People in Production Podcast with Ryan Nelson
Join host Ryan Nelson as he explores the DNA of thriving manufacturing operations. As founder of Circle of 5, Ryan delves deep into how successful organizations build high-performing teams and create empowering cultures that drive excellence.
Each episode features dynamic conversations with manufacturing leaders and cross-industry innovators, uncovering strategies for talent development, organizational growth, and future-focused leadership. Whether you're a manufacturing executive, team leader, or passionate about building strong workplace cultures, this podcast delivers practical insights to transform your organization.
The Kansas City Chapter of NTMA and Circle of 5 present this exclusive series starting January 2025. Subscribe now to learn how today's visionaries are reshaping the future of manufacturing and organizational excellence.
People in Production Podcast with Ryan Nelson
Episode 7 - Ryan Borgerding: From Machines to People The Future of Manufacturing (Part 2)
The conversation revolves around the critical need for manufacturing companies to shift their focus from hiring for immediate needs toward investing in employees' long-term careers. By recognizing the value of character over traditional skills, bridging gaps between management and operational realities, and developing leadership, firms can foster talent retention and build thriving teams.
• The need for quality talent over mere numbers
• Importance of transferable skills from other industries
• The disconnect between executive goals and floor realities
• Necessity of leadership training for successful management
• Creating clear career pathways enhances employee retention
• Financial costs associated with employee turnover
• Call for equal investment in people and machinery
All right. So you just finished stating something that I think is so critical for us that we're struggling with quality of talent, not just bodies, and I was recently talking with a shop owner and their leadership and what I discovered is that a couple of members of their leadership have only been in their roles for between two and four years and they moved to leadership roles. And I just asked if you could be confident that a hire could become what you are two to four years into your career. Would you be more confident in making hires moving forward? And they're like, oh, we'd be thrilled with that.
Speaker 1:We just haven't found that yet, and as I continue to unpack that with people, what I discovered is they didn't necessarily come from the trades background. One of them was a server in a restaurant and the other one worked in garages and stuff like that, but got into the trades. So to your point about the talent sometimes I wonder if we can be more intentional about finding the signature characteristics that apply to quality machining or quality manufacturing the way we need it to. If we can hone in on those skill sets, then we can probably explore outside of the manufacturing industry and find talent that's going to achieve what we want it to achieve. What's your thoughts on that?
Speaker 2:I couldn't agree more. I mean it's, there's a certain I don't want to say mentality, but you know, just know how that comes naturally from a mechanical perspective, and I say that confidently because I comes naturally from a mechanical perspective, and I say that confidently because I don't have a mechanical bone in my body.
Speaker 2:You know, like I understand how all this stuff works, but to actually do it myself, like my hands just don't work in that way, my mind just doesn't work in that way, right. So it's really that mechanical aptitude that again, I think is more of a innate and kind of natural thing that you know people pick up on earlier in their lives from being exposed to that.
Speaker 2:And you know you find that a lot with people that had you know parents or family members or friends or whatever it may be that they're exposed to at a young age that you know were doing all their own home improvement work and doing all their own, you know work on their cars and you know that, were involved in and engaged with it early on and, and you know, just have a general knack for the understanding of the way things work. You know, um, I was thinking that show like how it's made, you know like it's like there's, there's, there's the people that you know already know how it's made.
Speaker 1:Yeah yeah, some people look at that and say, of course. And others of us are staring at it thinking how did they do that?
Speaker 2:And you know they're for the longest time for us right, like companies aren't going to pay us a hefty fee to, you know, to recommend them. You know somebody that works in food service. You know, like they're only going to be interested in people that have directly related skills from you know, professional work and experience that they can put on a resume Right, and so naturally that that, you know, led to us, you know, not taking the time to have those conversations with folks that didn't have that. You know those those things on their resume already. But, you know, as things have, things have, you know gotten tighter, I should say, in the labor market.
Speaker 2:You know it's forced us to think outside the box and, you know, start having conversations with just about anybody and everybody right. And we have found a lot of success, especially here after, like, the post-pandemic hiring craze that went on. That was really the thing that forced a lot of companies to start getting creative and you know, that's when we started calling on a lot of people that we wouldn't have previously.
