The promo industry thrives on its people, but good people aren’t always easy to find. Here’s how the industry is dealing with staffing issues ranging from lack of skilled labor and aging out of veterans to filling leadership roles and developing exit strategies.

by Joseph Myers
February 2020

This year marks the 55th year that PPAI Research will conduct an intensive look at the overall health of the promotional products industry, and when the group releases its latest findings, everyone should expect for distributors to breathe easily once again. After all, upon the disclosure of the most recent report, those individuals celebrated $24.7 billion in sales, a total that registered as a 6.27 percent hike on the previous year’s haul. Since significant gains have become an annual reward for their hard work, distributors and their supplier partners have many causes to continue to feel confident, but, as we know, no professional journey is without speed bumps. Therefore, like everyone else, industry companies must often tackle issues far greater than the typical day-to-day nuisances that creep into their operational procedures.

Perhaps the biggest of those issues: people. This industry revolves around people and relationships. It’s what makes things go. But, of course, with people come various challenges—finding skilled labor, filling leadership roles, forming concrete exit plans when business owners begin to age out and more. This year figures to be a pivotal one in these areas, as industry companies look to solidify their businesses through strong staffing and personnel decisions. And, where applicable, give their peers advice on how to retain what Tom Miller, president of T R Miller Co. Inc., Walpole, Mass., dubbed “their piece of the carrot.”

Along with Miller, whose company checked in at No. 59 on Promo Marketing’s 2019 Top Distributors list, we had a chance to connect with Nate Robson, director of business development for Raining Rose Inc., Cedar Rapids, Iowa; Lisa Bascom, president/owner of Brooklyn Products International Inc., parent company of AmeriFoam - The House of Foam, Brooklyn, Mich.; Barbie Winterbottom, chief people officer with BIC Graphic, Clearwater, Fla.; Jeremy DeBoer, general manager with Savi Customs, San Diego; and Jamie Watson, partner at Certified Marketing Consultants Ltd., Huntertown, Ind. Through them, we gained even more appreciation for not only the scope of the promotional products industry, but also the people-first mentality that drives the industry’s customer-centric approach to greater heights. It is also their contention that such a mindset will enhance the standing of promotional products no matter what other challenges the industry faces. Of course, that all depends on finding the right people.

STAFFING CHALLENGES
According to PPAI’s 2018 Promotional Products Fact Sheet, more than 40,000 companies employing close to 490,000 people comprise the promotional products industry. When we combine the promo and branded apparel realms with the sphere that print service providers (PSPs) inhabit, it becomes clear, though, that other digits and computations factor in, too, as businesses plot their futures. A study by Printing Impressions, one of Promo Marketing’s sister publications, analyzed PSPs’ obstacles in “attracting and recruiting qualified job candidates with the necessary skills to support operations.” Statistics from that study, titled “Recruiting and Retaining Workforce Talent,” have great relevance to promo, as the two industries overlap in several areas and share much in common. Among a plethora of interesting details, the following findings call for consideration as promotional products professionals, like their PSP contemporaries, look to fill their ranks with the cream of the crop:

• Survey respondents expect that, on average, 21 percent of their skilled workers will retire in the next five to 10 years. At the same time, respondents report high employee retention, as more than half say employees remain with their companies for more than 10 years.

• Close to 60 percent of survey respondents face a difficult task in finding qualified and skilled production employees to fill open positions. In rank order, the most significant factors affecting most respondents in their ability to fill their staffs are a limited applicant pool, perceived lack of interest in the industry among potential employees and access to workforce talent.

• About one-third of respondents have a formal strategy in place to recruit and retain production employees, and slightly more than a third said they lack one.

• Eighty percent said they consistently or occasionally find it hard to fill production positions, with securing sales personnel a challenge for 66 percent of respondents.

• Sixty-one percent of respondents said they had relied on asking employees for referrals.

• Thirty-eight percent of PSPs in the survey offer in-house training programs, and 53 percent present cross-training programs to address worker skill shortages. However, the study found that not even 20 percent of respondents invested in creating means to ensure skill transition and knowledge transfer from an older, experienced generation to a younger cohort of workers. The study notes that one explanation for that last figure might be that the increased reliance on digital business applications has made veteran workers’ skills “less required.”

How are the circumstances behind those statistics and others within the study directly relevant to the promo world? For Winterbottom, the most nagging barriers to securing the absolute best hires are largely dependent on the type of position that someone is seeking to fill, with having a robust pipeline being a far greater fate than wading through a weak one.

