IEN Radio

Manufacturer Raises Wages to Compete for Employees

September 09, 2021 Eric Sorensen
IEN Radio
Manufacturer Raises Wages to Compete for Employees
Show Notes

Based in New York state, Gear Motions manufactures custom cut and precision ground gears for everything from oil pumps and cars to medical devices. Earlier this month, construction began on the company's new factory in Tonawanda, NY. The plan is to bring the Gear Motions' Buffalo-based Niagara Gear and Oliver Gear divisions together under one roof. 

According to the company, the divisions are currently landlocked, which makes it impossible to expand operations. 

The new 56,000-square-foot facility won't be larger, but the layout will be more efficient and provides room for future expansion. 

Staffing the new facility, however, could be a challenge. In a recent NPR article, Dean Burrows discussed the company's challenges in finding skilled labor. 

During the pandemic, many of Gear Motions' machinists took early retirement. Burrows says that it is difficult to attract talent. He's not just looking for skilled labor; he'll take anyone. He's raised wages by 20% and offered to train up prospective employees. Still, he struggles to find workers, particularly for second shift positions, as he competes with companies like Amazon and McDonalds. 

Burrows has been forced to push orders out or refuse business entirely. He says it's not worth the risk to his reputation if he can't get employees who can produce the product. 

As manufacturers compete for help, companies are getting aggressive. In early August, rubber parts manufacturer Custom Rubber Corp used $879,000 in Paycheck Protection Program (PPP) money to significantly raise wages. On the other side of the coin, Tyson Foods has some 10% of its factory positions unfilled. The problem is causing the company to do five days' work in six. 

Gear Motions plans to start moving into the new facility in January 2022.