Largely staffed: 100 largest companies in Dane County
In an improving local economy, Dane County companies employ a variety of methods to determine when it's time to expand their payrolls.
From the pages of In Business magazine.
How do Dane County’s largest employers determine when it’s time to grow their workforces? In a variety of ways, according to executives at companies that perennially make our listing of the largest Dane County employers.
With the Great Recession fading in the rearview mirror, Dane County’s May unemployment rate was only 2.9% — 3.3% in the preliminary estimate for June — and the state of Wisconsin as a whole is finally creating a healthy number of new jobs with nearly 50,000 in the one-year period from June 2015 to June 2016.
In an improving local and state economy, how do the private-sector employers on our Largest Employers list determine when it’s time to scale up — and how much? Is it a sharp rise in billables or do they rely on certain economic indicators?
We present several companies who are among Greater Madison’s largest employers and we interviewed executives from each who have added to their payrolls in the past year, including Epic Systems, American Family Insurance, Electronic Theatre Controls, Promega Corp., and Stoughton Trailers. Their insights demonstrate that when it comes to beefing up the payroll, different employers look at different things.
Special mention goes to Exact Sciences, which after an up-and-down year rose 30 spots in this annual ranking.
(For a complete listing of the 100 largest companies, check out the September 2016 print issue of In Business magazine.)
The workforce impact of American Family Insurance’s recent emphasis on entrepreneurism and innovation is not lost on Jim St. Vincent. True, it’s led to acquisitions of synergistic emerging companies and a more active venture capital program, but it’s also alluring to prospective employees who admire an established company’s willingness to “disrupt itself” rather than wait for the market to do it.
To St. Vincent, vice president of human resources, this self-disruption is about adaptability because, as he explains, “we’re now experiencing the slowest rate of change that we will in our lifetime.” Therefore if the company waits until billables spike, it’s probably too late to add staff. “You’re already behind the eight ball,” he states. “Then we’ve got to quickly hire people and get them trained, and we really don’t have time to do that.”
What it does have time for is anticipating the needs of the business, not only for the next year but also for the next five years. “We’ve paid close attention to our strategic plan because that helps drive us,” Vincent explains. “Then we take a look at our workforce because we know our average retirement age and we know where they’re located so we can anticipate the natural turnover that will occur with retirements.”
American Family also tries to anticipate the need for new business functions. In recent years, it’s added functions such as a data science and analytics lab, where data scientists help develop new products and respond to emerging trends. “We’re trying to anticipate where the market is going,” St. Vincent says. “If you think about the future possibilities of driverless cars, what does that mean for the insurance industry five, 10, or 20 years out? Where does that put us? What’s the risk to the person?”
To address such questions, American Family is also thinking about future staffing. A year ago it conducted a multivariant analysis of prospective employees, going to 10 universities to glean what’s important to them. The answer: flexible work schedules that accommodate personal priorities.
“We looked at our value propositions regarding the employee experience,” he states, “and we’re spending more money on it.”
Electronic Theatre Controls
When it comes to building and maintaining its workforce, Electronic Theatre Controls, an international producer of theater lighting systems, is looking for every advantage it can find. Witness its new Employee Stock Ownership Program, which gives job interviewees something to think about.
“It helps, sure — every advantage you can get,” states ETC President Dick Titus. “In this particular case, the competition is everybody in Madison, not necessarily our markets.”
Workforce planning begins in the fourth quarter when ETC prepares its next budget, which is largely based on how it’s performing in the U.S. markets. “We will set a number and maybe it will be 5% or 7% more than this year’s budget,” Titus explains. “Based on the revenue, it dictates some of the staffing levels because some departments are based on revenue and some are not.”
The company also has a strategic plan with strategic goals that in some cases require more staffing. “As you can imagine, manufacturing is more reliant on revenue, and marketing is more reliant on our strategic goals for the next year.”
ETC then creates a budget based on zero workforce growth and estimates what profitability would be. Based on that, it determines which positions to add to the budget and staggers those positions. “We would have some positions released in each quarter that add to departments that made the requests.”
Some revenue is based on large projects and some is derived from people ordering lighting, or box product. Since ETC sells box product and entire lighting systems, there is always a combination of long-term and short-term shipments.
Staff additions are considered placeholders until actually filled. “Things change,” Titus notes. “We provide flexibility for the various department heads to change their mind and reprioritize.”
Then there is turnover. As people leave, ETC reevaluates their positions to make sure it’s not blindly replacing them.
Economic indicators are reviewed throughout the year. “The price of oil affects us because as the price goes down, the Russians buy less,” he explains. “As the price goes up, it’s harder for the Chinese to get their products here in a cost-effective manner.”
When it comes to sprouting its workforce, Promega Corp. can point to product-development seeds planted in the past. The Fitchburg-based company makes more than 3,000 products for scientists in the life sciences, forensic science, and molecular diagnostics, and primarily supports medical research and therapeutics.