Speaker 2:And we've made a number of successful placements, you know, a few of which that you know I hold in high regard, that you know are folks that never would have gotten a look for these positions and prior years that have excelled and and you know their roles, and so it's I totally agree with that Like kind of need to get we need to get away from that, you know mentality of like we, we, we need to see this experience proven in somebody before we're going to give them, give them a shot, and you know about, like, what are those? What are those base building blocks that are really necessary to, you know to, to create a successful, you know, employee machinist, whatever it may be so let me, I'm going to put this out there and this is going to rub some people the wrong way, and I'm okay with that.
Speaker 1:Um, whether you are a company of three people or a company of 3,000 people, I think what most of us are making a mistake in this industry with is that we are hiring people for a job and we are not hiring people for a career, and we are so busy just trying to plug holes in the ship that's sinking that we're throwing people in and we haven't created a pathway to say you know what?
Speaker 1:This is the entry point and the opportunities for you to grow. Look like this In fact, we will provide training to people who are here for so long that's going to make them eligible to be a supervisor in the future, and we're going to invest in you and cause you to grow. And we get so tunnel visioned on looking at a skill set and we never think about what this person needs as a vision for their future, not just a paycheck today. And if we're hiring for people who just want a paycheck today, we're going to lose those people when they can get a bigger paycheck someplace else, and I think that's one of the missing links that organizations aren't thinking enough about their future to hire people to careers. They're just hiring to jobs. What do you think about that?
Speaker 2:I couldn't agree more. And I mean it's, it's got a. There's a perpetual nature to that right. Like when you're, when when you're hiring bodies just to fulfill, you know, solve short-term problems and fulfill short-term needs. Like you're hiring bodies just to fulfill, you know, solve short-term problems and fulfill short-term needs, like you're going to just continue chasing your tail right, like that body's going to leave and then you're going to need another and it's just going to be a there's a cyclical nature to it, right. And how are you to grow as an organization if you're just constantly chasing your tail right? And so I totally agree from that standpoint. Like your tail right. And so I I totally agree from that standpoint. Like I think you know, if I'm, if I'm the business owner, if I'm the shop owner, you know I I would intentionally slow the growth you know intentionally turn down.
Speaker 2:you know, you know potential orders um to, to put more of an emphasis into, into specifically, and by that I mean hiring creating an environment and an opportunity that is more of a career than just a job.
Speaker 1:So what's the gap you think between how the C-suite looks at the company's growth and how the reality on the floor looks at the company growth? Because I think what you're describing is that gap that you know what we did X revenue last year. We want to grow that by 18% this year and sometimes projecting those growths by the number is really out of touch with the crisis that they're experiencing on the floor with hiring the right talent and raising up the right leadership, would you say. That's where the gap is sometimes in this.
Speaker 2:Absolutely, and particularly in manufacturing, and I, you know, I look at it and compare it in comparison to, like, you know, engineering, for example, or really any like service based business. In a service based business business and like for for engineers, we use like designers as an example, like they're the work that that individual is doing is is billable to projects, right, and so you know, so it's a lot easier to, you know, look at the look at those hires, with you know that return on investment mentality, whereas in like manufacturing it's, you know, it's really like there's more emphasis put into the machines and the machinery and you know what and you know what they can produce, and not necessarily as much put into the employees which you know, makes sense from a financial business perspective.
Speaker 2:Right, I mean it's, it's the. You know the employees. We'll use a machinist as an example. It's not like they're, they're, they're getting their work. That they're doing is getting billed out at an hourly rate Like it's.
Speaker 2:To my knowledge, it's seldom that you know that jobs are priced in that way, it's I need this many parts produced and then this is how much I'm going to pay for these parts, and obviously they're factoring their labor costs into it. But you know, without that that labor cost being, you know, directly available and having a multiplier markup applied to that like I feel like that's where that, that you know that separation that gets created, that you know mentality of the employee versus the owner, yeah, like that's a big impact a big thing that influences that, but I haven't seen it yet and, from what I've read and researched, I don't know that automation is really ever going to reach the point where it's going to completely alleviate the need for people in these positions.
