With the U.S. unemployment rate consistently above 8 percent for the past three-and-a-half years, hiring isn’t a priority for many American companies.
This story first appeared in the August 13, 2012 issue of WWD. Subscribe Today.
If one in three American micro businesses (companies with five employees or less) hired one person, the U.S. unemployment rate would fall to 4 percent, what economists consider to be full employment, said Connie Evans, president and chief executive officer of the Association for Enterprise Opportunity, the nonprofit and businesses trade group behind The Power of 1 in 3 initiative. She believes that is within reach, since micro businesses comprise 88 percent of all small businesses in the U.S.
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“No one has to sit this one out. You can hire in your own company or you can support nonprofit lenders and other organic supporters of these businesses,” Evans said. “It’s very important to recognize the value of Main Street and micro businesses to let people know they are counted. The more visibility we bring to this, the better off individual people in communities will be.”
AEO aims to reach one million entrepreneurs who will in turn help create 500,000 jobs within the next three to five years, Evans said.
And there are companies adding jobs. WWD asked seven fast-growing brands how they have managed to keep building their workforce and what others might learn from them.
In the five years since Greek yogurt maker Chobani started in an abandoned factory in upstate New York, the company has grown from five employees to 1,200. That number will jump to 2,000 by the end of this year with the opening of a 1 million-square-foot facility in Twin Falls, Idaho. Executive vice president Kyle O’Brien said, “If you walk into one of our factories, you see the smiles on people’s faces and their heads are up. They are not only earning a paycheck but [for us] to think mom and dad are going to work tomorrow, that is an incredible thing.”
That hometown message was also the theme of the company’s first commercial, “Proudly With You,” which aired during the opening ceremonies of the London Olympics. To celebrate Chobani’s expansion in Norwich, N.Y., the company rounded up 1,500 new hires, friends and locals to gather in a field to watch the Danny Boyle-produced extravaganza and the debut of Chobani’s ad, which included replica shots of what the alfresco New York crowd was actually doing at that moment. (The brand is a sponsor of Team USA through 2014.)
With annual sales nearing $1 billion, Chobani has indirectly helped create 7,000 dairy jobs and 1,000 farming jobs, O’Brien said. That may not have come to be had the company followed the advice of consultants to go more upmarket. “We entered the market in October of 2007, when the world was not at a great place, but we wanted to innovate. We created something that was not only natural and good for you, but we priced it so everybody could have it. Basically, we were saying this is for everybody and everybody deserves this,” O’Brien said. “That’s a good story and one that we believe.”
With its 630-person Redwood City, Calif., staff now housed under one roof, DreamWorks will hire 180 more people in the next 12 months, according to Gail Currey, head of studio for DreamWorks Animation. The new set-up is geared for more on-the-fly interaction, which the company believes will help spark innovation, the bedrock of its growth.
“We are an incredibly collaborative business, and we need group interaction as a technology company. We have all sorts of cross sites and new ways of interacting with electronic media, but it is amazing what can be generated just by having two people bump into each other in the hall,” she said. “As a manager, I’m always thinking about what could go wrong. I expected people to complain about where they were sitting. Change is always hard on people and I have been nothing but pleasantly surprised. People are just thankful for the new — the new cafeteria, the new cross sites, the new library. The appreciation and the morale perks have been the best part.”
With the help of Chinese partners, DreamWorks Animation SKG has big plans for Shanghai, where it will develop a $3.1 billion cultural Dream Center that is expected to be completed in 2016. The sprawling riverfront facility will house theaters, restaurants, shops and an entertainment zone as well as a production studio. The latter will reportedly create 2,000 jobs in China. Currey said it will lead to new hires back in the U.S. as well, since those films will require editing and front-end services among other things.
DreamWorks often winds up creating jobs by analyzing ways its businesses can be run more efficiently, she said. “Every time we dig deep to gain better efficiencies we wind up creating jobs. You would think it would be the opposite,” Currey said. “For us, the big, big win is innovation and trusting your people. They are the ones who know what is efficient and what is not. You really have to pull up from the bottom to figure out what we can be doing better, and do this as an ongoing process as opposed to every three years.”
Having added 750 people through new hires and company acquisitions in the past year, Google is still “aggressively” hiring, especially in sales and engineering, a company spokesman said. The way things stand, half of the company’s 3,000-plus employees in New York work in sales. Google, which paid $12.4 billion to acquire Motorola Mobility, has 54,604 employees worldwide with 34,300 working solely for Google. Known to treat its employees (Googlers, as they’re internally called) well, the company recently started offering death benefits, guaranteeing that a deceased employee’s spouse or domestic partner will receive half his or her salary annually for 10 years. Google declined to specify exactly how many employees are based in the U.S. Friday other than to say the majority are. “More than anything, we are looking for ways to grow our business. We have some great products that are getting really good responses,” the spokesman said, naming the Android mobile operating system and the Chrome browser as examples.
Google has a hire-them-now-figure-out-what-they-will-do-later mind-set. The spokesman said, “Something that we have found to be one of the biggest keys to our success is finding really great, smart, capable people. Even if you are not sure where they will work in the organization, it’s important to get them through the door. Then we give them the freedom to build great products.”
