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HTT · Heat Treat Radio: Heat Treat’s Tight Labor Market: Gaining and Maintaining Works with Josh Hale

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The following transcript has been edited for your reading enjoyment.

Doug Glenn (DG):  I don't think that we've had a non-technical issue that is as important as this one, and that is the labor shortage that is real and that most people believe is going to get only worse over the next several years.  Here to discuss that with us is Josh Hale who is with International Search Partners.  Josh, first off, welcome to Heat Treat Radio.  If you don't mind, if you would give our listeners just a brief background about you, where you come from, and your role in helping people fill roles in the heat treat industry.

Josh Hale (JH):  Yes, for sure.  Thanks for having me, Doug.  I've been recruiting since about 2004, and when I say recruiting, I mean helping different companies identify, hire and engage, and eventually bring on board employees at all various types of levels.  We are International Search Partners.  We are actually founded in 1998, so for over 20 years we've been working pretty exclusively in the heat treat space.  I always kind of say we do about half our business with furnace and other manufacturers, about half with commercial heat treaters and then a mix of stuff tangential to the industry, whether that be forging companies or other kind of industrial manufacturing.  Again, I've been recruiting in personnel, hiring, and job market space for a long time. I came and joined ISP and acquired the company about six or seven years ago now.  ISP has a long history in heat treat, I've got a lot of history in recruiting, and here we are.

DG:  You're in the right business at the right time, I can tell you, because it seems very interesting out there.  I was looking at your website and I've got to deviate a little bit.  So, it's not just you – apparently you've got at least one other person and two canines that are helpful to you, yes?

JH:  Haha, yes!  In fact, one of the canines is here in the room.  If the computer wasn't mounted up I could show him off.

DG:  So, you've got Jessica Maier as one of your helpers?  A partner?

JH:  Yes, exactly.  Jessica works with us.  She's based out of San Diego.  I'm based out of Austin Texas.  We both work remote, working from home.  I've got the weekend vibes with the Hawaiian shirt today.  I don't need to go into the office or anything.  But yes, we work very consistently and tightly together.  Then, there is Jim McNeal, who actually founded our company in 1998.  We jokingly call him "President Emeritus," but with that emeritus status, he works with us on a few select clients here and there.  Then, we've got a rotating group of consultants that we bring on board on more of an ad hoc basis, so we're prepared and able to scale, as necessary, for hot markets like this.  But, the core is me and Jessica, and for smaller industries like heat treat, that works pretty well.

I would be remiss not to mention that we also have a new junior recruiter- Jessica just recently had a baby, so 2-month old Lincoln is practicing to be able to pick up the phone here pretty soon to help us out too.

DG:  Well, at the time of this recording, since we're talking about babies, one of our staff members is actually in the hospital delivering.

JH:  In about 25 years we'll be celebrating the new 40 Under 40 class between them.

DG:  Right, exactly.  And, you know, I should mention that Josh was a member of our 40 Under 40 Class in 2019.

Let's talk about this:  Based on your business, you, probably more than anybody in the heat treat industry, have a good 30,000 foot view of the labor situation.  Is it severe?  How severe is it and what can we say about that at this point?

JH:  I haven't seen anything like this in all my years of recruiting, in or outside of heat treat.  I think it's affecting a lot of industries.  Most of the data points I would reference on this are a little more empirical, but for example, I was in St. Louis for the ASM Heat Treat show a couple weeks ago.  I was just kind of making my rounds and saying “hi” to people as I like to go to these shows to put a face behind a name with people I typically spend time on the phone with or emailing, and everybody was telling me, "Hey, we need help.  Please help me find a candidate.  We need candidates.  Please send us resumes."  That was the consistent theme.  So, there is an empirical data point.

We tend to keep track of our open searches in a fluid way, if you will.  Without getting into the weeds too much, what I mean by that is that we've got clients that come to us with, "Hey, we've got an empty seat, we need to fill it.  Go out there and find somebody."  We've got clients who come and retain our services for really urgent searches, but we actually do quite a lot of business in, what I call, “keeping our eyes open.”  Like, you don't necessarily have an opening but you like to see a good talent when you come across it.  Since I specialize in the industry, I can keep you in mind.  We do a lot of work that way too which is less of an open position and more of a “keep your eyes open” situation.

