Changing Tide

Posted on Apr 1, 2010 :: Up Front
Posted by , Insight on Business Staff Writer

Russ Davis is optimistic. After a rough 2009, the marketing director for Oconto’s Cruiser Yachts and Rampage Sport Fishing Yachts is excited to see orders coming in, which means the company was able to call back 100 laid off workers.

“Our international sales are doing very well because of the good exchange rate going on,” he says. “We are looking forward to this summer when we release the 2011 models, since that will draw more interest and hopefully more buyers.”

Davis predicts the company will continue to hire back employees as more orders come in, but adds it may take years to get back to the company’s one-time employee count of 700 employees. “Sustainability in the marketplace is important. You don’t want to bring back workers only to find that the demand doesn’t continue and then you need to let them go,” he says.

Cruisers Yachts isn’t alone in adding to its employee count. Many companies throughout the New North are bringing back workers who were let go in 2009 as the economy sputtered.
Gardan, a contract assembly and packaging supplier in Hortonville, is another Northeast Wisconsin company calling back laid off workers as business increases and optimism is running high. John Dennis, sales engineer for Gardan, says several workers have been called back to the small business as orders come in from new customers and current customers increase their output.

“We’re taking a slow, steady approach in calling people back,” Dennis says. “You don’t want to bring people back, only to let them go again.”

Dennis says as business plunged in 2009, the company took a look at what it was doing and began seeking out new markets and customers. “We spent a lot of time strategizing. We hope that pays off and 2010 is a great year,” he says.

De Pere’s MEGTEC Systems Inc. has called back 24 welders and fabricators since the start of the year. MEGTEC is a design, engineering, manufacturing and services company that produces industrial equipment. Like Gardan, the company saw business pick up and brought back workers to help fill orders.

“We recently received orders for equipment for the renewable energy markets as well as our traditional printing and packaging markets,” says Mohit Uberoi, president and CEO of MEGTEC. “We’re glad to be able to bring our skilled workers back to our plant. The gradual economic recovery of the markets served by our products helps MEGTEC and the local community.”

While antidotal evidence shows a rebound in hiring, official employment numbers are still lagging. For December – the latest month available – the unemployment rate was 8.3 percent, up 0.4 percent from November.

But while unemployment numbers are still high, more employers have indicated in surveys they want to add workers in 2010. The Fox Cities Business Economic Outlook Survey, which was conducted by the Fox Cities Chamber of Commerce in January, found that 40 percent of area companies expect to expand their workforce in the coming year. Fifty-six percent indicated their numbers would stay the same.

Another employment outlook survey, done by the Milwaukee-based staffing firm Manpower, found that 72 percent of businesses plan to keep their employee counts steady through the second quarter of 2010. Another 14 percent expected to add workers while 8 percent planned to cut back.

“U.S. hiring activity is still in neutral, but revving toward first gear,” says Jonas Prising, Manpower president of the Americas. “It’s moving in the right direction, but it will take some time, with no major speed bumps, before it can accelerate.”

Manpower’s forward-looking indicator provides an economic snapshot that is unavailable from monthly government data, which looks backward at each month’s developments so it’s a sign of what may be coming in the next few weeks.

Besides surveys, the pace of business at temporary staffing agencies can also be seen as a barometer of the job market. If companies add temp workers, that can be viewed as a sign they are seeing an increase in business, but aren’t quite ready to commit to a permanent hire. If requests are down for temporary workers, that’s a sign that area companies are seeing a decline in business.

Monica Vomastic, president of Landmark Staffing in Kimberly, says demand for temporary workers has risen since mid-January.

“Many businesses want the flexibility to add staff now to support growth, but are cautious on extending permanent hire offers. The demand for temporary staff is across various industries, with manufacturing and health care taking the lead,” she says. “The recent increase in staffing activity has been promising but sustainable growth is the underlying question we hear most from local business owners. Everyone continues to be optimistic, but conservative about permanently expanding their workforce.”

Vomastic has seen an increase in the number of employers who need someone to immediately start in a job.

“With the recovery in its early phase, there is a window of opportunity and clients are being proactive in seeking support staff. They realize their managers have to spend more time on results that promote growth and less on administrative work,” she says.