The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

By Ruth Simon
Via wsj.com

Companies expanding American production due to consumer preferences and tariffs are finding a dearth of skilled workers

HICKORY, N.C—Here’s the good news: There are now more reasons to make furniture in the U.S. than at any point since the financial crisis. Crate & Barrel and Williams-Sonoma Inc. are expanding manufacturing in the U.S., and the factories of longtime furniture makers are humming.

Here’s the bad news: There aren’t enough skilled workers available to support the renaissance.

Manufacturers across the country are struggling to fill open slots in a tight U.S. labor market. Furniture companies, which for decades have been hit by competition from China, face special challenges after years of shrinking. A generation of prospective sewers and upholsterers have steered clear of the industry, leaving it heavily reliant on an aging workforce.

At Century Furniture, based in Hickory, N.C., delivery times have stretched to nearly nine weeks because of the worker shortage, which has caused the company to lose orders.

“I walk around our factories every other day and am spooked by what I see,” said Alex Shuford III, chief executive of RHF Investments Inc., owner of Century and several other furniture brands. “The retirements are coming and I can’t find enough people.”

The turnabout for a once-beleaguered sector has been spurred in part by the internet, which has reshaped shoppers’ behavior and expectations. Consumers demand their choice of fabrics and features but don’t have the patience to wait two months for an item to arrive from Asia. At the same time, tariffs are stepping up pressure on American manufacturers to move production home.

Roughly 90% of dining tables, bookcases and other wooden furniture are now made abroad, according to Mann, Armistead & Epperson Ltd., an investment banking and research firm. But U.S. factories still churn out about half of upholstered furniture sold in this country, much of it in places like Catawba County, in the foothills of the Blue Ridge Mountains.

Custom upholstery requires skilled labor and isn’t well-suited to long production runs of the same items common in overseas factories. Upholstered sofas and chairs are also more costly and difficult to ship than tables and bookcases, which can be easily stacked and reassembled. Shipping a single custom item from overseas can also be too costly.

“Pretty much all the companies that survived the last crisis have been in a growth mode,” said John Bray, chief executive of Vanguard Furniture Co., which has about 600 employees. “When business picked up, there just weren’t enough skilled people.”

Chad Ballard, 28 years old, was building swimming pools and trimming trees in Daytona Beach, Fla., when he decided to move to Hickory and then take a chance on an entry-level job at Century. Now, four evenings a week, he studies upholstery at Catawba Valley Community College in Hickory, a skill that could boost his annual pay to $45,000 within a few years and, if he can master the craft, to $75,000 or more.

Hiring Mr. Ballard was a small victory for Century, which in any given week has about 35 openings for sewers, upholsterers and other trades. “He came to us through a temporary agency,” said Amy Millsaps Guyer, vice president of human resources at the furniture maker. “We won the lottery.”

Furniture makers used to dominate the economies of places like Hickory. But the industry shed roughly 250,000 production jobs from its peak in 2000, leaving about 295,000 such workers in the U.S. today, according to the Bureau of Labor Statistics.

Some older, more experienced workers were able to hang on, but furniture makers largely stopped hiring during the 2008 recession, leading to a dearth of workers ages 35 to 50. In the Hickory area, 42% of sewing machine operators and one-third of upholsterers are 55 or older, according to the Catawba County Economic Development Corp.

“Parents would say, ‘Stay away. You will lose your job,’ ” said Bill McBrayer, director of human resources for Lexington Home Brands, a furniture maker in Thomasville, N.C. “How do we get the young and old to come back to the industry?”

One answer is the Catawba Valley Furniture Academy here, created by local companies struggling to find skilled employees in partnership with Catawba Valley Community College. Furniture makers are also, for the first time, creating internal training programs and adding benefits such as free health clinics.

“My dad has been in furniture his whole life,” said Nathaniel Kaylor, a 21-year-old student at the academy. “He told me from the get-go to stay out of it. You get old fast. Go to college.”

“Parents would say, ‘Stay away. You will lose your job,’ ” said Bill McBrayer, director of human resources for Lexington Home Brands, a furniture maker in Thomasville, N.C. “How do we get the young and old to come back to the industry?”

