Sheet metal fab
At Pro Metal Works, incentives boost company culture.
Ask Tom Carroll, 54, about the success of Pro Metal Works, his sheet metal fabrication company, and like many top executives, he’ll credit his 48 employees. But a couple of employees who reached out to IB proactively might flip that script. It’s the family atmosphere, they report, and Carroll’s ability to connect with his employees on a personal level — be it instructional or financial — that makes the difference.
Whatever the cultural magic, it’s working.
Pro Metal Works celebrated its 25th anniversary in February. Like most companies in this post-COVID economy, it has its share of hiring issues, but for the most part, this manufacturer boasts staff longevity of over 7.6 years, even with five new employees. Carroll shared his thoughts in a recent interview.
Congratulations on 25 years! Tell us a little about Pro Metal Works.
We are a sheet metal fabrication job-shop, mostly for commercial jobs. We do prototypes and small run-ups to very high-end production. Our customers are all over, but the majority are located in Wisconsin. We started in a small 4,000-square-foot garage behind Rex’s Innkeeper. Now we’re in a 70,000-square-foot facility in DeForest. When I first started, I had to purchase used equipment. Now, everything is state-of-the-art — and clean!
What about revenues and goals?
When we first started, our total sales were $292,000. Last year, we did $18.8 million. In terms of growth, I really don’t want to get so huge that we lose touch with our customers. I want to continue our great rapport with them, do what we promise, and deliver parts on time.
Your employees think very highly of you. That’s quite a feather in your cap! What’s your take?
I used to be in sales where if you didn’t sell, you didn’t make money. I’m very competitive and value quality employees, so we have incentive programs here to put extra cash in their pockets, which has really helped us excel.
The big word in this industry is DPPMs, or defective parts per million. There’s a calculation, but basically, our annual goal is to have an overall DPPM of 250. [Normally job shops are in the 1,000 to 3,000 range.] I created an incentive program so when our DPPMs fall between zero and 250, every employee gets a $750 bonus. If our DPPM comes in between 251 and 500, they get a $500 bonus. Last year was our biggest and busiest year. We shipped 2,046,173 parts and a total of just 689 were rejected. We ended up at 337 DPPMs, which is just unheard of!
So, I’m taking care of my employees, but they’re also taking care of me because in this industry, if you make one big mistake and it gets to your customer, you can quickly lose that customer.
Extra cash is a powerful motivator. What else?
Everyone here knows that safety is number one and quality is number two, so I give out safety bonuses. If you do your job safely, you may get another $250 if we’ve had no accidents. I’ve been able to give this bonus out every year since the incentive began.
Your employees credit the family atmosphere. What’s your secret sauce?
We participated in the PPP loans during COVID and alternated first and second shifts week by week. I didn’t want to lose my employees! Originally, I wanted nothing to do with taking government money because there’s always a catch, and the rules kept changing. I gave it all to my employees and advised them, like a dad I guess, to bank it away for necessities. I’ve always encouraged 401(k) participation and changed to a safe harbor 401(k) plan so I could automatically give my employees 3% whether they put in or not. Also, for the last 14 years we’ve given an additional 3% in profit sharing.
We give them gift cards on their birthdays to spend on gas or food. We have a fall cookout with a bouncy house for kids and usually a bags (cornhole) tournament. I’ll fire up the grill and cook brats and burgers. At Thanksgiving, everyone gets a gift card so they can buy a turkey dinner, and at our holiday party every year, I let everyone know that I’ll pay for their transportation to get them home safely if they need it. If they have to come back to pick their car up the next day, I’ll pay for an Uber ride too. We offer service awards and prizes, and those who can’t make the party get a $100 gift card to ensure they’ll get a nice meal at their favorite restaurant. Bonuses are paid out early so people can use the extra boost for the holidays. Periodically, I’ll buy lunches — tacos, subs, or pizzas.
Who set this example for you?
My dad was in the Army for 22 years and left as a lieutenant colonel. He and my mom get the credit. I wanted to work for my grandfather’s moving company, but my mom insisted I go to college and I’m glad I did. I went to St. Norbert College in De Pere and graduated with a degree in business administration and a minor in marketing.
What are your immediate goals?
They never change: make enough money so that I can either purchase new equipment or afford down payments on equipment, and take care of my employees.
What keeps you up at night?
The price of steel. Between Oct. 2021 and Oct. 2022, steel increased over 200%. It started coming back down last October, but it hasn’t come down as fast as it went up, and now the mills are announcing another big increase. Once they announce, prices take effect immediately. There are several steel mills in the U.S., but if one furnace goes down, for example, it might take months to get it back and that drives up costs. Luckily, we’ve built a good rapport with our vendors so we’re not locked into just one.
What else would you like people to know?
You know, all of my money is in this company. I don’t have a second house. I don’t have a yacht. I don’t have multiple cars. My wife and I built a home in 1998, and we’re still there. I bank my money to provide the best equipment and to pay my employees so I can keep them employed when pandemics and recessions occur.
We’re interviewing for welders right now. Some complain that they’ve had to buy or replace their own equipment, which isn’t cheap. I provide all of that, the helmets, the gloves. Every machine we have is state-of-the-art and five-years old or newer, and I’m proud of that.
Do you have a succession plan?
I have a son in college who has worked here and has shown interest. I hope he becomes my successor, but there are trusted employees as well. If it all works out in the future, I’ll finally be able to golf a lot more!