With that, it's how we work.  Typically, we may have anywhere between 20-30 real open positions and then maybe 50% more on this “keep your eyes open” thing.  Right now, I have probably 50-55 actual open positions.  This is twice as much as normal.  Honestly, in this type of market, this is with me not doing any kind of real outbound efforts to generate new positions because I have too much to work on.  Again, it's kind of empirical- it's not real data driven, but from my experience, I've never seen it like this.

DG:  So, in essence, it is real; I don't think we have to convince anyone of that.  From your perspective, it's pretty nearly doubled the number of open positions that you're actively looking for, and I'm sure there would be a lot of other people in that other category you mentioned about- if you find somebody, let me know.

JH:  And, certainly, there is an opportunity for a lot more open positions if I were to chase after it.  I'm just in a situation where there is so much business right now for existing clients that getting a new client would be difficult.

DG:  Well, after this airs, you might have to hire a third and fourth partner to get things going, because, I can tell you, there's a lot of people looking.

Just anecdotally from our side, myself and my wife just got back from attending the Metal Treating Institute fall meeting this year down in your neck of the woods, down in San Antonio.  To a man, to a company, to a person, everybody was looking for people to work.  It could be in key, higher level management areas as well as shop floor- I need a guy that knows how to load a furnace.

In your company, specifically, very briefly: Are you guys dealing with furnace operator type people or do you tend to deal with more of the engineer/management type folks?

JH:  More of the engineer/management type folks is where we really specialize.  We placed a furnace operator or two in the last couple of years, but it's very rare for us.  But, from talking to customers/clients/people, those hourly production type positions are definitely a situation where companies are struggling.  It's kind of a long way to answer your question but historically we haven't really done a lot of work in that space because at that hourly production level you can hire somebody off the street and train them.  You're not going to necessarily pay my fee to go out there and find that type of person, while in this market, more and more companies are telling me they're willing to pay a fee if we can find somebody, so it's coming up more and more.

DG:  And that is the operative word – if you can find someone, which is not easy.  Obviously, a lot of those jobs tend to be more regional – you can hire people locally, but it is difficult.

I want to delve into causation a bit.  We know we've got a very, very tight labor market, and there are a lot of theories around about why that is.  I'm curious, from your perspective, Josh, what's causing it?  What's the issue here?

JH:  There is a lot of theorization out there.  I could spend hours going down the rabbit hole.  There are some really interesting theories.  In fact, did you listen to the guy speak the keynote at MTI?  He talked a little bit about this idea of men not coming back to the workforce.  I've listened to some of his talks and one thing that he mentions that I really buy into is this idea that the boomer generation had dual incomes, they were working and they really generated a lot of wealth and that wealth now about to get inherited by younger generations.  These younger generations see that and aren't necessarily motivated to work as much.

This is the kind of theory that I would buy into because one of the other aspects that I'm seeing a lot of in the market (and I've heard people pine on in some of the editorials out there) is this idea they call the "YOLO Economy."  The YOLO Economy is, basically, the idea that you only live once.  Now people are coming at this, especially coming out of COVID, like, "I don't want to go back to that job.  I want to try to get the band back together.  I want to go write a novel.  I want to do crafts and they start a little Etsy business and sell those on-line.  I can travel more."  They maybe want to work part-time and travel, especially if they've got some foundation from an inheritance, I see that as a real factor here.

For someone like me, a hardworking, nose-to-the-grindstone kind of guy, this is so hard to put my mindset around, but I hear it come up a lot.  It's like, "Hey, I'm done going into the office 40 hours a week."

DG:  Very, very interesting.  First off, YOLO is great; I hadn't heard that before, so that's helpful.  But, you know, it is interesting the change in psychology, if you will.  It's something only a first world nation, first world economy, which is a lot of the western hemisphere is these days, where there is enough wealth out there that they don't really need to worry about working.  I'm a boomer, right?  I'm on the tail end of the boomers, so yes, double income or whatever, the kids wouldn't necessarily need to worry about working and, if you don't need to work, you don't.  That is the nature of man.

JH:  Another factor that I think has come into play here, speaking of not working (especially COVID affected this): people are retiring earlier.  If you were going to retire in three or four years and then COVID hits, "I might as well do it now," that kind of thing is coming up.  That affects heat treat, especially, as it's kind of an older industry in terms of the core workforce.  We're seeing a lot of that too.  So, people retiring, people not wanting to go back to work- all those factors definitely affect it.  There is a confluence of things.  Like I said, we could go hours going down this rabbit hole – it's really interesting.

