What A Small Factory Learned From Big Tech

What A Small Factory Learned From Big Tech


The unemployment rate fell to 3.5 percent, down from 3.7 percent. That is the
lowest level since 1969. We just saw a fantastic job report. You know, 50 year
low unemployment rate. We have a 50 year
low for the unemployment rate. Wages have risen 3.4 percent over the last year. If you look at wage and isolation,
you do have individuals that will move for twenty five cents. Fifty cents an hour. I
mean, that’s that’s real. This is the brand new
break room at Marvin. Marvin isn’t a tech startup. It’s not a
boutique creative agency. It’s not a Gen Z digital outlet. Marvin is a fourth-generation
family-owned manufacturing company headquartered in War Road, a
remote town in northern Minnesota. Like, really remote, so remote that Marvin
had to fly us up there on a private company plane
to shoot this story. Marvin makes windows and doors and they’ve
been doing it for a while. Think over a hundred years based
in the same remote northern Minnesota town the whole time. And their employees, well, they’ve been
there a while to get here. Twenty five years of
14 years of service. I’ve been married for
almost 13 years. Even with a loyal workforce. Marvin and other manufacturers find
themselves squeezed by this historically tight labor market where
unemployment is low and workers have more job opportunities. And not just workers in
San Francisco and New York. Even in this rural Midwestern town
with more than seventeen hundred people, that sits six miles
from the Canadian border. So just like the big guys in
the most populous cities, Marvin had to get creative. The strong U.S. economy has led to
a tight labor market. That means there are more jobs
available than workers to fill them. Unemployment came in at 3.5 percent in December 2019 . That’s a 50-year-low. There have been more job openings
than unemployed people since early 2018. And the manufacturing
industry is not immune. In fact, those numbers are
even more dire for employers. In December 2019. The unemployment rate in the
manufacturing space was sitting around 2.7 percent. The labor market for this industry
has been getting tighter and tighter. Since 2010, we’ve had
unemployment rates underneath four percent. Sixteen out of
the last 18 months. These are tight labor markets. Firms are competing for 4
four workers in their training. Any margin they could do
to successfully compete for them. That competition comes
in many forms. Some employers are
easing hiring requirements. A 2019 survey found that 62
percent of employers would hire workers with less than the required
experience, and larger companies have gotten more creative about how they
attract and keep their talent. Aol routinely hosts
lip sync competitions. Adobe built meditation rooms. Intel offers free
on site carwashes. But many of those companies have
at least one thing in common. They’re in big cities
with lots of workers. But Marvin isn’t. The company employs more than
2000 people in their Warroad facilities. That’s more than the
entire population of the town. This means that even in a
less competitive economy, they would still need to attract workers from
outside of War Road. And even though some manufacturers have
laid off workers in recent months, unemployment throughout manufacturing
industry employees is still low and competition for these workers
is as fierce as ever in the northern Minnesota region. Polaris, the multi-billion dollar
ATV and snowmobile manufacturer, has a factory just 20 miles
down the road in Roseau, Minnesota. It’s about a 26 minute
drive away around northern Minnesota. The jobs are available all
over the place up there. So that’s one of the things that
is hard to retain people and keep people in the area. One way that
Marvin does compete right now is on salary. Starting pay at
Marvin is between $15.25 and $18.25 per hour. That’s higher than the Minnesota minimum
wage, which is $10 per hour. But with unemployment at
a historic low. Marvin is stepping up its game. Part of that strategy turned the
factory into a place where people enjoy spending their time. That brand new break
room that Marvin built. There’s a reason it looks like it would
fit right in at the Airbnb or Google offices. It’s because Marvin went on a
design inspiration, tour right through Silicon Valley. We’ve been to
Google, we’ve been to Pinterest, Airbnb. The space
uses Swedish design. It has pastel colors, a communal
meeting table, new booths, power outlets and one employee favorite. Lots of new microwaves. Marvin also cut into the ceiling
of the plant to add skylights. The only way to get natural light
into a room located in the middle of a building. It may have been
a wise decision, according to the Harvard Business Review, “Comfortable light”
is an important wellness perk to 50 percent of workers.” I definitely like how bright it is. It seems so gloomy and dudgeon
before project involves renovating all the bathrooms in the building, some
of which hadn’t been remodeled since the 60s. Marfan’s also adding private telephone
booths on the floor and updating the offerings
for new mothers. The idea for the lactation pods
came from our our H.R. team that supports
the operations group. And I received an email from a
couple of them and had indicated A there is a need, but
then be in an airport. We saw one of these mobile pods and
they said, well, could we give it a try? And Marvin isn’t just
making changes to its physical workspaces. The company is also
experimenting with a revamped work schedule. Marvin introduced a new
long weekend shift, offering employees flexibility and
work life balance. Jenna Kendrick was born in Warroad and
has worked at Marvin for six years. Earlier this year, she left her
job as a production senior to become the weekend to lead her team
of six works 12-hour shifts on Friday, Saturday and Sunday. Not having to find somebody to drive