“For some areas of the business, a key to this challenge is understanding [psychologist Abraham] Maslow’s [hierarchy of needs] theory, and if basic needs—financial, transportation, etc.—aren’t met, you cannot be successful at filling the roles and keeping talent within the roles,” she explained. “I believe this industry is going through a total metamorphosis adapting to talent, and what is now typical churn among hourly workers is certainly a pain point, but not unexpected. Finding creative solutions to meet the needs of these workers can help with sustainability and retention.

“For example, we have a daily pay option, allowing workers access to any earned, but unpaid, wages at any time,” she continued. “This allows employees more control over their financial life and, in many cases, keeps them from hardship solutions. For other areas of the business, a work/life balance is extremely important, so ensuring convenience plays a part in what we offer to employees, such as mobile car detailing, among other things.”

Winterbottom’s thoughts offer a rebuttal to the increasing use of automation within the business world and support a comment from John Shanley, president of Labels West Inc., Woodinville, Wash., who, in a recent profile for Print+Promo, Promo Marketing’s sister publication, said that “the human side of our business will always be our primary competitive advantage.” People will always prefer their own efforts to those of machines and devices, but what are the keys to aligning one’s commercial vision with their occupational pursuits? Winterbottom again presented helpful insights.

“With record low unemployment, finding the best talent, in general, is always a challenge,” she said, making a point with which Robson, DeBoer and Bascom wholeheartedly agreed. “We have found that casting a very wide net and leveraging the power of social media is keenly important to filling jobs across all our geographies.

“It is also important to understand the type of work and worker you are seeking,” she added. “It is not a one-size-fits-all scenario. Clearly defining the skills and job expectations and then understanding that there are many types of people who can learn the skills necessary to do the work is key. Today’s workforce, in general, is not seeking lifelong employment as in generations past, so identifying a realistic life-cycle of an employee is critical to understanding proper labor planning and recruitment strategies.”

Rather than lament the present workforce’s reduced commitment to decades-long careers with the same employer, today’s executives should let their businesses’ cultures be a major influence on their hiring practices, Robson holds, and should foster their identities constantly, especially since everyone is looking for that competitive edge.

“I don’t approach the candidate pool with the expectation that [members of it] see a five-, 10-, or 20-year career,” Robson said. “Rather, I stay focused on determining if the candidate will positively impact the culture and have the ability to make significant contributions to the work being done. If those are true, it generally results in a long partnership.”

Last month, Raining Rose, Robson’s employer, made two notable promotions that expanded its executive team. Like other locations, though, Raining Rose has, according to Robson, needed on occasion to look to third-party assistance and outside of its region to find the right fit for positions. This could be a good option for some promo businesses, particularly since these hunts could yield better laborers than customary approaches might. Reiterating the strength of a well-formed culture, Robson noted that such a blessing can “make you the employer of choice.” Other best practices include incentivizing current employees to refer colleagues and friends—a method that we mentioned in our earlier citation of the Printing Impressions study—and leaning on technology to satisfy business needs.

“Given that there are so many employers seeking to hire from a small pool, competition is fierce,” Robson said. “Balancing the flexibility that individual candidates desire with the consistency needed to be efficient is challenging, but a must. With the rate at which roles and systems are changing, the mastery of certain skills and tools needed to be successful has created a skill gap. It can be difficult to get the expertise and know-how you need. Outsourcing can be a solution here to fill in some of those gaps.”

SKILLED LABOR
Based on our sources’ estimations thus far, could we argue that job seekers have a leg up on companies in determining who will be earning a living at a particular place of employment? There are many factors involved in answering that question, with all of them ultimately dealing with appreciating the necessities that sustain workers’ welfare, and the prolonged vibrancy of the industries they choose and the audiences they serve. Bascom, noting that unemployment has hit an 18-year low, explained that candidates will pick and choose until they find the best environment for themselves, with that attitude being an opportunity for companies to run on their records of establishing consumer satisfaction to attract them. Even that solid history, though, could still leave businesses in a bind.

“Quality health care and solid 401(k) plans are attractive offerings,” Bascom said of ways to combat her assessment that finding candidates to grow one’s team “is tougher than ever.” “Increasing salaries just causes another problem, due to increased product pricing to your customers.”