DG:  Even things as political as immigration policy are certainly having an effect on the labor market.

Let's move on to this:  What kind of advice would you give, Josh, to companies nowadays who are looking to fill a position, which is, essentially, as we said, pretty much everybody?  From your perspective, what are some of the fundamentals they ought to be thinking about?

JH: The analogy I like to use, when people talk about recruiting or hiring, is the sports team: If you were trying to build out the world's greatest basketball team – just like you're trying to build out the world's greatest heat treat or the world's greatest furnace OEM – if you're going to try to do that, you want the best people to try out for your team.

If you take this analogy down further, when you're trying to build the world's best basketball team, you're not going to hope that LeBron James applies to join your team.  You're going to go out there and tap him on the shoulder and say, "Hey, my team's really good.  Come and join us.  We're a championship squad."  You need to take that proactive recruiting approach.  That's part of the services that obviously our company offers; we specialize in this, we're in this day in and day out, and we're building up this bench of people to go out there and proactively recruit, again, not coming in and applying to a job.

But you can do that if you have your own company too.  I would advise anybody who owns a business or is managing a business to have a good pipeline of people at the ready all the time.  It's easy to get comfortable – I've got my team, I've got my department set up.  It's not going to be like that a lot.  Somebody like me might go in there and pull somebody away.

DG:  You're not doing yourself any favors with that, Josh.

JH:  Well, you know, if it happens, I always tell people, you can either be a client or you can be a source, one or the other.  But yes, somebody might retire, somebody might take that YOLO philosophy and leave.  So, you should always have that bench going, always continually be networking.  I tell people, too, you don't want to be afraid to “top-grade”: If you do have the opportunity to bring somebody in who's maybe better than the existing person, that can help you and your team and can build up the morale and the overall core a little bit better.

DG:  What do you mean by that?  Are you suggesting you replace a person with whom you are currently happy with somebody who’s better, or just hire them in addition to that person?

JH:  If you can hire in addition to is the best solution because it widens your bench a little bit, to use the sports team analogy, if you can replace your starter, put your starter on the bench, and have a great guy who can come in and pinch hit or whatever, that helps a lot.

So just have that kind of philosophy.  It's kind of a forward thinking philosophy, it's a proactive-type philosophy.  I think that's the biggest thing.  You can't wait until someone gives notice and leaves, now you've got an empty seat and now you’re struggling and your hair is on fire.  You really need to do this constantly.  That's my biggest piece of advice.

The other bullet point that comes up when I think about this, (and there are people out there that don't want to hear it), but you really need to kind of loosen your requirements a little bit.  People come to me saying, "Hey, I've got an opening.  We need to have XYZ on the resume and everything else."  And I say, "Look, that person you're looking for just doesn't exist."  You've got to be a little more realistic in your requirements and hopefully that will help attract the right people.

DG:  Once they've got that person in house, one of the other big concerns here is they can gain the right people, but how do you maintain them?  What type of advice would you give companies for keeping good workers?

JH:  Again, it goes back to the idea of trying to be a little more forward thinking.  I think COVID shifted a lot of things.  I've seen a lot of stats.  More and more people are allowing people to work from home.  That's not always possible in the heat treat or commercial manufacturing type environment, but if it is possible to spend a day at home doing some CAD drawings, let them do that.  That engages them more and makes them feel more at home.

Being creative with some of the compensation.  More and more companies are paying more and more.  I think wages are going to generally increase.  But, at the end of the day, the market is the market, so I don't expect anybody to overpay just to hire somebody.  There are other creative ways of compensation.  Vacation is a big one, some work-life balance. . .  There are types of benefits.  Those kinds of things go a long way.

And then, too, trying to have good morale.  Morale is kind of a cliche word, but I think it carries a lot of weight.  It gives you a reputation in the market as a place that you want to work for.  I've heard it said that people like to work for, basically, three things:  autonomy, purpose, and mastery.  Get somebody in there and give them those things.  Give them some opportunity to work and 'do their thing' with that autonomous nature, not being micromanaged.  Give them some ability to be trained to grow and develop to create that mastery.  And, if you can get them on there for a bigger purpose, that really helps a lot too.  People don't want to be just a cog in the system.  If they know they're contributing to, whatever it is, growth or more market share or new R&D development, these kinds of things.  If they're contributing to something bigger, that's going to keep them on board and it's going to keep them passionate about it and it's going to probably help them maybe think they want to bring their friends into the fold.  That's another great way to hire- the internal referral program.