my children to their events has been just a big relief and also
being able to see them play their games because most of their summer
events games are during the week. I also have a younger my
youngest, he is seven years old. He is home, and when my two
oldest are out playing sports, I have nobody to watch him. So
that’s another really flexible scheduling isn’t unique to Marvin. Non-traditional perks like flexible
scheduling, fitness incentives and onsite healthy food options. Top U.S. workers wishlists. According to a 2019 survey, Marvin’s
efforts appear to be working, at least with their current employees. The renovations and updated
shift schedules are popular. It shows that they care when you get
to come and enjoy your break in here. The atmosphere and
even the bathroom. Marvin declined to disclose the exact
cost of their renovations, but promised the commitment they’re
making is, “not small.” But if they’re already spending all
that money, could the answer to hiring and retaining employees be as
simple as just giving everybody a raise? We make sure we’re
providing meaningful work for a fair wage. I don’t think
things are siloed. I don’t think it’s this or this. It’s a blend of many things. So provide a total
experience for the employee. In addition to trying to
create that total experience, the renovations will also likely be cheaper
for Marvin than an across the board raise. Economists say that
nontraditional perks let companies improve and employees time at work. But more importantly, those perks
don’t drag down company profits. So when they do a wage increase, what
they do is to change the nature of the bargain with an employee
that becomes the new base. So that’s part of the
whole cost of doing business. It eats into their profit margin,
which how slim their margins in terms of where they operate say
in a very competitive environment, If they do a benefit, kind of a
one off benefit, such as something like having these really beautiful break
rooms and things like that. There is an investment. But
it’s not a continual contribution necessarily to a higher pay scale
to maintain to maintain that business. Even if employees are
happy, there’s another problem, decades in the making. Manufacturing workers and the towns
that housed them are getting older. According to a 2016
study, 27 percent of manufacturing employees are 55 and older, meaning the
industry is facing a wave of retirements in the next
decade or even sooner. Marvin knows this. It’s another reason behind
the renovation decision. Marvin has been blessed that we have
so many employees who have been here decades upon
decades upon decades. Remember? Twenty five years I have
fourteen years of service, almost 13 years. But there’s an inevitable
downside to celebrating so many multidecade work anniversaries. But we are making decisions and
we’re looking at our shift schedules with different ways to accommodate
and look at the incoming generations as well as our current generations
do, so that we can be a desirable place where,
you know, people are. They’re coming here and not just to
do a job, but they feel connected in a broader way to our
purpose and what we’re doing. Polaris, the snowmobile company with a
plant in nearby Roseau, is also feeling the pressure. We had reached out and partnered
with 31 different schools, doing about a two hour radio global call
to ensure that we’ve got the connection to the relationships and
are not only supporting, but building in the interests of
bringing students in through internships throughout the summer, providing a look for
them to see that it’s not a job that blurs
that it’s a career. Roseau County, which includes both Warroad
and Roseau, has its own initiatives to attract new talent
to that rural region. The City of Roseau estimates the
area loses around three quarters of its 18 to 22 year old
population when they leave for college. They’re focused on drawing those people
back to small town life in their late 20s when they have
kids and are looking for stability. The county runs a downpayment assistance
program aimed at helping new residents purchase a home and put
down roots in the area. The revolving loan program provides
eligible candidates with up to $7,500 to be used
for a down payment. Funding comes in part from major
employers in the area, including both Polaris and Marvin. These northern Minnesota initiatives are
part of a larger nationwide trend. The Kansas Commerce Department offers
up to $15,000 in student loan repayments for individuals who move
to one of its 80 rural counties and in the Northeast. Vermont is putting up
cold, hard cash. The state’s program offers new residents
$10,000 over two years in an attempt to draw people to
an aging state with 2.3 percent unemployment by 2030. Twenty four percent of Vermont’s population
will be over 65, up from just 13 percent in 2006. Those initiatives may be working. Millennials are leaving big cities
by the thousands in 2018. Nearly twenty seven thousand people aged
25 to thirty nine left cities like New York and San
Francisco for more family friendly and affordable places to live. It was the fourth year in
a row these urban centers. Other young adult
population shrink. Christine Marvin says attracting those
young workers to Warroad will be a part of Marvins next chapter. We’re going a new age, right? And we’re in such a
fast paced digital world. And now we’re experiences, you know,
our king alongside, you know, the products, quality products we create
that we’re in a unique position to help, you know, make the
make the future real and help drive us into that, you
know, that next generation. And if the future is modern
break rooms, mobile lactation pods, small like bathrooms and schedules aimed
at work life balance, Warroad, Minnesota just might be able to give
those big cities a run for their money. Invest in you. Ready, Set. Grow CNBC and acorns.

