For Eric Peter, president of Alamo Transformer Supply Company, the struggle to hire at his small manufacturing company on the city’s East Side mirrors manufacturing hiring woes felt across much of the industry.
Demand is rising, but just as in the hospitality and service industries, workers aren’t returning in sufficient numbers to meet that growth.
Peter has been unable to fill four positions in his small shop of about 30 employees for going on a year. Adding to his stress, lead times from suppliers are lengthening just as demand from his clients are rising. His suppliers tell Peter a now-familiar story, he said: they too are facing labor shortages and their own supply chain issues.
While the receding pandemic has complicated hiring, many local manufacturers say their hiring challenges predate the shut down, making recruiting pipelines set up in recent years all the more important.
The current shortage, however, is acute.
“No one is fully staffed” at the small and medium sized firms in the area that Choice Staffing recruiting agent Chanel Cantu works with. “No one is running at full capabilities.”
Recruitment numbers have improved somewhat since early June, Cantu said via text message more recently, but levels are still not back to normal.
Following a trend seen in the restaurant industry, some manufacturing employers have tried to sweeten the pot for workers by offering wage increases and sign-on bonuses. Roughly three quarters of manufacturing executives responding to a May survey from the Dallas Federal Reserve Bank said they were raising wages to attract applicants and retain employees.
Even after raising wages, some local manufacturers say they’re still having difficulties hiring, said San Antonio Manufacturer’s Association president Rey Chavez: “It’s a very tough nut to crack.”
Many employers, he said, hope the looming end of federal unemployment benefits will bring the labor market “back to normal.”
Federal unemployment benefits end on Saturday in Texas. At the urging of business groups, Gov. Greg Abbott announced in late May that the $300-per-week federal benefit for unemployment, among other federal assistance, would be cut June 26 in Texas, ahead of when Congress scheduled them to expire in early September.
The majority of open positions in the industry are for entry-level or intermediate-level jobs, according to a May report from Workforce Solutions Alamo, the regional arm of the Texas Workforce Commission that helps job-seekers find work.
Demand for labor and difficulty hiring are widespread across the industry. The Federal Reserve Bank of Dallas’ manufacturing survey released June 1 reports that more than half of executives who responded said they are looking for entry-level positions, with nearly 70% reporting that it has been “very difficult” to fill those roles. Only 2% said they had no difficulty at all.
While other industries have reported similar struggles finding people willing to take lower wage jobs, more than half of manufacturers are also struggling to fill intermediate-level job openings, according to the Dallas Fed survey; 93% said they were having a tough time finding qualified workers.
Roughly 50,800 people are employed in manufacturing in the San Antonio-New Braunfels metro region, according to Workforce Solutions Alamo. The agency reported that the sector had rehired for the roughly 4,100 jobs lost during the pandemic, and even gained jobs in March, but it also reported hundreds of jobs lost in April and May.
Chavez, the president of the local manufacturing association, said the recent backslide in manufacturing jobs showing up in local employment figures have perplexed staffers at workforce groups he’s spoken with, as well as himself.
“Everyone is looking for people,” he said. He speculated that the job declines may reflect the closures of very small manufacturers such as candy makers and machine shops.
The decline in San Antonio reflects a pattern of slowing growth seen in manufacturing everywhere, said Keith Phillips, senior economist and assistant vice president at the Federal Reserve Bank of Dallas.
In the last two months, he said even though demand has been strong, production has slowed because input goods like plastics and steel are in short supply and because manufacturers can't find enough workers — the very challenges slowing Alamo Transformer Supply Company.
So even while many manufacturers may be growing, "it's never the case that all manufacturers are doing well," Phillips said. "There's always some products in decline."
Adrian Lopez, CEO of Workforce Alamo Solutions, said one hiring challenge is the entrenched perception that manufacturing jobs mean hot and sweaty work on an assembly line. “That’s not necessarily a reflection of what this work really looks like today,” he said.
As the industry increasingly turns toward automation and robotics for line work, human operators are needed to guide and oversee these robots. Changing how workers think of manufacturing labor is a central part of several local recruiting programs that have been developed in recent years.
San Antonio’s Economic Development Foundation spearheads some of these programs.
“We start at the high school level, and try to hopefully change some of the perceptions of what manufacturing is,” said Tom Long, chief development officer at EDF, at a recent luncheon hosted by the San Antonio Manufacturer’s Association to promote these recruitment pipelines.
Long, who said he worked for a textile manufacturer growing up, told audience members that EDF’s goal is to place 315 interns at manufacturing firms across the city. The agency provides funding to offset costs. EDF also seeks to up-skill the workforce for more intermediate-level positions through training programs.
Employers have also worked with public entities to create recruiting pipelines that re-skill existing manufacturing workers, or bring in new ones as students from high schools and colleges. For example, the Texas Workforce Commission this month funded a $1 million grant for Alamo Colleges to provide advanced manufacturing skills for 512 newly hired employees at the Navistar plant in San Antonio.
The Advanced Manufacturing Technology program, started by Toyota in 2010, gives students a two-years associate degree while earning work experience from a paid company sponsorship. Brought to Texas in 2013 as a partnership with St. Philip’s College, the program is now run by the Texas Federation for Advanced Manufacturing Education, which was started in 2016 under Bexar County’s stewardship before moving under a similar national-level federation.
Claudia Rough, a 21-year-old student at St. Philip’s College, is one participant. Before she joined the program at the insistence of her father, who also works for Toyota, she was on track to become a dental hygienist.
“I didn’t even know how to work an Allen wrench,” she said.
But at Toyota, she’s learned to precision weld and fabricate metals. “I love getting my hands dirty, I love getting involved on the floor,” she said. After she graduates, she plans to continue to work at Toyota and climb the managerial ladder.
Apprentice-style programs like these are common in Germany, where manufacturing still makes up a quarter of its economy.
"Many people in the United States think we should go to a Germany model," said Phillips, the economist. Although manufacturing has been downplayed for years because of outdated perceptions, he said, these new recruitment pipelines are "interesting and innovative."
For the students who join them, "they can get a good job making good money," Phillips said.