DG:  Have you seen, over the time you've been doing this, the motivation for people who want to work change?  I know the guys you were talking about, the fellow who gave the presentation at the most recent MTI meeting, they talked about the differences in the generations- the boomers, the X, the Y, the millennials, whatever.  Have you seen tangible evidence of a shift in the motivation of what really does engage the different age groups?

JH:  I'm going to answer that a couple different ways.  At the end of the day, nobody is working for free.  Salary is a consistent hot bun for anybody looking to make a move.  But I have seen, and a lot of people tell me, that one of their reasons they are looking to leave their company is stagnation.  So, I talk about that kind of overall purpose.  A lot of people I talk to are saying, "The company I'm with has been doing the same thing in the same way for 50 years and I'm interested in making some upgrades."  I can't tell you how many times I've placed a candidate.  I ask everybody I work with, "Why are looking to make a move?  Why would you consider leaving your current company?"  One of the consistent answers I get is, "Well, you know, I made a suggestion for an improvement and my boss told me that we're not going to do that.  I know it's going to make an impact and they're not letting me."  Having that, again, forward thinking, engaged employees, try their ideas out, be willing to invest in new technology.  If you've still got microfiche in your company, you're doing something wrong.

DG:  For those of you who don't know what that is, you better Google that one: microfiche.

JH:  But I am serious.  Move on to the touchscreen computers or the iPads.  People are still doing stuff in triplicate in field service reports and things like this.  People want to work for technologically advanced company that they can feel good about.

DG:  I'm going to see if you know this one:  I was telling somebody the other day, I said, "I still remember when I was in school using a mimeograph machine."  I don't know if you know what that one is.

JH:  I don't think I've heard of that!

DG:  That was the way before Xerox machines.  When you did hard copies, you put this thing on a drum and you basically turn it and it would crank out copies in blue.  Anyhow, it's an old time one.

Let's move from the company’s perspective of advice to help a company who's looking to hire someone to just talking to the individual who might be in a position that you just talked about or maybe some other motivation like, "You know what?  It's time for me to move."  They need to make a move for whatever the reason might be.  Is there any advice you can give those people for entering a labor market?  Obviously, it's a job seeker's market, right?

JH:  I'd say a couple things:  One, my first piece of advice is, as you said, it is a job seeker's market.  But it's now.  This is not a job seeker's market forever.

Strike while the iron is hot.  If you have any potential idea or any inkling that maybe there is something better out there for you, I'm of the opinion, nothing ventured, nothing gained.  I use the idea of big mistake, small mistake.  It would be a big mistake to pass on the opportunity to land your dream job, but the small mistake to spend 30 minutes on a phone interview with a company.  I would encourage somebody to talk to anybody, to put those feelers out there, have those initial phone interviews.

Now, when you get down the process of an interview, if you decide you don't want to work for the company, you don't want to waste people's time, but for an initial phone interview, sending a resume off, it is truly nothing ventured, nothing gained.  It's a big mistake to miss an opportunity but a little mistake to not even try.  I would definitely encourage that.

Also, if people are really looking out for their career, if at all possible, opening up the geography helps a lot.  I know for some people that's just not possible, but if you could be just a little bit more bold in looking at some potential different regions/areas, that definitely opens up the door for a lot more potential.

People ask for my advice that are looking for the next step.  People have in their mind this idea that their career progression is going to be on a linear upgrade.  I tell people it's not always going to be like that.  If you think of it more like a step up, across, up, across – with that visual – I think it sometimes helps people.  What you're going to want to do is leverage your current skills to get to that next company that can then catapult you up a bit.  But it's not necessarily going to be going from engineer to engineering manager; it might be going from engineer to senior engineer with opportunity to move to engineering manager.

Be realistic in some of those expectations and not being afraid to utilize your skill set and leverage that to a new company.  I hear a lot of times people saying, "Well, I've been an engineer for 10 years.  I'm kind of bored with it.  I don't want to do CAD drawings anymore."  And I say, "But you're really good at that and that's in demand right now.  Maybe get with a company where you can do 80% CAD instead of 100% CAD and spend 20% of your time on projects you like."  You kind of step up instead of just going linear with the growth.

