Santa Ana-based Rubberite Cypress Sponge saw record sales of its uncut and custom rubber, sponge and construction products in 2010.
Its employee count didn’t budge.
The company, which employs 35 workers at plants in Santa Ana, Houston and Columbus, Ohio, relied on temporary hires to handle the increased business.
“That’s been one area we’re able to keep overhead down,” said President and Chief Executive Greg Brooks. “We’re running very lean and mean.”
That’s a common strategy among small businesses these days.
Rubberite followed its gains in 2010 with a 27% sales jump in the first quarter compared to year ago. It has plenty of room to expand at its 162,000-square-foot Columbus plant—and Brooks knows he’ll have to hire more workers to meet demand.
No Hurry
He’s still not rushing. The company expects to start hiring customer service representatives, machine operators and managers later this year.
“To make that final decision, we’ll have a little better feel this summer,” he said. “We get a chance to work with these people for a period of time before we hire them.”
Other executives weigh broader economic factors such as consumer spending as well as internal factors, including backlogged work and reviews of the competition.
Many builders, engineering and design firms won’t hire employees unless there’s guaranteed work, according to Ronald Stein, vice president at PTS Staffing Solutions in Irvine.
PTS caters to the engineering and technical fields, both segments that saw big cuts to their workforce in the downturn as projects stalled or were scrapped altogether.
Some Shortages
With little work here, many professionals left the region to find opportunities elsewhere. That shrunk the talent pool companies tap into when they land a big job or win a proposal.
Those remaining still can face a tough search as business owners remain cautious even when they make the decision to hire.
“Most of the people in the industry tend to be known,” Stein said. “Having a good track record is really beneficial for our recruits to getting an interview or a job offer.”
The combination of the recent outflow of talent and the ongoing recovery has brought an odd twist: some engineering firms fear bidding on work because they might not have the workforce to handle it immediately.
“It’s really tough to find qualified people in this niche,” Stein said. “They don’t have any external people.”
Employers are inquiring more about workers, but most of the projects are considered small by industry standards, with a lot of maintenance and touch-up work, Stein said.
That could change as bidding has been more active than it was in the past few quarters, he said.
Equipment First
Some companies are starting to invest in equipment again as business picks up, an indicator that hiring could follow.
But many small business owners remain hesitant to add to payroll, which often is the last barrier to cross on an economic recovery.
Small business owners, especially, want to be assured revenue is trending up, back orders are growing and contracts are signed, said Heather Endresen, who leads Union Bank’s Small Business Administration and government lending division from its Irvine offices.
“It’s not an easy decision today like it was three to four years ago,” she said. “They want to know the work is permanent.”
“Well-Considered”
At Anaheim’s Advantage Inc., all hiring decisions are based on the revenue outlook.
The direct marketer and printing supplier has seen double-digit employee growth in four of the last five years, expanding its workforce from 120 to 375 people.
“Advantage has a conservative but opportunistic growth strategy, so expanding our workforce is always a well-considered move,” said founder and owner Tom Ling.
Ling said he spent the last two years “right-sizing” the operation after acquiring a handful of competitors in the downturn.
That included consolidating eight operations into two, including a new 160,000-square-foot headquarters in Anaheim.
The moves paid off as Advantage saw a 29% sales jump in 2010 to $62 million.
More Hires
In 2011 the company expects to hire another 30 to 40 employees but will do so cautiously.
“All new hire or expansion decisions start from revenue growth potential analysis,” Ling said. “We have very carefully analyzed the skill sets necessary for success in our business at all levels and in all positions, so the addition of personnel is a combination of our position needs at the time verses the available talent pool in the marketplace.” n