Square, the mobile payment company founded by Twitter creator Jack Dorsey, has tripled its workforce to 350 in the past year and in 2013 that number will climb to 700. The bulk of the new recruits will work in engineering and design in the company’s San Francisco home office, though there are small outposts in New York and Atlanta. Some of that growth stems from Square’s new $25 million deal with Starbucks. This fall, Square will start processing all credit and debit card transactions at the coffee chain’s 7,000 U.S. locations. But the start-up-that-was will also need more manpower when it ventures overseas next year, although a company spokeswoman declined to say where.
In addition to the Square card reader, the Square register (essentially an iPad) and the Pay with Square app, the product-driven company is testing new software in New York City taxi cabs that will allow passengers to pay before they reach their destination, receive receipts via text or e-mail and see where they are on a map as they travel. “We’re looking to change the experience. Our ideas start with the individual,” the spokeswoman said. “The company was started after one of our founders, who was an artist, lost a big sale because he couldn’t take credit cards. Square can be used whether you are selling art or a couch on Craigslist.”
The activewear brand has added 60 people so far this year in its five New England factories, and there are more to come. Some of that growth was put in motion in 2005 through a companywide effort to improve productivity, reduce waste and encourage problem-solving. President and ceo Rob DeMartini said, “We were able to go from making one pair of shoes in eight days in 2005 to [doing that in] three hours today,” he said. “Today it is everyone’s responsibility in manufacturing to contribute ideas as part of their job description, and we get hundreds of ideas per year that help us increase our efficiency, our quality and our capabilities.”
New Balance has been supporting U.S. production since 1938. “As a company, we are proud to invest in American workers who provide some of the greatest working spirit, commitment to advancement and ingenuity known in the industrial world. We choose to view manufacturing as an opportunity that is not only good for our nation’s economy in providing quality jobs, but also provides us with key competitive advantages,” he said.
“Domestic manufacturing gives us the ability to be closer to consumption and to the consumer, so it’s a supply chain advantage. We are better able to manage inventory for ourselves and our retailers,” DeMartini continued. “In an industry that uses partners to produce its product, we believe by running our own factories — we know how to work with our partners better. New Balance is a private company, so we are able to better make both short- and long-term investment decisions that maintain our corporate choices.”
AIRBUS AND HONDA
With plans to create 1,000 jobs in a Mobile, Ala., line assembly facility, European airplane manufacturer Airbus aims to double its investment in the U.S., which is currently more than $12 billion. The company is spending $600 million over the next five years for the new assembly line and in doing so will create jobs in an area that has struggled after Hurricane Katrina and the BP oil spill, a company spokeswoman said. The state of Alabama enticed the company with a $158 million incentive package.
“With significant engineering, training and support facilities here, as well as a research and development partnership, Airbus saw the Alabama final assembly facility as the next logical step, especially since the U.S. is currently the largest market for those planes and it will remain so for the next 20 years,” she said. “Having some production costs in the dollar zone also helps us create a natural currency hedge, reducing our exposure to exchange-rate fluctuations.”
While only a month has passed since the Mobile expansion announcement was made, the reaction from the local community and throughout the state, as well as neighboring ones, has been dramatic, in regard to what the facility will mean to the region, she said. “Political and community leaders were very enthusiastic to be a part of the announcement itself, which was a tough-to-keep secret in a region that is hungry for economic development. Our customers have been very supportive as well — particularly those in the U.S. who will see their aircraft ultimately come off the Mobile assembly line,” the spokeswoman said.
Honda is also on the move. Through the expansion of its plants in Ohio, Indiana and Alabama, more than 1,500 jobs are being created this year. In 30 years of U.S. manufacturing, the company has never had a layoff and directly employs 26,000 people in the U.S. Making products near the customer allows the company to quickly reflect local customers’ demands, and hold down costs related to transportation, customs duties and production plants, a company spokesman said. Honda’s automobile, power sports and power equipment dealerships provide 134,000 jobs domestically.
Last year, 85 percent of the Honda and Acura vehicles that were sold in the U.S. were made in North America using domestic and globally sourced parts and the goal is to increase that figure to more than 90 percent in the coming years, the spokesman said.
Having seen annual sales double every year since 2002, Nutiva, an importer and marketer of organic superfoods, is hiring about 50 people this year for its new 140,000-square-foot facility in Richmond, Calif. The company, which sells to 6,000-plus stores, aims to have $100 million in sales in 2015. It will reduce production costs and its carbon footprint by being closer to the port of Oakland, Calif., and nearby railway transportation. Part of the company’s growth stems from focusing solely on products made from coconut oil, hemp or chia seeds rather than an army of things.
Company founder John Roulac was among the first to place the non-GMO label on the products. Nutiva was one of the first U.S. food companies to do this. He is among the supporters of a new hemp farming bill. That effort resonates with consumers, according to director of marketing Liz Huntington. “More Americans are looking for companies that walk the talk and are really consumer advocates. John is not doing this for the purpose of selling things. He is doing it for the integrity of food,” she said.