DG:  What do you say to those people, (some might call them naysayers, others might call them very pragmatic people), who say, "Well the grass is always greener."  What do you say to those folks who are kind of discouraging employees from looking at something else because, "You're going to go over to that company and it's not going to be what you thought it was.”

JH:  There is certainly some validity to that.  But, also, like I said, it's kind of a nothing ventured, nothing gained situation.  I think that people who have really successful careers are bold, and they take some of these risks.  Also, you've got to look at it on a case by case basis.  There has been many a time when I've talked to somebody who's had a jumpy work history and maybe has had that "grass is greener" mentality a little too often.  I've told them, "Look, you should probably get a couple years under your belt before you talk to me."

There are cases where that makes sense, but I think especially in heat treat, I've seen a lot of people that have been stable, they stay at their company a long time.  If you've been with your company, especially going on the 10 year mark, it's kind of time to think about it.  I'd say between 7-12 years, you've got to start thinking, "Are you going to retire at the company you are at now or are you going to start to make a move?"  There is the opposite of being too jumpy and that's being too stable.  Sometimes people look at someone like, "You've been with only one company for 30 years?  You're not going to learn our ways."

There is kind of a happy medium there.  Like I said, I'd tell people, look, be bold.  Don't be afraid to take risks.  This is a good market, and your skills are in demand.  If you land with the wrong company, you'll find something else.  It's not that big of a risk.  But, when you're going through the interview process, ask a lot of questions.  The candidate is interviewing the company as much as the company is interviewing the candidate.

DG:  It's a scary thing to change jobs.  I've heard statistics say that the one thing that frightens people more than public speaking is losing their job.

Now you mentioned, one of your first pieces of advice for potential job seekers was strike while the iron is hot.  This is the time.  You mentioned it's not going to last forever.  How long do you think this tight labor market is going to be around?  What's you prognostication here?

JH:  For my business, I hope forever.  But, seriously, I don't think so.  These things are cyclical.  I would say that we've probably got at least another 2-3 years that it's going to be like this.  And then we'll probably see the broader economy start to shift at that time.  I think, too, it's going to depend a little bit on how our industry is affected, specifically.  There are some political implications.  I think COVID helped quite a bit in bringing some of the manufacturing on shore, which I've read about in Heat Treat Today a couple of times.  There are some things in our industry that might make it even tighter for longer.

I think, too, and maybe you have some comments on this, Doug, from the MTI meeting [in October 2021], but there seems to be a little bit of resistance in heat treat to get with some technology that can bring in some robotics and things of this nature, that would probably help with the labor market, but I think in our industry and specifics, it doesn't go that way as fast as some other industries.

DG:  I think that's true.  I was listening to those conversations when they were talking about the introduction of robotics. To me, my initial thought was, "Well that's easy.  Robotics are easy if you've got high volume, low variable production."  In other words, you're running a lot of the same part.  Especially with commercial heat treating, which is not necessarily a large portion of the audience that we have, a lot of what we have are the captive heat treater, but, especially in the commercial heat treat world, you're dealing with basically a job shop which is very hard to automate.

But, with our more typical listener/reader with the captive heat treat shops, there is the opportunity for that and those things could, definitely, make a difference in the labor market.  Yes, it's important.  I think those people will move in that direction.  I think we all will, the more comfortable we become with automation and artificial intelligence and things like that, the more we'll move in that direction.

This has been good.  Is there anything else?  I always like to ask the question just in case there is anything that has popped to your mind that you think would be helpful to our listeners.  Anything else you would want to add?

JH:  It's a really interesting time right now.  I don't know that I'd add anything than what we've talked about.  There is a lot of speculation out there.  There are a lot of interesting analyses about what's happening.  Like I said, it could be a rabbit hole we spend a lot of time going down.  But, for sure, if there is anybody thinking there is even a potential opportunity, I'd strike now while the iron's hot.  And, for companies looking to hire, I would get creative and try to be proactive and reach out to people and try to have that bench of candidates and try to think about how you can loosen your requirements, whether it be in-house training or maybe have somebody who hits 8 out or 10 bullet points you want instead of 10 out 10, that helps a lot.

For more information, contact Josh Hale:

internationalsearchpartners.net

https://www.linkedin.com/in/joshhale/

joshh@internationalsearchpartners.net

 

 

 

 

 

 

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