In the age of work from home, Pennsylvania factories struggle with staffing
Like at many places, business at O’Neal Manufacturing Services in Ambridge picked up last year as the economy reopened and factories were pushed into overdrive.
“It was full bore. More, more, more – we need more. We need to catch up,” Gus Cassida, the factory’s general manager, remembered thinking in January 2021.
“There was tons of pent-up demand,” he said.
O’Neal makes parts for forklifts, cranes, and other heavy equipment. It also makes infrastructure components. This winter, it’s producing steel railings and walkways for the Queensboro Bridge in New York City.
Hiring is a problem for O'Neal and manufacturers across the country. The sector employs approximately 79,000 people in the Pittsburgh area and represents the fourth largest industry in southwestern Pennsylvania as measured by gross regional product.
While the industry struggled long before the pandemic with attracting future workers, the threat has become more urgent with the rise of remote work and the tightening of the labor market.
Cassida said orders dwindled in 2020 when customers scaled back operations and laid off employees in response to COVID-19. “And then 2021 started with a bang, and you had a lot of demand, which created a lot of competitiveness [for workers],” Cassida said.
A year later, there still isn’t enough labor to go around.
“We seem to be in this perpetual need for five to six employees,” Cassida said.
Based in Birmingham, Alabama, O'Neal employs about 100 people at its Ambridge factory about 25 miles outside Pittsburgh. Cassida said the plant usually manages to fill positions, although he noted that now an unusually high number of applicants never shows up for interviews or respond to job offers. Existing workers, meanwhile, are more likely to leave for higher pay, or they stop showing up for their shifts.
Scanning the floor of the company’s 480,000-square-foot facility, Cassida said, “If you see anybody with an orange hat on, that means they’re new employees. So you'll see a lot of orange hats with two guys at one machine because he's actually training right now.”
Constant on-boarding of new employees hurts business, he said. “Right now, we're paying two operators on the same machine. … Even if we are 100-percent efficient, we're only 50 percent because we're paying twice as much labor [and] get only half as much output.”
Still, Cassida said over the last year, he’s hustled more than ever to find new workers. He’s made more visits to trade and tech schools in the area, trying to recruit students. And the plant is advertising jobs all over the place: There’s a large hiring sign posted high on its building that passing motorists can’t miss; the company has spots on the radio and at gas station pump monitors, and it’s considering running ads before the previews at movie theaters.
“Now we're talking about pizza boxes,” Cassida added. “We're going out to all the local pizza … vendors … and [saying,] ‘Hey, can we buy an advertisement? Or we can put our logo and our hiring information on your pizza box?’”
Higher paying jobs in other industries
On the jobs site Indeed, there are twice as many openings in the manufacturing sector as there were right before the pandemic. But interest among applicants hasn’t rebounded like in other industries.
“Really what we've seen during the course of the pandemic … is that job seeker interest has shifted towards jobs that have higher advertised wages and those that are likely to be remote,” said AnnElizabeth Konkel, an economist at Indeed.
“Now, in the case of production and manufacturing,” she continued, “we know that typically those wages are on the lower end of the scale. Often those jobs are simply not possible to do remotely.”
Federal estimates show that average pay in manufacturing lags behind that in other sectors, including transportation and warehousing. But last year, O’Neal raised wages at its Ambridge plant after analyzing industry and regional trends.
Starting pay at the facility has risen from about $15 to roughly $18 an hour, and the company now offers quarterly bonuses for good attendance, according to Cassida, the general manager.
He said that some workers who quit have come back. And Nate Lang, a maintenance technician, said his pay has gone up significantly since he started working at O’Neal almost three years ago with no experience in manufacturing.
“When I walked into the plant, I had never seen one of these machines before,” he remembered. “But they gave me a chance, [and] one of the draws with O'Neal was the promotion from within.”
"The raises were there. They offer several incentives … and I achieve those," he added. "It's provided me opportunities in my life and for my family that I couldn't have … two-and-a-half years ago easily."