The academy launched in 2014 at the urging of five local companies, which helped develop the curriculum, donated supplies and provided employees whom the college pays to serve as instructors. Students spend eight months studying manual cutting or sewing, at a total cost of around $425; an 11-month upholstery program costs about $600.

“The good news is we can graduate 150 people a year,” said Vanguard’s Mr. Bray. “The bad news is that the industry needs 800 to 1,000 people.”

Vanguard opened its second manufacturing operation in Hillsville, Va., five years ago because it couldn’t find enough skilled workers in Hickory. To better attract young workers who balk at a 6:30 a.m. start time, Vanguard is looking at how to create a flexible schedule that will allow some workers to have a later start time and still get a full eight hours out of a production shift.

Competition for furniture academy graduates is so keen that Lexington’s Mr. McBrayer sometimes swings by in the evening to get to know the students before graduation. To find recruits, he speaks to parent-teacher organizations, high-school classes and Rotary clubs.

“The toughest question,” the 61-year-old executive said, “is the one that haunts us forever: What makes me think that if my child goes into this industry it will be there in two years?”

Kevin Sierks, chief financial officer of Crate & Barrel, a unit of Otto GmbH & Co KG, said quick delivery is another advantage for U.S. factories. “It’s no different than the fashion industry.”

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The Northbrook, Ill., retailer outsources most upholstered furniture production to three U.S. companies. It recently made its first investment in U.S. manufacturing, working with a Hickory-based startup on a new $3.1 million factory that aims to shrink production time to two weeks.

Chinese companies are also looking to cater to the changing demands of U.S. customers. This fall, Samson Holding Ltd. , which manufactures in China, acquired Southern Furniture, a nearly century-old, Conover, N.C., maker of custom upholstered furniture. “We were only going to take it to the next level by offering special orders, which is difficult to do” from Asia, said Jeff Scheffer, the North Carolina-based chief executive of Samson’s Universal Furniture unit.

Jason Buck, 21, planned to start his furniture studies in mid-July, but classes were delayed until September because there weren’t enough students. At Catawba Valley Community College, 197 students were enrolled in the welding program this fall, nearly three times the 67 studying furniture making.

Williams-Sonoma last year asked the college to create an eight-week training program. The shorter program focused on basic sewing and upholstery skills and was followed by eight weeks of in-house training.

“The labor market is very tight in North Carolina,” said Darryl Webster, the executive in charge of Williams-Sonoma’s manufacturing operation. “I quickly realized that you need to be literally standing there before they graduate offering them a job.”

Williams-Sonoma’s newly opened manufacturing facility in Baldwyn, Miss. Photo: Andrea Morales for The Wall Street Journal

When Williams-Sonoma opened its fourth upholstered furniture factory this year, a process accelerated by tariffs, it set up shop in Baldwyn, Miss., because of the area’s deep pool of talent. Still, a job fair held at a nearby community college last December produced 200 applicants, but just 15 hires. “Probably 50% didn’t have any experience,” Mr. Webster said.

Bonita Hawkins, 51, had a job offer from Williams-Sonoma in Hickory even before she earned her certificate from the furniture academy in 2016. “All over the city, I see signs looking for upholsterers, for sewers,” said Ms. Hawkins, who made custom clothing in Los Angeles before moving to North Carolina.

Craftmaster Furniture Inc., based in nearby Taylorsville, N.C., recently set out yard signs offering a $2,000 signing bonus for experienced seamstresses. Soon after, a friend told CEO Roy Calcagne that he had spotted the signs in a competitor’s trunk. “It’s every man for himself when it comes to hiring people,” Mr. Calcagne said.

Craftmaster has a doctor and nurse offering free medical care on site four days a week, and gives raises every four weeks to trainees who show improvement. “The old-school way used to be that you were lucky to have a job,” Mr. Calcagne said. “The way we look at it today is we are lucky to have you here.”

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Addressing the Challenge: Bridging America’s Gap

ADDRESSING THE CHALLENGE:

BRIDGING

AMERICA’S GAP

By: ANASTASIA SASEWICH
Via WIREROPEEXCHANGE.com

In coming years, more than 20 million skilled trade workers will retire from the American workforce—leaving gaping holes in the fabric of manufacturing, infrastructure, engineering, mechanics, healthcare, and more. In the United States, there are currently 10 million young people who will enter the workforce, all potentially qualified to enter these industries. That leaves the gulf between the jobs that need to be filled and the number of workers needed to fill them wider than ever, and growing.