While not always feasible simply because of the risk of burnout, teaching new skills to current workers stands as another option, but one wonders how many promotional products industry businesses are taking that plunge or would be willing to institute that measure. As Bascom also stated, money, generational differences, education, leadership depth and resources all have their place as possible deterrents to making solid hires.

What, then, is the overall status of promo staffing? If companies are doing so well as a whole, how, one might argue, are any of their employees struggling, and how are they struggling to find employees? Does the industry find itself at the most crucial stage for strengthening its businesses because of the generational skillsets that employees bring and the overall business world’s fixation on constant improvement? Owing to his expertise in dye sublimation decoration and short run apparel, DeBoer confided that although automation has assisted with Savi Customs’ layout and prepping process, hiring skilled sewing operators remains the crux of garment manufacturing and decoration.

“If you currently look at the average age of a sewing operator, from my experience, it seems to be 40 to 60 years of age,” he said. “This makes the longevity of any manufacturing business that uses sewing unsure due to the timeline of their employees’ retirement. I would love to say that our youth were being trained in this field, but, as we know, being a production sewing operator is a declining skill that younger people just don’t strive for. Since the outlook on this specific skill is very unsure [for 2020], we will be looking into a training program to help get the next generation to realize that sewing is a needed skill that has a use in our growing industry.”

Along with that position in the apparel trade, which other job roles in the promo world are becoming difficult to fill in the promo world? As Promo Marketing reported last February, the Department of Labor’s Bureau of Labor Statistics abandoned the listing of “printer,” “screen printer” and “support activities for printing” as officially tracked positions, a move that led Michael Makin, president and CEO of Printing Industries of America, to dub the data “irrelevant” and not respectful of the stance that “Print has [continued] and will continue to evolve as a media” and the contributions of “approximately 800,000 workers in the printing, packaging and publishing industry who go to work every morning knowing that their jobs are relevant to the nation’s manufacturing economy.” So, it becomes paramount to explore how, despite challenges, every person holding a position in those fields can feel validated. There is certainly a level of personal responsibility that makes the endeavor easier, but the overall task lies with their employers, who should always take that responsibility seriously, especially as that role relates to the concerns of older workers.

“Understanding the needs of the aging worker is critical, as is looking for ways to retain them for as long as they wish to work,” Winterbottom said. “We are looking at part-time work opportunities for many of these well-trained, dedicated employees who still want or need to work, but perhaps not on a full-time basis. We are also reinventing our training and onboarding programs to allow for a robust, consistent knowledge and learning transfer to new hires. Additionally, we are reinventing many of the platforms and technology used within the organization. This can be a benefit to new hires, who are typically familiar with new forms of technology, so their learning curves are swift.

“Where the learning is slower is in scenarios where there isn’t standard work or the ability to create an absolute,” she continued. “In the promo industry, there are innumerable variables with each order, and, therefore, individual judgment is critical. Developing the skills and senses needed to practically apply individual judgment is always going to take more time than learning a system or a tool. Leveraging our tenured workers to train our new workers is key to making this happen. Even in these scenarios, however, there is an opportunity to apply a consistent practice of how we expect our people to apply independent judgment versus guessing and potentially making a mistake.”

Many individuals might find, in helming their business, that they rely on too many reflections of “the good old days.” In the hopes that everyone remains sustainable, Winterbottom expressed the importance of confining those occasions to memory banks, stressing that “understanding buying behaviors and expectations and focusing on both the distributor and end-user experience are crucial.”

“[People must] accept that in order to scale a business and adapt, there must be a people/process/systems approach to all decisions, and no decisions should be made in a vacuum,” she said. “All functional areas within the business must be equally involved and work collaboratively to meet customer needs and ensure ongoing alignment and perspective.”

AGING OUT
Especially with the dawn of a new decade, companies are working hard to propel themselves to greater success, and numerous elements constitute that quest. One of those is the transition of businesses from one owner to the next and the departure of tenured individuals that often prompt such tough decisions.

“I think the aging out of veterans in this industry highlights that distributors and suppliers must understand the changing needs of their audiences,” Robson said. “The distributor landscape is changing quickly with the influence of technology, consolidation and [the] evolution of B2B buying behaviors. What is taking shape are new organizations who approach the market in very different ways. As a supplier, it is becoming more imperative to choose what audience you support and best tailor your products and services to that audience to be a cut above. There will be a point where it will become too costly to support all distributor models out there, and if you try, you will be mediocre at best.”

