considered about 30 percent effective."

The most popular method used by plant managers to lessen employee turnover, the survey indicates, is the use of reward parties, such as company-sponsored luncheons and dinners. Reports Imberman, "Used by more than 80 percent of the managers, this method was rated about 25 percent effective."

Know Your Employees
Whether it be wage increases, bang-up benefit packages, or morale-building company-sponsored social events, converting plant owners and managers are trying many different ways to get the good employees they have to stay.

Going a step further and attempting actually to understand your workers is likely to help you implement effective employee-retention programs and initiatives. But that can be difficult, because many of the younger employees—the infamous "Generation Xers" and the newly working "Millennial Generation"—are operating under a different mindset than their Baby Boomer and WWII-generation bosses and leaders.

Claire Raines, author and a leading expert on Generation X, addressed these "generational-clash" issues at the Gravure Association of America's (GAA) convention last spring.

According to Raines, there are significant differences among the four generations, and she says understanding these differences is essential to managing employees effectively. In her riveting presentation at the GAA meeting, Raines identified a "Top Ten" list of things managers do that drive their younger employees crazy:

1. micromanaging

2. failing to give feedback and regular performance reviews;

3. ignoring employee opinions and ideas;

4. overlooking unacceptable behavior from staff members;

5. answering questions with, "Because I said so"—or answering with a quip that reflects that attitude;

6. sharing the stress of a visit from a district or corporate visitor with the whole staff;

7. allowing the workplace to be disorganized, cluttered, or dirty;

8. throwing people into jobs they're not trained for or qualified to do;

9. giving an insincere, gratuitous "thank you" and pat on the back;

10. giving raises that are virtually meaningless (a few cents an hour).

Raines specifically identified the "generational personalities" among the generations that are working together in today's work environments. For instance, she classifies the WWII generation's work ethic as "dedicated," the Baby Boomers' work ethic as "driven," and the Gen Xers' work ethic as "balanced." Raines says that, in terms of generational likenesses, the Millennial Generation members are more like the WWII generation than the Baby Boomers and Gen Xers.

With all the other things going on at your operation—meeting just-in-time demands, complying with Environmental Protection Agency regs, keeping up with new technology, etc.—it seems like a lot of work to delve into the generational intricacies of the people that are working for you. But this information is quite powerful; it enables you to tailor your management approach to your employees and provide them with a more ideal workplace in which they will be likely to stay.

You can learn more about Raines' ideas by checking out the books she's co-authored: Generations at Work: Managing the Clash of the Veterans, Boomers, Xers, and Nexters in Your Workplace; Beyond Generation X: A Practical Guide for Managers; and Twentysomething: Managing & Motivating Today's New Work Force. For more information about Raines visit generationsatwork.com.

New Company, New Ideas
So now that we know that converters, trade associations, and experts are discussing labor, what are converters actually doing to recruit and keep employees? To find out, we talked to a few.

When PFFC visited Innovative Packaging Corp. (IPC), Milwaukee, WI, a year ago last summer it was quite clear that "something different" was hatching at the year-and-a-half old corrugating plant. A walk through the facility with John Lingle, president, and Terry Paulson, VP, proved that their claims of wanting to start a business "to provide themselves and their future employees with a nice place to work and a decent living" were true. It was a picture of an enthusiastic, well-run, extremely clean, employee-friendly work environment.

But even so, Lingle reports the problem of recruiting, training, and retaining employees remains the company's "biggest challenge. It's not an easy situation. We're a new company, which makes it a little more difficult, because people don't have that `tradition' of coming to work at the same place for years. So, it's easier for them to job switch, and that's been difficult for us. But I would say we've done very well with the core group of people we've had and developed from day one. The reality is, though, that the last five, ten positions you try and fill, there's been a lot of turnover in those positions."

IPC engages in some unique practices designed to allow employees to work more independently, which, in turn, fosters a sense of personal job responsibility and performance. "We do not have any supervisors," reports Lingle. "We have team leaders that are part of our hourly work force. It's a non-union facility, and our team leaders are responsible for their shifts and their crew, but they also each have a job. Basically, they run our control room, and we have one in shipping, but he also works hand in hand with the people out on the floor. For us, this is very critical, because we do not want layers of management that get in the way of communicating with our employees."