This equation is a familiar one for Brett Melvin, founder and executive director of Bridging America’s Gap (BAG)—a national workforce development program diligently making an effort to connect the workers of tomorrow with the skilled-trade organizations of today. Melvin began working to address the skills gap dilemma in the crane and rigging industry in 2014 when he was selected by the Specialized Carriers & Rigging Association to help develop and lead what would eventually become Lift & Move USA—an industry-led organization aimed at closing the skills gap in the crane, rigging, and specialized transportation industries. As Melvin worked to develop Lift & Move, he saw that the crane and rigging industry isn’t unique in the workforce challenges it faces. A seed was planted and an idea began to take shape.
Brett Melvin addresses a press conference held by U.S. Rep. Lloyd Smucker upon the introduction of legislation intended to support skills training through apprenticeship and fill available jobs more quickly.

As Melvin knew, and the people he worked with as part of Lift & Move began to see, the people gap is just one part of the problem. There’s a knowledge gap to contend with as well. According to the 2013 McKinsey report Education to Employment: Designing a System That Works, there is a major disconnect between education and business. Over 70 percent of educators believe that students are ready to work on day one of their new job, but less than 50 percent of either students or businesses would agree with that statement. Perhaps even more alarmingly, the McKinsey Global Institute estimates that, by 2020, there will be a global shortfall of 85 million high- and middle-skilled workers.

ACCORDING TO THE 2013 MCKINSEY REPORT EDUCATION TO EMPLOYMENT: DESIGNING A SYSTEM THAT WORKS, THERE IS A MAJOR DISCONNECT BETWEEN EDUCATION AND BUSINESS. OVER 70 PERCENT OF EDUCATORS BELIEVE THAT STUDENTS ARE READY TO WORK ON DAY ONE OF THEIR NEW JOB, BUT LESS THAN 50 PERCENT OF EITHER STUDENTS OR BUSINESSES WOULD AGREE WITH THAT STATEMENT.

In 2017, after several years focusing solely on the crane and rigging skills gap, Melvin began thinking more deeply about the broader challenge the two-fold skills gap posed. The name Bridging America’s Gap (BAG) popped into his head, and after finding the website domain name unclaimed, things progressed quickly. Before he knew it, he was filling out the paperwork to register BAG as a nonprofit organization. By the start of 2018, Melvin was able to give BAG his full attention; by February of that year, the first BAG website was up and running and the first partners had signed on. The organization received its official 501(c)(3) designation just four months later.

A BETTER FIT

Melvin pointed to the current state of affairs created by the existing “college for all” solution the U.S. has promoted as the genesis of the skills gap dilemma. In other countries, education is handled in a different way. “Students are tested early on to find out what will work best for them and are then encouraged to follow an appropriate career path,” he explained.

“Currently, we have over fifteen million high school students in the United States. Over thirty percent (about five million) have no plans to pursue a post-secondary education upon graduating. Of the ten million young people that do go on to college, approximately forty percent will not receive a degree within six years of starting college, but they will have college debt averaging well over thirty thousand dollars each. That is both a national tragedy and a national crisis at the same time.”

Melvin and BAG call the trades skills “… a natural answer to both the tragedy and the crisis.” Unfortunately, the trades “… have become a ‘bad word,’” Melvin said. “As a result, it’s become common in the U.S. for people to enroll in four-year colleges or universities rather than applying for skilled trade positions. Then they leave a short while later with a lot of debt and, in many cases, no clear sense of what they want to do.”

As a non-profit organization, BAG works to align all sides of a given industry to a shared vision, and then lead them in the development of a solution to their skills gap challenge. The effort involves collaboration with students, educators, and businesses, and the end goal is to bring the next generation to the skilled trades industries in the necessary numbers.

This is approached through a number of initiatives, and Melvin likens the process to coaxing two shy people into talking to each other. One of the primary BAG initiatives is the Career Skills Event, in which students from local schools and community colleges spend a half-day at a member business’ facility, moving quickly through a series of education stations and hearing direct testimony from industry professionals. Participants learn about career opportunities while getting hands-on experience.

