Even with its steady plan for sales growth and a large addition rising next to its distribution center, an Eau Claire company recently found itself hamstrung by a shortage of warehouse workers crucial to its operation.
Indianhead Foodservice Distributor had to withdraw its new contracts this fall with two Minnesota public school districts due to difficulty filling jobs in Eau Claire.
“We didn’t have the sustainable workforce we’ve been historically able to secure to add this additional business,” Jim Kacvinsky, the company’s vice president of sales and marketing, said in a phone interview with the Leader-Telegram.
The family-owned company distributes wholesale food to schools, colleges, health care institutions, day cares, restaurants, taverns and government facilities throughout Wisconsin and Minnesota.
With its annual plan for sales growth, IFD signed contracts earlier this year with Duluth and Mankato public schools but informed them in fall that the local labor shortage meant they’d have to cancel.
“This is a difficult decision but the reality is we do not currently or in the near future have the ability to provide a level of service that is acceptable to you as a customer and IFD as a service provider,” Kacvinsky wrote in a Sept. 24 email to the Duluth school district.
The company did continue delivering food to the schools until they could secure a new vendor.
“There was no void in service, there were no children that went unfed,” Kacvinsky said.
He added that the school districts were very understanding of the labor crunch that the company found itself in as many other employers are also experiencing difficulty filling jobs.
The national unemployment rate was 3.5% last month and it was even lower — 3.2% — in Wisconsin. In the Eau Claire metropolitan area, the jobless rate was only 2.7% last month.
“We hear from employers here at the Job Center that they are having a hard time filling positions,” said Amber Hoffman, an employment and training specialist at the Job Center of Wisconsin, 221 W. Madison St.
While many people know the Job Center as a place for job-seekers to go, Hoffman said it also helps companies that are having difficulty filling their ranks.
Employers can spend four hours recruiting inside the Job Center office, participate in twice-annual job fairs and seek advice on how to attract more applicants.
The center can also connect employers with state programs used to insure workers with poor credit or criminal records and provide tax credits for hiring people who receive government assistance programs or have a criminal past.
Ten years ago companies were dealing with financial pressures caused by the Great Recession, but the challenge for many now is competing for a smaller pool of workers since the economy rebounded.
IFD has been working to keep its wages and benefits — including the creation of an in-office employee clinic in recent years — competitive to prospective workers, according to Kacvinsky. The company also uses recruitment services, employee referral programs and connections with local educational institutions to encourage people toward jobs at IFD.
But the company also is in a very competitive marketplace when it comes to supply chain workers, as it is vying for candidates who could also be considering jobs with Menards, Fleet Farm, Mason Shoes, Ashley Furniture and other companies with distribution operations in west-central Wisconsin.
Warehouse operations in west-central Wisconsin are expected to continue to see a significant amount of jobs to fill, mostly due to current employees retiring, workers changing occupations and some positions created by growth, according to state projections. Those statistics from the Wisconsin Department of Workforce Development show there are 3,942 openings annually in the top 15 occupations associated with the warehousing and storage industry in the eight-county region that includes the Eau Claire area.
Office clerks, semitrailer truck drivers, laborers and freight movers and customer service representatives topped the list of the kinds of jobs with the most openings in the industry based on the state’s projections through 2026.
Distribution and manufacturing — two industries with a strong presence in the Chippewa Valley that often vie for the same workers — are areas where Chippewa Valley Technical College is boosting some of its programming.
One of those is a four-course, short-term production technician package set to start in January, which will teach essential skills in production quality, maintenance and safety. The intent is to provide a skill set to people interested in work at a modern-day production facility, who will then become a pool of fully-trained prospects for area companies in need of them.
“We’ve heard needs from employers, more consistent needs,” said Jeff Sullivan, the college’s dean of manufacturing, engineering, apprenticeships and IT.
CVTC also has recently added a supply chain management program to address demand from employers in the Chippewa Valley’s growing number of distribution centers.
While there is a demand for labor in warehousing, distribution and manufacturing, companies are also increasingly automating where they can.
“Automated vehicles or robots are moving products that would’ve been loaded by a forklift or manually stacked,” Sullivan said.
Machines are increasingly doing jobs that fall under the categories of “dangerous, dirty and dull,” he said. But that has increased demand for people with the ability to fix and service those machines at companies that are having robots do more labor.
“We’ve seen an uptick in salaries in our maintenance and automation areas,” Sullivan said. CVTC has programs for those workers in its industrial mechanic and automation engineering technology programs.
Despite the pinch caused by a labor shortage and the two contract cancellations, IFD is continuing on its path to become bigger.
“Our long-term plan is still continued growth as an independent, family-owned business,” Kacvinsky said.
The company founded in 1947 is in the midst of a multiyear plan to expand its warehouse and office space at its headquarters at 313 N. Hastings Place.
The skeleton and metal siding of an 11,000-square-foot warehouse for frozen goods is going up next to IFD’s current buildings. In late September, the company also received city approval to expand its employee parking.