Better Business: Is Now the Time to Hire Back Employees?

Oct 15, 2010

Though the national unemployment rate hovered around 10 percent throughout the summer, businesses were hiring.

Employers hired more than 4.2 million new workers in June, up 10 percent from a year earlier when new hires topped 3.8 million, according to data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey.

That same survey showed the number of job openings also increased, topping 2.9 million in June, compared to 2.5 million a year ago.

Some of that hiring activity has been occurring in the car restoration industry. As the economy is beginning to recover, customers are bringing in more projects and buying more products.

In turn, shops are considering hiring new employees for a number of reasons, including to bring staff numbers up to pre-recession levels, to keep up with customer demand, to help the business grow or to free up current employees to focus on new responsibilities.

Back for Good

More than a year ago, Brauns – Muscle Car and Hot Rod Restoration, a restoration shop in Lomita, California, had to let go of three employees.

“We went from seven employees a year ago down to four,” said Chris Braun, shop president. “Probably the biggest hit is in the hot rods and the classic cars and restoration and build-ups, that’s not ground to a halt but it’s been severe enough in terms of the downturn that we laid off three people.”

The shop recently installed a chassis dyno, expanded its fuel mapping and fuel injection services, and has ramped up its marketing program. Customer response to these efforts has been positive, so Braun is planning to hire again.

“I see customers and potential clients calling us that [have been] coming out of the woodwork since January or February,” Braun said. “We’re starting to hear more from people and summer’s here, and that always increases the different kinds of projects that we do, so now we’re looking to get a fabricator in here, someone that specializes in chassis fabrication and the specialized welding.”

Braun has advertised for this position on Craigslist and other online job boards. He was just beginning the interviewing process at press time and was also trying to line up projects to keep the new hire busy.

“We’re kind of waiting [to hire] until it not so much reaches crisis proportion but that the work is consistently there, and we’re taking up the slack right now,” he said. “We’re working on trying to cultivate two big projects right now, and if we sign a deal on those two things, then I’ve got enough work for a year-and-a-half, so that would go a long way toward increasing my comfort level of having a [new] guy here.”

Braun foresees adding a new employee will have many benefits for his business.

“Less frustration on my part, better balance in the employee talent pool and better division of the work,” he cited as some of the advantages of hiring a new worker. “Economies of scale are working there when you get someone that really knows what they’re doing in a certain area, the network moves faster and your profit’s better, your charge time is correct and it just makes sense.”

Growing On

Precision Restorations, a restoration shop in St. Louis, recently hired two body technicians to keep up with production due to an uptick in sales, according to the shop’s owner Dale Oestreich.

The shop is also planning to hire a mechanical technician.

These new hires will help keep the shop on target with production, said Oestreich.

Before starting the search process for new employees, Oestreich and his management team create a detailed job description for each position sought.

“We have it clearly outlined what the position is that we’re looking to fill, what the requirements would be and what we would like that individual to look like in terms of qualifications,” he said. “Then in the interview process, we try to match up what the requirements are of the job and how the candidate fits.”

Oestreich has found it challenging to find ideal candidates. It took the shop nearly two months to make its last hire.

“I know it sounds counter-intuitive because of the economy, but we really do believe our particular type of business or industry attracts a very specific type of individual and the pool is not [as] great as some people might think,” he said. “A technician that’s qualified to work at a new car dealership, for example, we don’t see him as necessarily being a good fit for what we do with restoring old, classic and vintage vehicles.”

Oestreich has been satisfied with the hires he’s been able to make and with his shop’s ability to integrate new hires with current staff.

“I think some employers have a   tendency of hiring, thinking they’ve got the right person and just more or less throwing them into the position but not closely managing them for the first 60 days,” he said. “What we have found [that] seems to work pretty well for us is to make sure we don’t hire them and [then] in 60 days sit down and say, ‘You’re doing OK’ or ‘You’re not doing well.’ We hire them and we work very closely with them over that whole period of time.”

