Chicago's Freedman Seating is over 120 years old but growing like an adolescent. As with a teenager, its growth spurt is creating some unwelcome problems, among them, finding the workers it needs to keep its growth, and profitability, on track.
"It has been very difficult to find employees and retain them," said Craig Freedman, president of the maker of bus and truck seats.
Freedman said there is a bidding war for these workers. He said his company, whose clients include Greyhound, UPS and the Chicago Transit System, not only competes for employees with other small manufacturers but with multinational corporations in Chicago that have far greater resources than his company.
The workers Freedman is referring to are skilled: welders and workers who can operate the computer-guided machines and other high tech equipment found at most manufacturers these days. Freedman is hardly the only company affected by the skilled labor shortage, according to the Manufacturing Institute: 74 percent of all U.S. manufacturers say the shortage is hurting their ability to expand.
As the company's sprawling 400,000-square-foot factory on Chicago's west side attests, a lack of skilled workers has not hurt Freedman Seating's expansion so much as it is impacting its bottom line.
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"Over the past 10 years, we've averaged about 10 percent compounded growth per year," said Freedman. "We have to use a lot of overtime to get the work done. We have to outsource a fair amount of work that we don't have the capacity to do because we don't have the skilled labor to do it. And of course it's more expensive when we send the work outside the company."
Freedman Seating's recent growth is tied to a decision to make seats for buses, along with those it makes for delivery trucks.
To meet demand, it hired 100 workers last year, pushing its payrolls to 600. With 2014 expected to be a record year, it is adding a dozen more jobs now and 15 to 20 workers by year end. That is, if it can find them.
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Entry level workers at most skilled jobs will earn $12 to $15 an hour, said Freedman. Workers who prove to be skilled machinists can make $20 to $25 an hour. The company also offers paid vacations, a 401(k) plan with a generous match and health care.
The great grandson of company founder Hyman Freedman, Freedman is finding some new employees thanks to two sources: a retraining program Freedman has tapped for years to keep its workforce up to date, and more recently, a nearby high school that is working with area manufacturers to train students in the skills these companies need.
Freedman Seating's relationship with the Jane Addams Resource Corp, goes back 20 years. It has used the program to retrain incumbent employees, and more recently has been hiring from its Careers in Manufacturing Program
"Part of our model is that we want to target industries that pay families living wages and benefits and that offer authentic career paths," said Guy Loudon, Addams' executive director.