An aging population is creating a major labor shortage in the manufacturing industry in America, but innovative employers are finding unique ways to fill the gap.
As of October 2019, the Labor Department reports that there were 7.3 million job openings in America, but only 5.8 million Americans actively seeking work. In other words, there were 1.5 million more open positions than available workers. As the unemployment rate continues to reach record lows—dipping to 3.5% in December—employers are struggling to find the talent they need to spur growth or maintain current business levels.
Many of the unfilled roles are the result of a generation that's aging out of the workforce faster than they can be replaced. In fact, nearly a quarter of the manufacturing industry's employees are over the age of 55—compared to the median age of 39 in the year 2000. An October report by the National Federation of Independent Business (NFIB) confirmed that the shortage is slowing growth "significantly" in manufacturing.
These shortages have a direct impact on a business's ability to expand and grow, explains NFIB Chief Economist William Dunkelberg. "Labor shortages are impacting investment adversely—a new truck, or tractor, or crane is of no value if operators cannot be hired to operate them."
Radwell Attracts Thousands Despite Labor Market
Despite this landscape, one firm is proving how those at the cutting edge of technology and workplace practices can find labor shortage solutions. Radwell International, Inc. operates as a disruptor and innovator committed to growth. In such an environment, people line up for opportunities—even when the rest of the industry is struggling for applicants.
In fact, the organization's senior director of human resources anticipates receiving between 15,000 and 16,000 applications this year—far more than its global workforce of around 1,000 can accommodate. Further, while the median age in the machine manufacturing industry is over 45, according to the Bureau of Labor Statistics, nearly half of Radwell's employees are under the age of 34. As a result, the company is likely to remain relatively immune to the challenges posed by an aging workforce. The company is likely to remain immune to the challenges posed by an aging workforce. Why is Radwell able to attract so many young workers at a time when the industry is struggling to meet workforce demand? It all goes back to the company's roots as an innovator with a strong growth mindset.
In the early days of the Internet, Radwell was among the first in its industry to build an online store—operated through the eBay marketplace. It was a big risk for the company, which buys, sells, and repairs heavy machinery because this type of equipment was rarely sold online in those days.
John Janthor, the vice president of information technology for Radwell, says that the Lumberton, New Jersey-based company was one of the largest resellers on eBay at the time. "eBay actually came out to the town of Lumberton and held a picnic for the whole town, as the Lumberton zip code was the highest-grossing revenue sales for eBay," he says. In fact, the company remains one of eBay's top 50 sellers.
Early Adopter of Innovative Warehouse Technology
The company maintains a deep understanding of the benefits that accompany early adopter status. For example, in 2016, it became only the second employer in the United States to implement the Swisslog Robotic Warehouse System—automation that saves labor by logging and picking items autonomously. "The Swisslog knows where the product is, picks the product, and delivers it right to the picker," Janthor says. "The picker then has an automated conveyor system behind them and is able to put the product in a box, and then it's automatically labeled and sent out the door."
This state-of-the-art robotic picking and palletizing machine, however, is just the tip of the technology iceberg at Radwell. The hardware is supported by a range of software and technology, as well.
The company hosts its new e-commerce website on the cloud, uses business intelligence platforms and artificial intelligence technology, and has a robust data strategy. "We have a strong technology platform at Radwell, and we believe that it’s our competitive advantage—our strategic advantage," Janthor adds. "We consider ourselves a data company."
Radwell Embraces Technology
The Radwell building is a network of technology. "We can identify products, we can route products to our automated robotic systems for picking, we can intelligently identify what items are needed for what types of repairs, and we can use artificial intelligence to identify the categories of items using the neural networks that we're building," Janthor explains.
Together, the hardware and software tools allow the organization to grow and scale its systems and processes while simultaneously helping Radwell attract the tech-savvy, skilled workers it needs to continue growing and innovating.
"Technology is very important to us," explains Mike Vostenak, Radwell's global senior director of human resources. "Technology is very important to us." While it's rare to hear an HR director admit that their organization's recruiting efforts depend on the IT department, Vostenak has a keen sense of why young applicants flock to the company. "They want to stay relevant," he says. "If they're working for a company that's not, then they’ll typically move on."
Vostenak explains that potential hires learn about the company's technology-first, growth mindset from the start of the application process. For example, each position listed on the company's website features a short video outlining what the role is all about.
"I think the younger generation really appreciates that," he says. "Everyone watches videos—it's a YouTube world—and so we've kind of tapped into that, and we're having some really good success with it."
Vostenak adds that since streamlining the online application process, the company had a 30% uptick in applications.
Play at Work Environment
Innovative technology solutions are only one part of the company's appeal. Radwell is equally committed to innovative human resources policies that balance work and play. For example, the company hosts a daily, company-wide trivia game with a $20 cash prize awarded to the first person to get the correct answer. "We've been doing this since 2006, so if you start adding up the numbers, that's almost $70,000 we've given out just on answering a trivia question," Vostenak says.
The company also provides a cafeteria and lounge space that's more video arcade than corporate kitchen. That's because there's an entire gaming area with both table games and big screens where employees can play video games and watch TV throughout the day. "There's a lot of competition over in the gaming area with pool, table tennis, corn hole, and shuffleboard," he adds.
Additionally, Radwell offers a strong mentoring program to facilitate knowledge sharing across generations and ease new employee transitions into the workforce.
Each new employee partners with an industry veteran for their first 30 days on the job. The mentor shows their newest colleague the ropes to help prepare them to continue in the role when the training period ends. The mentor also meets the new employee several days before they arrive on their first day to explain what to expect. "That really eases the anxiety of the new hire," says Vostenak. "We all have anxiety starting a new job with a new company, so this settles them in a bit."
Radwell also offers free tours of its facility to help candidates determine whether the organization is a good fit, as well as summer programs designed to give high school and college students a taste of what the job is like.
"They work on a special project for 10 weeks along with our permanent employees. At the end of the process, they give feedback to senior management about their experience and how well it helped them transition from education to the workforce," Vostenak explains. "The program has worked very well for us, and we've been able to hire some people through the process."
All these practices and processes—from mentorship programs, to automated warehousing technology, to trivia questions and video games—play a key role in fostering and promoting the company's growth mindset and commitment to its customers.
Vostenak believes it's Radwell’s mindset that continues to attract thousands of applicants in a time of labor shortages. All the perks, programs, and technologies are just an extension of the culture. "When people walk into this building, they feel a certain vibe and energy—a pace at which we do things here. All of that is targeted towards growth."