Speaker 2:And so, in the absence of that, like you, you have to, you have to give more consideration to, you know that that individual, because they, you know, I think, looking at them and more of in terms of this is the, this person's actually the, the, the thing that's returning me and invest you know, providing a return on my investment. It's not the machine right.
Speaker 1:I think shifting that mentality would serve a lot of those places as well let me throw out a thought here, and I don't know that I've ever really put this out there before and I'm getting too much thought before. But if we start hiring automation, we're going to be spending hundreds of thousand dollars on machines right, and those machines. We are going to invest tens of thousands of dollars in maintaining those machines going forward. You know what I'm saying? Because the people, the machines doing the work, have to be operating at a peak level. Why aren't we doing that now with people? Why aren't we doing the investment in our people to make sure they're operating at their highest level?
Speaker 1:So we're invested in their wellbeing, we're invested in their thinking, we're investing in how they are disrupted today because of the chaos that's happening at home and stuff like that. I think we're making a big mistake by saying we'll hire machines to do it in the future without the reality that there's going to be maintenance cost in that and really there's maintenance cost in what we're doing. We're just failing to pay for that and that's why we're running on a such a high turnover rate, because our machines, which are our people, keep breaking and leaving the organization. What are your thoughts on that? That's well said.
Speaker 2:I mean, it's a good analogy and I couldn't agree more.
Speaker 2:These machines are just a very expensive large.
Speaker 2:There should there should be just as much, if not more, of a investment of time, effort, energy and, you know, figuring out how to make that employee as productive and happy and healthy as possible.
Speaker 2:As, as you know, these, these shop owners, are applied to these machines and I, and I get it too.
Speaker 2:I mean these machines, you know, in some instances are millions of dollars, right, you know, and you know an employee you know isn't, at least from day one, you know that, expensive. So I mean, I get it, while there's a lot, you know, a lot more intentionality put behind. You know how do we keep this machine happy and in comparison to how do we keep this employee happy, happy, and in comparison to how do we keep this employee happy. But, uh, when you start considering the cost of retention and everything that goes into that and I, you know, I think a lot of companies have in business owners have heard about, like, how costly retention is, but I don't know a lot that have actually analyzed the, the true cost of what that is for them and when factoring on all the indirect components of it. You know I've heard a variety of different estimates but you know I don't think five times their base compensation is too far off from how costly it is to lose a you know a good production employee.
Speaker 1:And there's also a lot of research that says, as long as you have an empty spot on your line, you're losing $14,000 per person at a at a average, some of those are upwards of $25,000 just by not having that spot filled. So they're like oh, I don't want to work with Jarboe because it's too expensive for me to hire someone right now. Well, you're literally losing $14, dollars by having that spot not filled and I find that to be an interesting statistic it's one worth the be mindful of, that's for sure let me ask you this, and I want to be mindful of your time.
Speaker 1:We'll go another ten minutes or so here if you're good with that. But yeah, so you know my passion is developing leadership, particularly mid-level leadership in the manufacturing space. So here is a curious question and don't name names, I don't want to upset any of your clients or anything like that, but how often do you have a great employee and a great company and you place that employee and they just can't work with their leader? I mean, does that ever happen where, man, how we've been pitched, this company just feels like a perfect fit, and then you get a leader that is not carrying out the vision of the company and it's creating chaos for a team member? Is that a unique thing? Or do you see the leadership that your placements work with don't feel consistent with the pulse of the organization?
Speaker 2:It's I don't have enough fingers to count how many times we ran into that exact scenario and I think it's really like the the why behind that is a lot of manufacturing companies, and I think of the same in the same way in construction is a lot of times those, those mid, mid-level managers are, you know, were the best production employees. Right, they're the best machinist and they got elevated that role because they were the best production employee and you know were the best production employees.
Speaker 2:Right, they're the best machinist and they got elevated that role because they were the best production employee. And you know same, for I assume construction a lot too, and you know, that's you know that very well may be true.
