November, 2011

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Archway
Banner Engineering Corp
Bell Manufacturing & Services
Bose Corporation ESG
Boston Scientific
Carl Zeiss Industrial Metrology
Circuit Check Inc.
Coloplast
Denarius Human Resources
Dynamic Sealing Technologies
Endpoint Solutions Inc
FMS Corporation
Great River Energy
HID Global
Hockenberg Search
Integris Group
Intek Plastics Inc
Juno Inc
King Solutions
Lexington
Marken Mfg.
Mate Precision Tooling
Medtronic Inc
Metro Mold & Design
Michael Keyes
Midwest Rubber
Navy Island Plywood
Neometrics Inc
Nystrom Inc
Orange Tree Employment Screening
Quali Tech, Inc.
Quality Tech Services
Robin Lindorfer
Robinson Rubber Products Company
Standard Iron & Wire Works
Stratasys Inc
SunOpta Ingredients Group
Synovis Surgical Innovations
TEAM Industries
Travel Tags
TSI Incorporated
Uponor
Vascular Solutions


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Article Index

MN Economic Outlook
Article by: Dr. Ernest Goss

The Minnesota Business Conditions Index, a leading economic indicator from a monthly survey of supply managers, was above growth neutral for the 27th straight month at 55.4, up slightly from 55.3 in September.


Tips for Effectively Dealing with Current Business Environment
Article by: Chuck Lindberg

We are living in challenging times! Every day there is something related to compensation in the media. From general economic news and specific trends in manufacturing, to changes in wages and benefits. With all this going on, companies still have a fundamental need to retain and / or attract employees with the skills needed. What exactly is going on these days?


Passion and Pride at Pentair
Article by: Mike Bauman

I’ll begin with a well-traveled story that I’m sure you will recognize. The words change a little depending on who is telling the story, but the message remains the same.


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MN Economic Outlook

The Minnesota Business Conditions Index, a leading economic indicator from a monthly survey of supply managers, was above growth neutral for the 27th straight month at 55.4, up slightly from 55.3 in September.

Components of the index for October were new orders at 49.9, production or sales at 55.6, delivery lead time at 61.9, inventories at 55.6 and employment at 54.2. Growth among durable-goods producers is outpacing that of nondurable goods manufacturers.  For example, higher agricultural commodity prices have reduced economic activity in the state's large food-processing sector while health care expansions have pushed medical equipment manufacturers in the state to higher growth and profitability.  Growth will continue to be positive with jobs added at a slow pace over the next 3 to 6 months. said Goss.

Dr. Ernest Goss of Creighton University, used the same methodology as The National Association of Purchasing Management to compile this information. An index number greater than 50 percent indicates an expansionary economy, and an index under 50 percent forecast a sluggish economy, for the next three to six months.

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Tips for Effectively Dealing with Current Business Environment

We are living in challenging times! Every day there is something related to compensation in the media. From general economic news and specific trends in manufacturing, to changes in wages and benefits. With all this going on, companies still have a fundamental need to retain and / or attract employees with the skills needed. What exactly is going on these days?

  • Demand for U.S. products and services is decreasing and manufacturing is slowing down. Minnesota lost about 100,000 manufacturing jobs in the past decade while adding about the same number of jobs in healthcare and social services. Growing industries include computers and electronics, petroleum and coal, food and tobacco, minerals and metals, fabricated metal, paper products and machinery. Shrinking industries are plastics and rubber, chemicals, apparel and leather, printing, electrical equipment appliances and miscellaneous products. (Star Tribune, November, 2011.)
  • SAT scores of high school students (standardized test for college admissions) fell in all three areas of math, reading and writing. Companies are feeling the impact of this as “skyrocketing remediation rates at community colleges are evidence of a real skills gap. If students can’t do college-level work, how can they succeed in the work force?” (Wall Street Journal, October & November, 2011.)
  • Median household income dropped for the third year in a row (when adjusted for inflation). It is about the same as 1996 and 7.1% below the peak in 1999: $49,445 in 2010 and $49,112 in 1996. (Wall Street Journal, October, 2011)
  • Some labor markets are faring better than others. Consider the “boom” in the North Dakota oil fields. Workers at McDonald’s are making $15 per hour; truck drivers $80,000 per year (CNN Monday, October, 2011.)
  • Small and medium sized companies are driving any job growth observed. In October 2011, 110,000 jobs were added to payroll (as tracked by ADP). Of these jobs, 58,000 came from small businesses (with 0-49 employees) and 53,000 from medium-sized companies (with 50-500 employees). Large companies actually shed employees. It is possible this trend will reverse in the near future as small to medium-sized companies grow more concerned about the economy. (Wall Street Journal, November, 2011.)
  • Companies are reinstating 401(k) contributions. In a recent Towers Watson study, 74% of companies surveyed said that they would resume contributions to previous levels; most companies match 3% of pay. Why are companies doing this? They want to help employees save for retirement. Some employees are staying because they have to, not because they want to. Ultimately companies want employees who want to be there. (Yahoo Finance, November, 2011.)