A weekly meeting provides a forum for employees to communicate. Lingle says, "Basically, all of our employees meet with their team leaders and some of the management every Monday, and we do that religiously, both the salaried and the hourly. We bring in lunch, and we talk for an hour. We know it happens every week, and it's a good vehicle for any issues, concerns, feedback, and any kinds of rumors that start. It's a very good, relaxed atmosphere in which to say, `Hey, this is what's happening, this is what is going on. Here's how we're doing.'"

As far as financial compensation, IPC practices some traditional methods, such as the annual salary review, but it also promotes productivity, performance, and company and personal profitability through its progressive "team-results sharing plan." Lingle says the plan provides everyone in the plant with the opportunity to earn 18% of their base pay. "We pay that out quarterly, and that's based on five things: safety, quality, on-time delivery, waste, and productivity."

He elaborates: "If our on-time delivery is between 97 and 97.5 percent, everybody gets one percent. If it's between 97.5 and 98.5, you get two percent. And if it's better than 98.5 percent on-time delivery, everybody gets three percent. And all of those categories add up to 18 percent."

According to Lingle, the plan promotes teamwork among all the plant's employees. "For instance, our customer service people know they are just as responsible for making the plan work as the individuals working out on the floor. They won't take the order if they are not sure we can deliver. But if they do take the order, the guy in shipping knows that if he commits to it, he has to make it happen. And the production group knows if they lose time, and they're behind and don't make their production, they might have to put in extra time, or they might have to pick up the pace in order to make it happen. So everybody, in a roundabout way, has an impact."

When IPC started up a little over two-and-a-half years ago, notes Lingle, the company purposefully instituted an insurance/benefits package that is family-friendly and that's the same for both hourly and salaried employees. "We've done that because we're very adamant that we're all here working together. I don't understand why companies have a different plan for the hourly people. They are here working, they're trying to support their families and do everything just like I am, so I don't know why we should treat them any differently."

A Cool Place to Work
With a second extruder on order, fast-growing Coating Excellence International (CEI) is in the process of expanding its Wrightstown, WI, facility. As part of that expansion, the company is going to air condition its machine rooms. Michael Nowak, president, says the decision makes sense from an electrical standpoint and a quality standpoint, but it also sends a message to the employees about how important they are. "When employees can work in an air-conditioned building, or they can go somewhere else and work—if everything is equal—where are they going to go? I'd sure rather work in the air conditioning," he adds.

Executive VP William Arndt does all the hiring at CEI, and he's been busy. The company recently installed three new pieces of equipment, including a Windmoeller & Hoelscher flexographic press, and with the new extruder on order, his workforce has grown from 30 people at the beginning of the year to 55 employees today. A number of new employees have come through current-staff referrals.

When Arndt interviews a prospective employee, he tries to make the person feel as comfortable as possible by taking him or her into the plant to spend time with the operations crew. "The people on the floor get to talk to that person in their own element," he says, "and if the prospective employee is interested in the job, I'll talk to the people on the floor to get their impressions."

Besides the "cool" environment the company's new air-conditioning system will supply, CEI possesses a number of other employee enticements. The company is located strategically—halfway between Appleton and Green Bay—so it can draw people from either city. The facility offers an exercise room, and a day care center is just two blocks away.

Employees hired at CEI can control the pace of their salary increases through an advancement system based on their level of knowledge, not just their length of service. The company has a book that lists the competencies employees must master in order to move to the next salary level. A competitive benefits package also includes a 401(k) plan, profit sharing, and independent investment strategy advice. Employees can get their auto and homeowners insurance through the company by payroll deduction.

However, both executives agree it's the simple things that count. "We're not like many organizations that have managers walking around telling people what to do," says Nowak. "We hire experienced experts and let them do their jobs."

