How one U.S.-based jewelry manufacturer is working to attract and retain talent

By Shawna Kulpa

(Originally Published by MJSA June 2019)

Note: The following case study is part of MJSA Journal’s periodic “Made in the USA” series, which focuses on how U.S. jewelry manufacturers are staying competitive, particluarly against overseas counterparts.

By most economic indicators, the U.S. economy is healthy: The Gross Domestic Product is expected to remain between 2 and 3 percent (which is considered the ideal range). Inflation is expected to remain low at around 1.8 percent for the year. Unemployment remains low and is expected to average 3.7 percent for the year. And U.S. manufacturing is forecast to increase faster than the general economy, according to the MAPI Foundation (the research affiliate of the Manufacturers Alliance for Productivity and Innovation). So everything must be going great for U.S.-based jewelry manufacturers, right?

Not so fast. Some of the very factors that are keeping the economy booming are also causing a problem for some jewelry makers who manufacture in the U.S. While low unemployment is often regarded as a positive sign of a growing economy, it can also have negative consequences for business owners trying to hire and retain talent. When jobs are plentiful, as they are now, employers are often forced to raise pay sharply and expand benefits to attract and retain workers. For most employers, there’s a limit to how much they can offer before it begins to hurt their bottom lines.

It’s a problem that Lashbrook in Draper, Utah, has been struggling with. “The economy makes it difficult to get the labor we need,” admits owner Eric Laker.

He notes that the company, which specializes in creating customized men’s wedding bands, has taken all of the usual steps companies do when courting new employees: They’ve raised their wages, improved benefits, offered incentives, and tried to make the company a good place to work. Still, the company continues to struggle to hire and then retain employees. That’s when Laker got the idea to do something that might seem a little unusual for a company struggling to hire all of the help it needs: He decided to open a second manufacturing facility.

Upping the Ante

Like many in the industry, Laker has had a hard time finding and hiring experienced jewelers. However, he’s had luck over the years hiring entry-level workers. “We’re hiring entry-level production workers and trying to turn them into jewelers,” explains Laker. “But it’s hard to predict how well someone will do a job or how much they’ll like it.”

“The bigger problem is that in the time needed to get them good in a specialty, I’m losing 60 to 70 percent of them. We wind up losing them to other opportunities because they’re not invested yet.”

For example, he notes that in 2017, the company hired 27 people for its finishing department; by the end of 2018, just seven of them remained at the company. “We’ve always had high turnover, and we always will. The hope is that we get better at predicting it all the time.”

Although finding and retaining employees has been a problem for the last four to five years, Laker says it’s gotten worse over the last 18 to 24 months.

“There’s so much competition for entry-level employees,” he says. He notes that he used to be able to easily find and hire workers for $9 to $10 an hour, with a plethora of incentives that they could earn through their training. That’s no longer cutting it with today’s job applicants.

“Now we have to list jobs at $15 an hour just to have any interest,” says Laker, and even then it’s sometimes not enough. “We may have three new employees scheduled to start on Monday, but only one or two of them show up because the others accepted another offer. It’s gotten to the point where if we have a candidate who’s decent, we don’t let them leave the building without making them an offer and trying to get them excited about the job.”

The higher starting pay rate may be attractive to job candidates, but it also makes training incentives harder to offer early on. So even if Laker is able to entice workers to come on board, they’re not as likely to stay as they have been in the past.

“It is more expensive, but the bigger problem is that in the time needed to get them good in a specialty, I’m losing 60 to 70 percent of them. We wind up losing them to other opportunities because they’re not invested yet.”

And Laker is hardly alone in this problem, which makes hiring even more difficult, as everyone keeps upping the ante. “Everyone is doing the same thing,” he says. “I have an employer down the street from me offering its employees two free meals a day. That’s the type of stuff I can’t afford to do.”

Expanding the Talent Pool

Despite the staffing difficulties, Lashbrook’s business continued to boom, and Laker knew he needed to expand the company’s operations within the next 18 months. Last year, staffing issues “caused us to run behind schedule for several months,” he says. “Lack of capacity has also kept us from adding a fashion line that has been delayed for two years. We have had to curtail growth because of it as well.”

Thinking about how and where best to locate a new facility, Laker soon recognized that he needed to pull from a different labor pool. Rather than find another nearby location in Draper, he centered his search in less populated areas of the state.

“I figured that if we went to a rural community, there wouldn’t be as much competition, and the pay scale would tend to be lower,” he explains. “We would wind up being more competitive.” He also notes that he hoped that the rural workers would wind up being more permanent.

Initially the company picked five counties in Utah and studied the demographics. They narrowed the field down to two, and then began working with the local business development offices to learn more about each county. In one county, which was home to a coal mine that had closed, they learned that the end goal of most residents was finding a way to move away from the community. The other county had beautiful mountain plains, but no jobs. “It was the type of place that people really didn’t want to leave,” says Laker. “We picked that one.”

“I figured that if we went to a rural community, there wouldn’t be as much competition, and the pay scale would tend to be lower.”

The company is still in the process of getting the new facility up and running, and it hasn’t been without its problems. “The biggest problem in that area was finding an adequate facility,” he says. Ultimately, Lashbrook found one large enough to allow for growth (and that had an open-ended lease). Initially, Laker foresees the facility focusing on finishing production work, but believes they’ll eventually move some of the machining work there as well.

Although they’re not yet open for business, hiring hasn’t proven to be a problem. The new facility’s manager—an ideal local candidate with years of experience in lean manufacturing—is currently in his third week of training. And one trainer from the Draper facility will be transferring to the new facility permanently when it opens later this month. Laker doesn’t expect that he’ll be the only one.

The Draper area now has “housing prices that are rising at the second-highest rate in the country,” says Laker, who notes that the community has seen an influx of folks moving into the area due to an increase in the number of tech companies, which is also driving up wages. This influx has caused housing prices to skyrocket in just a short time, putting many properties out of reach of longtime residents. When the soon-to-be-transferred trainer learned about the new facility, he and his wife started looking at the housing in that area and soon after he inquired about making the switch.

While Laker anticipates more employees asking to make a similar move, he’s not concerned about the new location siphoning off his Draper employees. “Both locations will be producing from the same pool of orders,” he says. “It would actually be really beneficial to have additional experience and talent to help grow location number two.”

The company expects to hire about 25 employees at the new facility by the end of the year, with a goal of 100 or so when all is said and done. Although it hasn’t started hiring yet, Lashbrook did begin advertising the jobs a few months ago, and Laker doesn’t foresee any difficulties. “A lot of people are excited for us to be there,” he says.