Speaker 2:They might be the best production worker there, but it doesn't necessarily mean that they're going to be the best leader, and I feel like that's where, you know, a lot of businesses have got that decision wrong in terms of who to place in that position, because it's really you know that person is going to it carries more responsibility than anybody else as far as you know, the the retention of, you know, the staff that they've been entrusted to to lead and manage, and so it's.
Speaker 2:And I say this a lot, a lot of times when I'm talking with candidates, like you know, most people you know, even though they're going to work for a company and this company has a name, like it's really a person that they're going to work for Right and and it's, it's that person that a lot of times dictates how successful, enjoyable of an opportunity that it is. And so you know, we make it a point to try and you know whether or not, like I know, some companies.
Speaker 2:We have to work through hr and you know they got their thing and I don't want us to talk into their managers and stuff, but we'll still try and learn things about that individual. If not, you know, get to know them personally, because that's really what we're. You know what, what that's really what dictates whether or not we're going to be able to find a good match.
Speaker 2:It's somebody that's going to work well with this person that you know is going to be managing and leading them Right, and so it's it's you know having more times than again, I can count where we you know all other things considered, it would have been a great match, but unfortunately, because of the person that was in that mid-level management role, it ended up not being a good match. And when you see it happen once, it's like, okay, maybe those just weren't the right personalities, right. But when you see it happen two, three, four times, then you start recognizing that there's likely an issue and for us in our business.
Speaker 2:We come into a lot of information and insight, especially as a third party, a lot of times in these employment relationships, and so we get a lot more transparent feedback from folks that we have working at different places and information that likely, you know, that business owner would never come into themselves, and so it puts us in a precarious position sometimes because we don't want to be telling our clients how to run their business right but at the same time, like we want their business to be successful, because the more successful their business is, the more successful. You know we're going to be more positions we're going to have to fill for them, right? So you know we we want to provide that coaching and encouragement where we can, but you know, have to.
Speaker 2:We're walking on eggshells every time that we do particularly when it's feedback related to you know somebody that you know a client's put in a management position and you know feeling like maybe they they need to identify somebody else for that. But those that have listened, I mean plenty of success stories of us providing that feedback and the necessary changes being made to prevent the retention issues from being reoccurring.
Speaker 1:Well, if they need help developing their leaders, let them know. I'm available and I'd be glad to work with them. But you know, in the flip side, if you keep placing someone in a role and the company concludes that you know what that's our third person we've hired from, you're not sending us very good people. At some point you got to start thinking wait, maybe it's some of our infrastructure that's wrong to receive the quality of people they're sending, not necessarily our people. Their people are wrong and sometimes you've got to look at patterns and you've got to diagnose what you're seeing based on the pattern, rather than conclude that we're never wrong. And I would imagine, from a staffing agency, that could be very frustrating for you guys to navigate that. Well, man, this is fascinating. Anything else, what would your appeal be to a company that's feeling that staffing pinch and they need someone? What would you wanna say to them about how Jarboe might be able to be a conversation they should have or a partner they should collaborate with?
Speaker 2:yeah, I I'd say, if you're looking for a partner that is actually gonna listen to you, know what your problems are and and and even help you to kind of define what they you know are at a more granular level, like we are that, and, a matter of fact, like we really only have interest in partnering with companies that care enough about you know, talent acquisition and making the right hires to put forth that time, effort, energy and setting us up for success. So I'd say that's a key component, um, and then you know, just more generally speaking, like for anybody, that's that's in a pinch.
Speaker 2:I'd say, you know, don't, don't let that that feeling of of pressure you know force you into making a hiring decision, you know, without giving know full consideration to how good of a fit it's going to be, cause, you know again, you know, just going to end up costing yourself more time and create more angst if, if, if, you're letting that pressure, you know, get to you. And I see that all all too often where these you know quick knee jerk decisions are made out of the feeling of you know needing to get somebody on board right away, and it's.