Label Company Keeps `Em Happy
Premiere Labels, Troy, OH, provides a bit of an anomaly in today's manufacturing employment environment. According to company president Eric Magel, the label converter and supplier of pressure-sensitive labels has press operators actually waiting to work at the ten-year-old company!

"After a number of years in business, with our name out in the industry, and [the fact that] we have an overall good relationship with our employees, the word spreads pretty fast. People are interested in working for our company because, number one, we're on the higher end of the pay scale. Secondly, all of [our] equipment is state of the art; we're not afraid to spend money to buy the finest equipment or new products."

Magel says Premiere Labels has experienced "very little" turnover in the last year, a remarkable feat considering the excellent state of the current job market.

Training is another thing the family-operated company is not afraid to invest in, says Magel. Each full-time operator has no less than 15 years experience, and the company holds regularly scheduled training sessions, during which operators might spend a day practicing setting impressions.

The training and experience has paid off for the narrow web converter; the company has garnered dozens of printing awards and includes among its satisfied customers The Disney Co., Warner Brothers, Reebok, and Sears. "We enter the FTA [Flexographic Technical Association], the TLMI—basically all of the different industry award competitions. So, if our operator wins an award, he or she gets a plaque and cash. And if a press operator has an outstanding year, or if he or she just does a great job—it may not be only because of awards, but because of productivity and overall performance—we'll take the higher-mileage salesmen's cars (once they are finished with them, of course), and we give those as a reward to the deserving employees."

Magel also contends the "family-oriented atmosphere" is responsible for the company's success in employee retention and for its solid reputation. "We do a lot of community things," he says, "such as the Chamber of Commerce, and we have a lot of company picnics. We also have our own golf league, bowling league, and softball team. So we have a lot of activities outside of work; we get together and have a good time."

Going Global with Benefits
It is harder to recruit and maintain a qualified workforce in some regions than in others. This may be part of the reason that, for example, IPC in Milwaukee has had trouble keeping people in five to ten of its positions, while Premiere Labels in Troy, OH, has a waiting list of people wanting to work there.

Operations manager Richard Lee, Autotype Americas, a film converter located in the northwest Chicago, IL, suburb of Schaumburg, says of the region where he works, "You talk about unemployment being 4 percent nationally, but it's probably half of that out here, which makes it that much more of a challenge to entice and keep people." Yet, the company's clean room conversion operation has seen no turnover in the last year.

How? One perk that keeps Autotype's employees happy is the liberal vacation policy. The operation's parent company is Autotype Intl., a U.K.-based enterprise; because of this, its employees benefit from the generous vacation policies common in European companies.

According to Lee, first-year Autotype employees are entitled to up to 15 working days of vacation with pay. In subsequent years, this goes up to 20 days. "I think our vacation policy is the number one reason that we have a good retention rate here," states Lee. "It has helped us recruit and retain people in both the office and plant environments."

Lee also believes the plant's clean room environment is a draw.

The company has had to recruit for only one position in the clean room; all the other sheet operator positions have been filled by employees that have been promoted from within the operation. "We were able to move them into our highest technical area, where we need the best quality and the most attention to detail," he explains. "We have a few success stories like that."

The vacation policy and clean room are not the only things that make Autotype stand out; the Schaumburg location recently earned ISO-9002 certification. Notes Lee, "The quality standards, the record-keeping, and the audits are intended to make us stand out from the competition. It shows we have reached the required disciplines to be a quality converter, and that's what we're trying to instill. We want to keep that pride and that teamwork in the forefront."

To celebrate the ISO achievement, Lee says Autotype's employees were treated to a day of good ol' American family fun. "We let everybody go home at noon that day and come back with their families for a flag-raising ceremony and a plaque presentation. Then we held an open house with tours. We had a barbecue with a disc jockey, a clown, and games for the kids."

More ISO Pride
For Corrugated Paper Products (CPP), Mishawaka, IN, earning ISO certification "was huge," says corrugated superintendent Brian Wisinski. "I think it gives employees pride in their jobs...because [they know] they are being held accountable, and they can prove that they're doing what they are supposed to be doing. We're trying to bring people on board, work with them, and get them to believe in the process and the procedure."