It also harvests from the identification of emerging markets. Twenty-five years ago, Promega projected human identity, its forensics line, as a growth market. At the time, there was no market anywhere in the world for such products, but today forensics represents nearly 20% of Promega’s business. “We’re always looking for opportunities that may be small, but over the next five to 10 to 20 years will become a larger part of the company’s business,” explains Bill Linton, president and CEO.
According to Gayle Paul, manager of human resources, building the workforce starts with an assessment of need. That need can be defined in all sorts of ways based on what’s coming, what’s changing, or what people are facing in the present day. Promega has a process that helps it flex with the team and business needs, as well as its financial momentum. It has a number of steps including:
- Taking a look at financial trends and the overall hiring environment;
- Defining the specific needs of the new role; and
- Reviewing the proposal through the perspectives of management, human resources, and finance and accounting.
In addition, Promega doesn’t only hire when it’s stretched to capacity. It hires to add new capabilities that complement growth. The company also conducts an occasional “opportunity hire,” which means it has the option to hire unique talent and expertise whenever the need arises.
The company’s annual bioethics forum and other programming attracts people from all over the world and makes a good impression as attendees tour campus buildings and amenities. Promega also gains positive exposure from potential workers with community engagement at events such as its Summer Art Showcase.
“I hear all the time about people trying for two or three or four years to get a job in the company because they see it as a company with values that they align with and as a place that’s going to be here for a long time,” Linton says. “Those are all factors that have worked in our favor.”
Addition by addition
Epic Founder and CEO Judith Faulkner likes to keep things simple, at least in terms of adding staff, but while the method is simple the result is the addition of hundreds of new employees on an annual basis.
In the past year, however, Dane County’s largest employer has outdone itself, building its staff by 1,300 workers, almost doubling the average of 700 in prior years. The medical software developer founded 36 years ago with one-and-a-half staffers now reports 9,400 employees, and when it will hit the proverbial workforce wall is anyone’s guess.
Epic tries to predict 12 months in advance how many new health care organizations will join it, and then it evaluates how many additional staff, if any, that will require. If that sounds simple, you’re not hearing things.
“That’s the basics of it,” Faulkner notes. “We have to figure how many staff are coming off other projects and how many new projects are coming up — and usually we do know this information months in advance so we can plan for both implementation services and technical services.
“We also figure out ahead of time what new development projects we’re going to work on, how many people that will take, and whether or not we need more software developers, quality assurance staff, and technical documenters. If we hire more people in the areas above, we’ll need more internal support staff such as administration, culinary, accounting, facilities, and others.”
No single area of business development is primarily responsible for the workforce increase of the past year. In recent months, Epic has lost out on some lucrative contracts — including a U.S. Department of Defense bid and the U.S. Coast Guard renewal — but it continues projects for clients such as the Mayo Clinic, which is in the process of implementing Epic’s electronic health record and revenue cycle management systems.
Epic, which will train more than 45,000 Mayo personnel in advance of a 2017 launch, now generates an estimated $2 billion in annual revenue and says 190 million patients have a current electronic record in Epic.
“No one area,” Faulkner notes when asked what explains the most recent workforce surge. “No single customer.”
Stoughton Trailers, a manufacturer of over-the-road transportation equipment, has always been a harbinger of economic trends. When the economy is booming, the need to transport goods results in brisk sales. When the economy falters, things work in reverse, as they did in 2009 when in response to the Great Recession, Stoughton Trailers cut its staff down to 250 employees.
“At that point you’re not cutting into the muscle, you’re cutting into the bone,” notes President and CEO Bob Wahlin.
The company has built back up to nearly 1,500 employees overall in Dane, Green, and Rock counties. Although Wahlin would never claim Stoughton Trailers is recession-proof, he believes the company has diversified enough to smooth out the lumps.
The company was basically just a dry freight producer. Now it’s developing specialized products, adding furniture vans, and recently launched an operation at its Evansville facility for specialty trailers, drop-floor trailers, and very highly specialized dry van equipment.
“For us, it’s almost simple,” Wahlin explains. “When the economy starts to dry up and purse strings start to tighten, people will pull back on purchasing goods that are typically transported by dry-freight brands. That might be large TVs, furniture, or any number of things, but what is not nearly as volatile is food and beverage. Even in a recession they are going to continue to buy food and beverage, so we’re expanding into refrigerated trailers, grain trailers, and livestock trailers, and we’re taking some of that volatility out of our business.”
Unfortunately, the company doesn’t often get a great deal of visibility into customer needs, which impacts workforce planning. They are not placing orders years in advance and only toward year’s end will many larger fleets place their orders for the following year.
So Stoughton Trailers relies on various economic indicators. “Any planning that we have to do beyond a 12-month lead time, we’re looking at different trends such as gross domestic product trends,” Wahlin explains. “If you break that down a little bit further, you’re looking at things like industrial production and freight, retail sales, auto and light truck sales, home starts, what’s going on with natural gas and oil, and inventories.”
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