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About the Author: Oren Garnes

100 Comments

  1. Those two factories are located where hardly people live and it is very cold place as well, no wonder they have a hard time to hire people to work for them.

  2. When Consumer demand goes up, companies have to hire more workers to cope with the workload, which leads to labore shortages, which leads to higher wages, which to leads higher demand and so on.
    But what goes up, eventually goes down.

  3. It's a trap. They want people to be overworked by staying at the plant for as close to minimum wage as much as possible. It has proliferated the tech industry.

  4. They're just doing till there is tech to automate those job positions. Manufacturing is going tech. Soon workers will be phased out.

  5. Or, crazy thought here, maternity leave. Currently live in canada. It's awesome. I'm a dude and also qualify. Adoption also qualifies.

    Amazing.

    Lactation pods are a good solution to a dumb problem.

  6. It’s almost like low wages affected the labor participation rate. Weird. This should be obvious, but then again, the powers that be have never wanted the US workforce to actually get a raise.

  7. It's funny how the US has the lowest unemployed rate in 50 years and yet CNBC considers Trump the worst president ever… Talk about being biased

  8. 3:57 wow he has a thick accent. I honestly thought everyone in Hollywood who does a MN accent was so far off from what we sound like (I’m from Minnesota) but I guess northern Minnesota really does have a thick accent.

  9. I have small sympathy for employers having a hard time hiring people.

    Why

    Cause the second sh!t hits the fan … you're laid off.

  10. I made 15 dollars an hour in the late 80s when rent for a 1 bedroom apartment was 150 a month and state minimum car insurance was 50 bucks a year. Wow 15 an hour these companys are sticking it in your ass

  11. I use to intern out in the rural country side. It was not for me. I like the city. Maybe when I retire, but my youth feels right in the city

  12. Tiny perks that will all go out the window as son as the economy takes a turn and employees will realize what they are: just a replaceable individual.

    Trump is a populist, he is PRINTING money and some day that debt will have to be paid.

  13. The problem is that manufacturing in the USA feels shaky. It feels like everything is made in China, or there's pressure to push companies to make things in China vs the USA. People seem to be put into a situation where they have to buy the cheapest goods over goods made in the USA.

    I try to by Made / Assembled in the USA. Sometimes the cost is 2-20x as much. Sometimes it's a surprise and you'll find something cheap at Walmart.

  14. One report by DW Germany shows 50 million poor in USA why?
    US 50 years highest employment rate.
    We have the 46 years highest unemployment rate in India.

  15. Universal Basic Income for all now!
    My seventy year old husband and I will not vote for a candidate who doesn't have UBI as a part of their platform.

  16. When the incumbent was seeking the republican nomination, he said these numbers were fake. Now the election is coming up and he is saying they are real.
    The truth is that he was right the first time.

  17. Hold the phone! You're trying to tell me; if I pay employees nicely, provide them with comfortable amenities, and just all around put a focus on their comfort and happiness, then they're going to stick around longer and not jump ship the first chance they get?! :O Revolutionary! /s

  18. Yeah sounds great and all but milking booths, welcome to the stone age where woman still have to hide to feed their babies. The most natural activity in the world. WTF

  19. 30 minutes after watching this video I met an employee of Marvin and they said, "One of the best places I've ever worked for. Not a lot of money, but you're happy."

  20. The economy is terrible. If anyone says otherwise, they are wealthy or sadly misinformed. Unemployment may be low, but under employment is at an all time high.

  21. Guys need a booth to hide in and pretend to need a break to. Wonder why woman get a bad rap..hmmmmm… let's put extra break hidden rooms for woman. Screw the guys .

  22. I am unemployed and do not need anything. Thank God he provided me with everything. Look at the birds of the sky do not sow, do not reap, and the Lord himself nourishes them. Try not to make money, but to save your soul. After mushrooms, I began to hear demons and they say that hell exists. God forbid to get there! Do not be afraid of demons and their dreamy horror, read the Psalter do good and remember that truth is immortal!

  23. At the last job, they did not pay me most of the salary. Better work for yourself and not become a slave

  24. 62% will hire those with less than qualified requirements….

    Have you seen the requirements? They want 5 years of experience for entry level job. They have to hire less than qualified people

  25. Millenials……like non millenials also left New York and San Francisco because it's super expensive there and Trump eliminated all the federal tax cuts California and New Yorkers got for paying their state taxes.

    They all realized it was too expensive to contribute their fairshare in these states anymore.

  26. The mistake of most manufacturing is their locations verses their sales areas. Marvin like so many should consider other rural locations where the workers are at. Micro Town invasion is the best way to expand.

  27. I usually check out the bathroom of a potential employer. I must say the bathroom, the work room environment really factor in my decision. Kudos to a manufacturer to trying.

  28. You know what’s cooler than a new break room?

    A LIVING WAGE

    People live at home, not work. While yes, you do want to work at a place with nice amenities, what matters more is if you have a safe, comfortable place to live with your family.

  29. why then, if the competition of seeking workers is so fierce, there are so many homeless and jobless people? is it all about the requirement? for $15/hour jobs?

  30. democrats will tell u that the economy is not improving even when unemployment is at an all-time low just because they hate the trump administration.

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