Doing that helps Precision Restorations overcome what Oestreich sees as one of the biggest challenges of hiring.

“When you bring on someone, it sometimes doesn’t turn out to be the right fit,” he said. “We want to try to avoid bringing on somebody that isn’t a good fit for our organization.”

Selling Savvy

Freedom Street Rods in Atascadero, California, went through a series of staff reductions during the last three years.

“About three months after I was hired, we started eliminating certain people that were not detrimental to the company, so we decided [to hang] on to two of the employees [and] got rid of two,” Chris Silva, store manager for the restoration parts retailer, said. “Then it was four of us working here, then it got down to just two of us and then it got down to just me.”

Silva and the store’s owners began to restructure and refocus the business, having more product on-hand for its do-it-yourself customer base and ramping up its marketing efforts. Eventually, Freedom Street Rods added one employee and is now planning to hire one or two new salespeople.

“Because our sales are up and we’re launching our new website, it’s going to take about two people to man it from our calculations,” said Silva. “We send a lot of stuff out, we have an ad on TV and we also advertise in magazines. We get calls all the time from people that have seen our web-site. The new person we’re hiring is going to be doing a lot of inside sales and customer support on our website.”

Silva had poor results when he placed helped-wanted ads in the past so now relies on word of mouth to bring applicants to the store. This has attracted quality candidates from outside the restoration industry.

“The woman who works with us was with Southwest Airlines for years, but she adapted because if you can do customer service in the airline [industry], you can do it anywhere,” Silva said.

“That’s why I think people need to look outside that box,” he said. “Don’t stereotype [and think] that the guy or girl has to have knowledge of hot rods, because someone that’s sharp enough, they’ll pick it up, especially on the retail end of it.”

Silva believes hiring these additional salespeople will help the shop’s sales continue their upward climb.

“I’m hoping for another 20-“30 percent increase in next year’s sales because of it,” he said. “I’m leaning toward 20 [percent], which is a light number, but I think it’s a [realistic] number, I think it’s going to impact [sales] much more.”

A Helping Hand

Business has been booming at Performance Plus Connection, a small retailer of electrical components, ignitions and tools based in Charlotte, North Carolina, so the business is now in need of a data entry specialist, a task its president has been handling to this point.

“I don’t have the time anymore because we’re getting busier,” said Vince Coscia, president of the company. “I’ve been entering and keeping inventory straight [and] recording all of the transactions.”

Coscia is initially looking for someone to come on part-time. Having someone on staff to do data entry will give Coscia more time to focus on advertising and further growing his three-year-old, two-person business. He’s considering increasing his international sales by exporting his parts in bulk. Even after he hires a new employee to take on the data entry duties and free up his time to focus on growing Performance Plus Connection, Coscia is planning on measured growth for his business.

“I’m almost afraid to grow it too fast because I’ve already more than doubled what I did last year,” he said. “That’s one of the reasons why I need to hire somebody,” said Coscia. “[It] will free me up to do more things to increase business.”

Making Hiring Easier

Government agencies and the private sector have launched various programs to encourage businesses to hire new employees.

One such program is part of the federal jobs bill that was enacted in March. The program exempts all businesses that hire a worker who has been unemployed for more than 60 days from paying the 6.2-percent employer share of Social Security payroll taxes, according to SEMA, who supported the bill.

If the business retains the new employee for one year, the employer is then entitled to a one-time $1,000 tax credit for each eligible worker.

For more information, visit www.sema.org/government-affairs.

A second program is being offered by Chase.

The bank will lower its interest rate on a new Chase Business Line of Credit by half a percentage point for each of up to three new hires for the life of the loan. The offer is available to business owners who are approved for a new Chase Business Line of Credit up to $250,000 or existing business customers who increase their line of credit by $10,000 or more.

For more information, visit www.chase.com/loanforhire.