Compensation and employment in the Connecticut manufacturing industry is on the upswing, as more companies look to hire from a thin workforce.
“A lot of us are growing right now, so we are getting more people involved,” said Chris DiPentima, president of Middletown metal fabricator Pegasus Manufacturing.
Despite years of losses and stagnation, the manufacturing industry was the third largest provider of compensation in Connecticut in 2010, according to statistics released in December by the U.S. Bureau of Economic Analysis. Manufacturing trailed only the finance industry and the government in total compensation to workers, even besting the health care industry, which grew 19.3 percent in five years.
The Connecticut manufacturing industry provided $15.6 billion in total compensation in 2010, up from $15.5 billion the previous year. The slight uptick came after a slowing economy had created a downward swirl in 2008. That year, total compensation dropped 7.4 percent.
In Hartford County, total manufacturing compensation reached $4.9 billion, according to BEA. The industry was the third biggest provider of compensation in Hartford, Tolland and New Haven counties. In Middlesex and Fairfield counties, it was the second largest compensator. In Litchfield County, manufacturing was first.
“A lot of us are doing really well now, so we want to keep our employees happy,” DiPentima said. “A stable workforce goes a long way because you don’t have to backfill employees and train their replacements.”
Manufacturing appears poised for an even better year in 2012 as employment and compensation per employee rose, according to preliminary data from the U.S. Bureau of Labor Statistics.
Over the past two decades, the industry steadily lost jobs from an average workforce of 300,800 in 1990 to 166,000 in 2010.
However, through the first 11 months of 2011, average manufacturing employment hit 167,100, which would be Connecticut’s first annual employment increase since 1998 if the average bears out through the end of the year.
“The key thing in 2011 was caution. They were hiring for very specific positions,” said Jerry Clupper, executive director of the New Haven Manufacturers Association. “That is the mindset most of the companies are in.”
As employment rose in 2011, so did the compensation per employee. For production employees, average weekly pay through the first 11 months of the year was $1,000.38, the first time ever weekly production pay cracked $1,000. For all employees, average weekly pay hit $1,206.57, an all-time high.
Manufacturing work is becoming more complex, so companies are paying employees more, Clupper said. Hardly any employees now are simple button pushers, and instead operating complex machinery requiring advanced training and intelligence.
“They are really multifunction people now,” Clupper said. “They have to be able to operate in a collaborative environment.”
A gain in productivity also was a factor in increasing per employee compensation, DiPentima said.
As the number of manufacturing employees declined in the past two decades, the pool of potential new employees shrank as well. Because new, well-trained people are hard to come by, employers do what they can to retain their workers.
“When we have people who think about leaving … we like to think about pay increases,” DiPentima said.
DiPentima, who is a member of several manufacturing organizations including the Aerospace Component Manufacturers, estimated the nearly 5,000 Connecticut manufacturers have 15,000-20,000 job openings. Most companies aren’t able to fill all their vacancies because they can’t find people with suitable skills to fulfill their needs.
Pegasus employs 90 people and is looking for eight more, but DiPentima hasn’t been able to find the right hires.
“The big push for manufacturing is workforce development,” DiPentima said.
For graduates of Connecticut vocational schools, Pegasus will put some into the company’s apprenticeship programs or encourage them to get further training at a community college.
Danbury industrial manufacturer Radial Bearing Corp. has 36 employees. To grow its workforce, Radial will take a step further than most Connecticut companies and provide necessary training if the right person comes along.
The problem is most younger workers don’t seem interested in the jobs, said Stephen Papish, president of Radial Bearing.
“If the kids coming out of high school aren’t going to college, you would think manufacturing would be a good fit for them,” Papish said. “But you don’t see that much of a desire to learn… It is more a function of the motivation of the individual.”
While visiting Pegasus on Jan. 4, U.S. Rep. Joe Courtney (D-Vernon) announced the proposal of new federal legislation that would encourage more manufacturers to help develop the young workforce. The legislation would provide tax credits to manufacturers providing equipment to local colleges and vocational schools, as well as for providing internships.
“If somebody has the aptitude, we’d be happy to show them more,” Papish said.