Considering current trends, what can Minnesota manufacturers do regarding their own employees and compensation matters? Following are a few suggestions. Whatever you decide as your next step, there are resources and strategies to help you execute.

  • Keep abreast of local pay trends and adjust your pay practices as needed to remain competitive. One resource on the horizon is the 2012 Manufacturing Compensation & Benefits Survey conducted by Manufacturers Alliance and MPMA. Surveys are a good source for going rates of pay and information on benefit program designs. This survey also has a section on business challenges specific to MN manufacturers and what companies are doing to address them.
  • Evaluate training programs and/or succession plans. If you can’t hire (“buy”) the skills you need, consider how best to “build” the necessary skills internally – either on your own or in collaboration with others.
  • Review your benefits packages. What changes could you make to attract and retain employees while remaining competitive and dealing with any financial constraints?
  • Consider that not all retention issues are pay related (“good” employees leaving; less desirable employees staying). There are other factors which make your company a great place to work. Do your supervisors and managers manage effectively? Does your company have “fun” at work? 
Chuck Lindberg is President of Denarius Human Resources Inc. and may be reached at (651)482-8606. Learn more about Denarius Human Resources at - www.denariusinc.com

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Passion and Pride at Pentair

I’ll begin with a well-traveled story that I’m sure you will recognize. The words change a little depending on who is telling the story, but the message remains the same.

On behalf of the talented Tech Products Team, this is how we “took the message of the story to heart”, and pumped-up the passion and pride in our business.

Imagine a construction-sight; complete with, cranes, heavy equipment and people. -  I want to know what they are doing. - I’m curious. - I see three people, who are working in the same area, and appear to be doing about the same things. I approach the first person, smile and ask “what are you doing here?”

The person looks up and says, “I’m making twenty-three dollars an hour; that’s what I’m doing”.  The person’s response is probably the truth; but – Did I mention I’m curious? – I move on to the next person in the area, and ask the same question. This person says, “I’m a stone-cutter, and I’m busting rocks”. Once again, the answer appears to be honest, as well as describe the task at hand. I then approach the third person and repeat the same question (What are you doing here?). This person smiles and says, “Along with my team-mates, we are building a Temple!”

The question we need to ask ourselves is, “Are we building Temples in our businesses, or are we just busting rocks?!”

Now, I am going to provide you “true-to-life” examples of how Tech Products People connected with this message, and began to routinely build Temples instead of “just bending metal” in our businesses.

  • Senior Leadership walks the shop floor to observe, listen, answer “what and why” questions and to thank people for their understanding and contributions. (First-names are frequently heard throughout these conversations.)
  • When asked, “What are you doing?” a person with thirty years of service responds, “I’m working for Homeland Security today. These enclosures will help identify dirty-bombs, and keep those terrorists out of our country!”
  • Another long service person responds to the same question by saying, “Let’s check the hour-by-hour chart; we promised 240 boxes would ship from our line today. We are on track to keep that promise, and we will stay for overtime if needed to get them out.”

We are not just bending metal here”

  • A Sales Representative from Houston calls the Minnesota Plant(Headquarters) shortly after Hurricane Katrina and says, “ There are many small towns in the Gulf without electrical power; people just want the power back on so they can turn-on the lights, feed their kids and have their lives back. The message spread quickly throughout the manufacturing area, and the volunteer over-time list filled up immediately. People wanted to help their neighbors (fellow citizens).
  • When we put the “face of our customer” on our products, people realize that we are not just making grey, six-sided steel boxes. We are keeping promises to real-people. (Disney World is filled with push-button Enclosures that help kids have a safe and fun ride.)

Final Thoughts:

  • Our business isn’t populated with a group of clones who are perfectly in sync with each other. We are a team-in transition; we are a community of people who learn together everyday, but many of our team members are in the early stages of understanding, trusting and fully embracing our evolving business culture. Margaret Mead reminds us that: “A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.” It’s incumbent on us to reach out to all of our team members, and be the catalyst for positive change in our business.
  •  Passion-Thrives in a Win-Right organization; - People want to (build Temples) do great things!  Mindless Work (Busting rocks) is no fun! Pump-up your organizational passion by engaging the heads, hearts, hands and the souls of the people who live in your business! 

 

Thank you if you participated in our recent training survey! As a result of your requests we will be offering more workshops and monthly educational programs targeted towards HR professionals. The new series will include Core Training for New Employees and our upcoming program on Filling the Talent Gaps.

Working with people in transition has been his life’s work. Mike has had “the time of his life” listening, learning and helping people who are struggling with organizational change, career transitions, and life choices. With over 30 years of HR Leadership experience in manufacturing environments, Mike has a deep and practical understanding of the continuous improvement journey

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