Speaker 2:it's seldom when there isn't, you know, some form of thoughtful consideration you know, put into it from both ends of the table that it ends up being a good, good long term fit. So you know, I'd say, if you're looking for a partner that actually cares about that, like that's us. You know, our, our mentality is, you know has been like let's, let's make it a point to work ourselves out of work, right, and what I mean by that is we want to make enough successful placements with our customers, with, with hires that actually stick, that eventually they don't need us anymore. You know they're fully staffed and have a team that they're able to to retain, and I can and I can say we've been successful in doing just that working ourselves out of work and, thankfully, when you do it and you do it the right way.
Speaker 2:Generally, you're getting a referral to some other business that needs help.
Speaker 1:So I'd also encourage people personally don't assume affordability or lack there of these services, because when you talk about onboarding someone and payroll and benefits and stuff like that, I just would encourage people to at least reach out and have the conversation rather than conclude we don't wanna pay that, because the cost of the wrong hire is far more expensive than investing in the right process to get the right hire.
Speaker 2:Absolutely.
Speaker 1:And.
Speaker 2:I'll just speak to that real quick too Like one thing that I feel, like you know, gets lost a lot of times in terms of, you know, consideration of a staffing fee is everything that goes into that, because, you know, again, our goal is to identify the right person. You know that we've confident could be a good long term fit and we're not going to.
Speaker 2:We're not going to send over recommendations that people don't feel that way for right. So you know we may send one or two candidates for an open position and you know in the client size it's oh, you found two people and now we're paying you eight, 10, you know whatever it is, and the reality is it took us 200, 300, 400 other people to get to these two people. So it's like you're not actually paying for the person that you end up hiring. And I mean, technically, the placement fee is tied to that individual right, but what you're really paying for is all the stuff that happened to get to that one person right.
Speaker 1:Yeah, that's a great point. Well, hey, let me do this. I do something called the speed feed, where I'm just going to throw a handful of questions at you. Just give me your first reaction to it. You don't have to overthink it, but would love your take. So if you go to a Chiefs football game with any important person, who would you want to go with?
Speaker 2:Jason Kelsey.
Speaker 1:Oh, that would be an interesting experience. Is that just because you can sit up in the suite where he'd be sitting, or is that just because you think he's a fun guy?
Speaker 2:I think he's a fun guy and be a great time and obviously with the ties that he has to Kansas City Chiefs football you better watch the game.
Speaker 1:Love it, love it. So those early mornings when you have to get to an early meeting, are you a coffee energy drink guy or something else to keep you going?
Speaker 2:Coffee, specifically iced coffee.
Speaker 1:Okay, winter and summer, you're an iced coffee guy Winter and summer.
Speaker 2:Very good it goes down quicker. It gets me going quicker. Very good, it goes down quicker.
Speaker 1:It gets me going quicker, very good. So what do you think is the greatest threat to manufacturing right now? Employee retention. Okay, not surprising you feel that way, but I think a lot of people feel that way, so, yep, good.
Speaker 2:What's one tool?
Speaker 1:in your leadership tool belt. You couldn't live without Servant mentality. Love that. How does that show up?
Speaker 2:any given day for you Doing everything I can to position staff for success.
Speaker 1:Yeah, love it, love it for success. Yeah, love it, love it. Um, if there was one leader, if there was one skill set, you could master, uh, in a day, what would you pick?
Speaker 1:so many um power of positive thinking, I mean I'm gonna define that as a skill set, but no, I absolutely think there's a skill to that. Uh, by the way, a great book along that line is a book called the gap and the gain by ben hardy and dan sullivan. So I highly recommend that, focusing on what you've accomplished rather than what's not right. So highly recommend it. Good response, I love it. Last question and you don't have to speak too fast on this, but give it whatever time you need If you could only tell the audience one thing about your passion, what would you have to say?
Speaker 2:My passion is to, you know, leave a lasting impact. You know, make the world a better place. And you know it's yeah. The older I get, the more I come to realize that it's impossible to be everything to everyone. So, you know, just being mindful that there's a ripple effect to you know, the things that you do in life and you know, even though it may not seem like a very significant impact, that you're leaving on the world, you know, if you influence an individual in the right way, again it's got that ripple effect.
Speaker 1:So good, and that's a great way to end things. Thanks so much for being a part of this, ryan.
Speaker 2:Yeah, appreciate it, ryan, we'll see you later Take care.