Because CPP emphasizes quality management stringently, its employees are expected to know the company's quality motto. When the quality assurance manager tours the plant and asks an operator to recite the motto, a correct answer brings a quick reward of five bucks.

CPP also uses a bonus system to recognize and retain its employees. "We have a lot of people that really strive to do a good job, and sometimes they're limited in what they can do because of a maintenance problem or a particular type of order they can't run as fast as they want to. But if they can attain a certain goal without sacrificing quality, they're rewarded for it," says Wisinski.

The reward surfaces where it counts the most—in their paychecks. Notes Wisinski, "We're trying to put a light at the end of the tunnel, because you could just come in here and bury everybody [with work]. You lose people that way."

Employees as Owners: Ultimate Control
The ultimate work environment, some would say, would be one in which you don't work, but then it wouldn't be a "work" environment, would it? Okay, so the next best thing may be a working environment in which employees benefit directly from the company's profitability: one in which they have a direct say in board and company decisions; possibly one in which the employees actually have ownership in the company in which they are investing their time and effort.

There are many factors that help create the "ultimate" work environment, but giving employees ownership—of the company and of their futures—is a good place to start.

That's exactly what Blue Ridge Paper Products Inc., Asheville, NC, has done: The company instituted an employee-stock-ownership program (ESOP) at its inception in May of 1999, one of the first companies in the paper and converting industry to do so, says Blue Ridge president/CEO Gordon Jones.

Forged from the purchase of some Champion (the widely known paper company) assets, Blue Ridge was made possible through interested investors and the employees' grassroots effort.

A paper mill in Canton, NC, an extrusion coating facility in neighboring Waynesville, NC, and five DairyPak converting plants (which are scattered across the US) were acquired in the original purchase from Champion, Jones reports. Champion announced it was selling the assets in October of 1997, and according to Jones, though there were interested parties, there were no takers. "It stayed for sale, but, eventually, a group of employees decided to take control of their futures," Gordon says.

The North Carolina employees especially needed to take control of their job statuses; without the jobs provided by the mill and extrusion coating facility, the Canton-Waynesville area faltered on the edge of economic instability.

"So," says Jones, "supported by the union, a group of employees formed an ESOP committee and began looking into buy-out options—how they could, as an employee group, buy the company."

Needless to say (otherwise there would be no work environment to talk about), the ESOP idea worked; with the help of a group called the "KPS Special Situations Fund," the employees bought the Champion assets. Blue Ridge is over a year old now and going strong.

The ESOP opportunity not only provided a means for Blue Ridge employees as a whole to control the work environment and have a say in their personal futures, but it also has given them status and recognition in company entities, such as on the board of directors, says Jones. "There are eleven positions on the board, six of which are represented by the investment fund. I hold one of the other five positions, and the other four are comprised of three hourly paid employees and one salaried employee. The hourly board employees are elected by the folks in the union, and the salaried employee is selected by the salaried workforce."

In addition to bringing employee participation onto the board of directors, Blue Ridge established another way for employees to have a say in company activities: Employees participate in what the company calls "workplace-culture committees."

Jones believes these committees provide Blue Ridge's employees with a significant voice and have contributed to the company's successful start. "These are open, sharing committee discussions. We have a committee in each plant site, and each has equal hourly-position and salaried-position representation. It's not always six and six; some of the smaller locations might have three and three, or four and four. But these workplace-culture committees are trying to change the way business has been done."

How Do You Do It?
"Trying to change the way business has been done." This comment by Blue Ridge Paper's Gordon Jones synopsizes not only how his company is "takin' care of business" but how the entire industry is addressing the current and future labor dilemma.

Paper, Film & Foil CONVERTER would like to know how your company is taking care of business. If you think your operation features innovative, unique, cutting-edge—you pick the adjective—employee practices, e-mail the authors of this article at This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.. Worthwhile submissions may garner a mention on pffc-online.com.

Keep watching the pages of PFFC (including Yolanda Simonsis's editorials) for news about today's labor situation—both the problems and the solutions. It's going to be a hot topic for some time to come.