The hope is that with a clear window into what the various trades entail within their respective day-to-day activities, and the professional elements (good salaries, robust benefits packages, and opportunities for growth and advancement) that place these jobs in a desirable position, students may come to find them much more attractive—and maybe even a better fit than a four-year-college education path.

“WE WORK DILIGENTLY TO BRING TOGETHER YOUNG PEOPLE AND EDUCATORS WITH EMPLOYERS TO HELP BUILD A LONG-TERM ENTRY- LEVEL EMPLOYEE PIPELINE.”

BRETT MELVIN

“WE WORK DILIGENTLY TO BRING TOGETHER YOUNG PEOPLE AND EDUCATORS WITH EMPLOYERS TO HELP BUILD A LONG-TERM ENTRY- LEVEL EMPLOYEE PIPELINE.”

BRETT MELVIN

POSITIVE SIGNS

Because BAG is working to alleviate the skills gap in a number of industries, the organization has to work hard to ensure that its approach is as dynamic and varied as the industries it serves. Melvin noted that while the Career Skills Events are among BAG’s initiatives, there are no two events that are exactly alike.

“Depending on the event and the partner we’re working with, we focus more heavily on either building business participation or attracting student attendees,” he said. “There is no one way, but a multitude of logical attempts each time until we find a way that works best. The exact same way rarely works twice in a row. Educators and students and businesses know they need each other, but aren’t sure how to get the conversation started.”

The good news: the hard work being implemented by BAG and other workforce development organizations like it is beginning to show signs of productivity. Melvin pointed out that educators and other key players in the education system are “starting to wake up” and recognize the problem. Additionally, the government is taking the time to sit down and ask skilled and experienced minds to address the challenge of the skills gap.

Melvin was recently invited to represent BAG by participating in a Department of Education program called ReThink CTE, where “CTE” stands for Career and Technical Education. A number of key CTSOs (Career and Technical Student Organizations) like Future Farmers of America and SkillsUSA were in attendance; scholars described the current landscape and applicable circumstances in the relevant industries before roundtable discussions took place. The goal was to make positive movement in addressing the issue of how CTE is taught in American schools. ReThink CTE wasn’t the first time BAG and CTSOs have come together to address these issues, and Melvin hopes it won’t be the last.

THE HOPE IS THAT WITH A CLEAR WINDOW INTO WHAT THE VARIOUS TRADES ENTAIL WITHIN THEIR RESPECTIVE DAY-TO-DAY ACTIVITIES, AND THE PROFESSIONAL ELEMENTS (GOOD SALARIES, ROBUST BENEFITS PACKAGES, AND OPPORTUNITIES FOR GROWTH AND ADVANCEMENT) THAT PLACE THESE  JOBS IN A DESIRABLE POSITION, STUDENTS MAY COME TO FIND THEM MUCH MORE ATTRACTIVE.

WORKING TOGETHER

In addition to participating in ReThink CTE, BAG has focused on multiple aspects of workforce development, working early on with the USA Workforce Coalition as well as Congressman Lloyd Smucker (R-PA) to help create and promote the Workforce Development Tax Credit (H.R. 1739). BAG has thus far worked most closely with SkillsUSA in Wisconsin and Indiana, but has growing partnerships with the Association of Equipment Manufacturers (AEM) and others.

This October, at the Association of Equipment Manufacturer’s ICUEE 2019, a special careers day will take place on the last day of the show. Hundreds of high school students will be able to see firsthand the many rewarding industry careers available. Melvin considers this upcoming event a major opportunity for BAG. The takeaway he’s aiming for is reflective of the overall change in mindset he says is critical for the progression towards eliminating the skills gap.

“The ICUEE event is going to be really exciting for us as an organization, since it’s the first time we’ll be bringing students to a major trade show to see firsthand the excitement of an industry that wants them,” he maintained. “As adults, many of us have been to more trade shows than we can count. But think back to the first time you walked into a really big trade show that was filled with things that interested you. [These students] will be experiencing North America’s largest construction and utility trade show while BAG is also holding our CSE with Learning Stations and Champions sharing all about the industry and the opportunities available to them. They will have the chance to visit booths, spend time watching equipment demonstrations—and hopefully walk away thinking: ‘Wow, this is where I need to be!’”

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.