When considering a change, according to DeBoer, one always has to be cognizant that he or she is not passing down only customers but also the way that a business works and runs. With the pace of change, frankly, companies who have a poor transition plan or who have made limited attempts to think one through run the risk of never transitioning. As Robson sees it, either a lackluster strategy or the lack of one altogether could mean that businesses could miss the boat for a fruitful acquisition, a strategic merger or a legacy ownership change. Here, then, is where people like Miller and Watson excel, as their companies ensure that nobody’s sacrifices and successes become relics, with the former doing so as a side element of an already prominent distributorship.

“Pondering an exit strategy is difficult in any environment,” Robson said. “While the industry is ripe for consolidation and we are seeing mergers and acquisitions on both the supplier and distributor side, the difficult part is the valuation. What do you have to sell, named and phone numbers or contracts, programs and services? I think the intimidating part is how do people make sure they are building assets and tangible value into their company before going to market. If the plan is to pass the company on to a successor, finding someone to take on that risk can also be difficult. Many of the businesses in our industry are in need of massive change in infrastructure, technology and skillset.”

With respect to exit strategies, we appreciate the I’ll-work-until-I-can’t-any-longer position that many business leaders adopt and master, but time is undefeated and, even as you read these words, it is making someone consider the future of his or her business. For many individuals, Miller included, family will be there to take over when they step aside, but genetics do not make matters simple for everyone. The aforementioned carrot that the Massachusetts-based distributor wants for everyone to retain need not become a gnawed remnant of glory days if leaders give their industry peers the same gift that they endow their employees with—namely, trust.

“In a best-case scenario, a client comes to us three to five years before they are actually exiting the company so we can help them establish value and lay out a timeline that shows how much value they can expect to receive for the company and when,” Watson explained of Certified Marketing Consultants clientele, who are usually company owners looking to sell to an outside party. “We can also help them mitigate any circumstances that might be detracting from the company’s value or limiting the buyer pool. We always perform a valuation, which is the biggest step toward selling a company, and can open the eyes of the owner and increase awareness of what needs to be done to prepare for the next chapter.”

Working only in the promo industry, Certified Marketing Consultants prides itself on keeping companies from suffering disruptions to the key elements of what sets their businesses apart, mindful that many are wary of change and of letting go. The uniqueness of each situation compels Watson to tell clients to be flexible when taking in Certified Marketing Consultants’ advice and to stay open-minded as the process unfolds and the future of one’s enterprise remains solid. “Succession planning and exit strategies have always been a very important part of our advisory services,” she noted. “But as the Baby Boomer generation starts to retire, we are seeing an increase in activity.”

Miller belongs to that aforementioned cohort born between 1946 and 1964, but the septuagenarian has “a lot of energy left” and is doing quite well in overseeing his business. Excelling in the financial, logistics, insurance, consumer packaged goods and beverage verticals, T R Miller Co. Inc. enjoys industry renown by itself, but Miller is not obsessed with adding dollars to his coffers. Rather, he finds himself eager to help other entities maintain their might when their leaders call it a day.

“I want people to retire with trust that they’re leaving their operations to people who care,” he said of what he has affectionately christened as a retirement program for small distributor companies. “If you want to move on and lack people who know everything about your mission, the experience will never be matched, and, yes, regret is bound to seep in.”

T R Miller Co. Inc. has amassed an impressive list of clients, owing to Miller’s savvy, and that record helps him and his hires strike deals with businesses experiencing transitions that allow them to receive significant and distributed compensation as a payout for investing trust in the Massachusetts distributor. Gross profit percentages further the allure of helping retiring owners believe they are making yet another firm investment in their future, with Miller’s assertion that “we are an aging industry” certainly not the death knell that many might expect it to be, especially given this article’s examination of hiring burdens.

“Businesses are always working hard to create happy cultures,” Miller said. “It’s common, therefore, to think that someone’s retirement is going to disrupt that. We have become known for picking up the pieces in that respect. People sign up to work for companies that mesh with their identities. That thinking can’t stop when the person or people who hired them move on. We’re set on giving people a win-win situation when they come to us, and it’s a delightful responsibility to say, ‘I will help you keep your dream alive.’ This is such an impressive industry, and while there are always going to be bumps in the road, there’s usually a reliable way to smooth them out, because everyone involved in this business wants to make it work for everyone.”