Manufacturing

The past year for manufacturers in the region reflected many of the successes and challenges of companies around the world, the vast majority of them a result of the pandemic. Looking forward to 2024, CEOs agree the manufacturing landscape will look similar to 2023 but with many more reasons to be hopeful. In a recent survey conducted by the National Association of Manufacturers (NAM), almost three-quarters of surveyed manufacturing executives think that attracting and retaining a quality workforce is their primary business challenge. George Hansel, co-owner and vice president of Filtrine in Keene, which manufactures custom drinking water systems and products, said in a recent interview that finding skilled labor continues to be the company's greatest issue. "We have three or four times as many resources into recruiting as we did pre-COVID," he said. "We've just barely been able to hire new people. The aging workforce in the region is a real problem. We need to attract more people to this area and give them a path forward. More people are retiring every year; we're one of the fastest aging states in the country, and our workforce is shrinking. No one realizes the desperate situation we're in. It's something we're going to be focused on for the foreseeable future." Hansel, also the founder of the Keene Manufacturers Consortium, is one of several manufacturers in the area to be proactive about building and "upskilling" the talent pipeline by focusing on internships and apprenticeships and partnering with local educational institutions. An initiative through the Consortium with ApprenticeshipNH and the Keene school district (SAU 29) is a two-year pre-apprenticeship program that will be open to the broader community starting in January. Filtrine has an existing welding apprenticeship program. "It will lay the foundation for people to get into manufacturing, learning basic skills like blueprint reading to help with [landing] traditional apprenticeships at local manufacturers," Hansel said. "It's how to train the next generation of workers to maintain the incredible tradition of manufacturing in Southwest New Hampshire." Labor challenges resonate with Matthew O'Connell, CEO and president of G.S. Precision, which manufactures components for the aerospace and defense industries, in Brattleboro. "People aren't aware of what it takes to do skilled engineering trades," he said, adding that G.S. Precision has its own educational institution — the GSP School of Manufacturing Technology. The 60-plus-year-old company has always worked to raise awareness regarding opportunities for exciting roles in space industry technology. "(Employee) retention is a huge problem," he said, "but if you build skills, it translates into career growth." Emily Schwerin-Whyte, co-CEO of Badger in Gilsum, a body-care product manufacturer, said the company experienced employee turnover during the pandemic and in the months that followed, but at a much lower rate than the national average. The company's focus on employee- and family-friendly policies, such as paid family medical leave, flexible work hours and health-care coverage, helped with retention, Schwerin-Whyte wrote in an email. "Our people-centered business model has helped us attract and retain excellent staff while supporting the well-being of our community and keeping us competitive and successful into second-generation family leadership." Another pandemic-caused hot-button issue for manufacturers is supply chain. While there has been a notable improvement in the average lead time for production materials, company heads say it has not returned to pre-pandemic levels. "There's a backlog, and materials are coming later," said O'Connell, speaking specifically about alloys that serve aerospace markets. "It puts constraints on labor. It requires more people." Badger experienced significant delays in materials and replacement parts for manufacturing equipment during the pandemic. "We mitigated those delays with a more aggressive purchasing strategy to ensure we stayed in stock, and we have seen many improvements in material lead-time in 2023," Schwerin-Whyte wrote. "Following on the supply chain delays, high inflation in 2022, and continuing into 2023, significantly impacted the cost of materials. While inflation has improved over 2023, the cost of goods has remained high." As significant a crisis as recruiting and retaining a skilled workforce is securing housing for that workforce. "Availability of quality, affordable childcare and housing continues to be a challenge for our employees and was certainly a factor in employee retention," wrote Schwerin-Whyte. Hansel listed the housing crisis as a key issue for his company and also pointed out there are 50,000 fewer housing units than there should be across the country. "We're going to lose this great economy we've tried to build," he said. "We have to be constantly pushing to be more aggressive. The silver lining is that the biggest change comes during crisis." Cody Morrison is executive director of the Monadnock Economic Development Corp., which focuses on addressing issues that impact the workforce. He lists lack of child-care options as an issue going hand-in-hand with the housing crisis in 2023 and predicts it will be the same in 2024. "It's bottlenecking workforce recruitment and retention," he said. "There are stories of employees driving to Winchester from Keene to find an open child-care slot. Many child-care facilities have waitlists, and people need to get on a registry before looking for child care." To offset the lack of options for families, MEDC helped launch an initiative, The Bringing it Home Project, which creates and expands family-based child-care centers by giving in-home providers training they need while also providing licensure, consulting and money for housing rehabilitation. "There are 35 new child-care slots being created as a result of this initiative," said Morrison. Badger offers assistance via its Babies at Work program, which allows new parents after three months of family leave to bring their infants to the workplace until they are 6 months old. Overall, Morrison noticed a continued trend in 2023 of a pandemic-inspired resurgence in domestic manufacturing. "Local companies are doing well," he said. "They are busy; they are ordering; there are waitlists and generous lead times for materials; people are in search of bigger manufacturing space. It's the sign of a good economy; it's what most people want to see." At the same time, because companies need more manufacturing space, the real estate market is tight, and he sees that continuing into 2024. "It's another bottleneck that's holding back some companies," he said. O'Connell's business is thriving. One way it is meeting the demand is through the introduction of "cobots," which can work with skilled talent and help them improve. A cobot, or collaborative robot, is a robot intended for direct human-robot interaction. "What we're facing in 2024 is good news," he said. Badger saw healthy sales growth this year, during which the company rebranded its baby product line and launched two new products in the third quarter. "We will continue to navigate a successful rebrand of the Company and its product lines while working on new production innovations that we are excited to share in 2024 and beyond," wrote Schwerin-Whyte.