Like many factories, however, O'Neal runs round the clock, with overnight and early morning shifts that are sometimes unpredictable.
"It's not easy work. It's tough work," Lang said. "There's been times where I've been here till 9:30, 10 o'clock at night, started 6:00 in the morning … and you stay to get the machine back online because … in our department, that's what's needed."
More people are quitting
A lot of workers won't tolerate those kinds of hours anymore. In fact, manufacturing has experienced a bigger surge in quitting during the pandemic than any other sector. In late 2021, the quit rate in manufacturing had jumped by about 60% over the pre-pandemic baseline.
Like O'Neal, Harbor Steel in New Castle has had to contend with employees who suddenly stop coming to work.
"We had one employee that we hired and seemed like he was really a go-getter," Harbor Steel's owner, Jeff Stitt, said. "So he came to work, worked a day and a half and disappeared. I mean, just went to lunch and never showed up again."
Stitt said his steel fabrication shop typically employed a dozen employees before the pandemic. But one day in late January, it was short by about four workers. And Stitt noted, "There's been times we only have two guys out in the shop during these last two years." He expects to raise his wages after some workers requested higher pay.
But "it makes things a little bit more difficult because then that drives my cost up," he said. "And now if I have to increase my rates [for customers], it makes it more difficult for me to compete against so many other fab shops." Cassida, of O'Neal in Ambridge, noted that factories are also under pressure from the ongoing global supply crunch that has forced up the cost of shipping along with the price of materials such as steel and pallets.
"Just the basic cost of every aspect of our business has gone up," he said. "So yeah, we have to recognize those expenses, and we have to pass those increases on [to the customer]."
Cassida said workers who keep showing up for their shifts also pay a higher price.
"It can get out of hand in a hurry," he said. "Our supervisor team … probably felt the wrath of it more than anybody because their days change significantly when [others call off work]. They may have to jump on a forklift, or they may have to run a crane. Or they may have to run their machine just to make sure we get the product out the door."
Remote work isn't an option
The popularity of remote work presents another challenge for manufacturers because much of their work must be done in person.
"You can't assemble products in your living room," said Renee Shiraishi, chief human resources officer at Acutronic, a motion simulation and aerospace components manufacturer based on Washington's Landing in Pittsburgh.
During the pandemic, Acutronic has mostly recruited for positions such as accountants and engineers – jobs that arguably could be done from home. But Shiraishi said her company avoids remote work because it could create a "two-class system." "We work in manufacturing. We have colleagues that don't have the option to work remotely," she noted.
"If we let people work from home … they're saving that cost of commuting. They're saving on the [work] clothes … So now they're earning more than their colleagues that can't work from home," she said. "It just creates a lot of inequities."
However, in lieu of offering remote work, Shiraishi said Acutronic has a strong employee culture, good benefits, and competitive pay. She said it's up to employers to sell themselves.
"You've got to craft a message to the person that's going to entice them to want to have that conversation, to take the time out of their day, to send you an updated resume, make time to speak to you."
Scott Dietz, director of workforce education initiatives at the nonprofit Catalyst Connection, agrees manufacturers should be aggressive in offering perks such as scheduling flexibility and professional development opportunities.
He said one local manufacturer built a gym for employees at its facility.
"And frankly, our manufacturers that are on the ball with those things aren't really struggling that much to hire, and they're finding talent and attracting folks from other companies," he said.
At Acutronic, Shiraishi said hiring has improved in recent months, and she attributes it in part to high turnover in the labor market.
"I think we definitely benefit from people leaving their old employers because we have a great value proposition," she said.
But Neil Ashbaugh, president and CEO of the Pittsburgh-based workforce development agency New Century Careers, noted that manufacturers on the whole face headwinds that predate the pandemic.
There's been a "continuing movement away from employment by the baby boomer generation," he said. "So if you looked [before the pandemic], we were already under pressure to find, develop, and train the next generation."
And because the pandemic has contributed to a rise in early retirement while also interfering with in-person training for future workers, Ashbaugh said it could push more companies to consider high-tech and robotics solutions.