Labor and Employment

Activist shareholders from across the ideological spectrum have increasingly influenced public companies’ proxy ballots, and the Securities and Exchange Commission has unlawfully become their willing partner. That’s why the NAM has moved to intervene in a court case on the matter.

What’s going on: The NAM yesterday filed a motion to intervene in a case challenging the SEC’s authority to compel manufacturers to use their proxy ballots to speak about divisive social and political issues that are unrelated to a company’s business or long-term value.

• If granted intervenor status, the NAM will argue that the SEC’s rules requiring companies to include activist proposals on the proxy ballot violate federal securities law and the First Amendment.

The background: An activist group that holds shares in Kroger Co. sought a shareholder vote on a proposal to have the grocery chain issue a public report concerning its equal opportunity employment policy.

• Kroger sought permission from the SEC to exclude the proposal from its proxy ballot, which the SEC granted. The group has sued the SEC, accusing the agency of acting in an inconsistent and politically motivated manner.

Why it’s important: Though the SEC rejected this proposal, the agency often requires companies to publish shareholder proposals it deems to have “broad societal impact.”

• The NAM’s motion to intervene argues that the SEC’s requirement that companies publish and respond to these proposals is a violation of the First Amendment’s prohibition on government-compelled speech.
• Furthermore, federal securities law does not permit the SEC to dictate the content of company proxy statements, so the agency’s politicization of corporate governance has unlawfully federalized issues that have traditionally been governed under state corporate law.

Unnecessary—and increasing: Forcing manufacturers to take political positions on their proxy ballots drives up costs for the companies and draws needless and unwanted controversy, the NAM says. Yet, the number of activist proposals on proxy ballots is only growing.

• “In total, 682 shareholder proposals were filed for annual meetings being held through May 31,” The Wall Street Journal (subscription) reported.

How we got here: The NAM has been urging the SEC to prioritize the needs of long-term shareholders over activists’ agendas for many years.

• The NAM opposed the SEC’s guidance requiring companies to include most environmental and social proposals on their proxy ballots.
• It also urged the agency not to move forward with a proposed rule limiting companies’ ability to exclude activist proposals.

The last word: “The corporate proxy ballot is not the appropriate venue for policy decisions better made by America’s elected representatives, and manufacturers are regularly caught in the middle as activists on the left and the right bring fights from the political arena into the boardroom,” said NAM Chief Legal Officer Linda Kelly.

• “The NAM Legal Center is standing up for manufacturers to ensure they can focus on growing their businesses, driving economic expansion and job creation and creating value for shareholders.”

​​​​​​​NAM in the news: POLITICO (subscription) and Bloomberg (subscription) covered the NAM’s legal efforts.

Most people are satisfied with their jobs, according to a Washington Post–Ipsos poll about what workers want, The Washington Post (subscription) reports.

What’s going on: Following the pandemic and the Great Resignation, “about 8 in 10 workers are satisfied with their jobs, even as over 6 in 10 say work is stressful,” according to the survey of 1,148 workers ages 18 to 64.

• “While desire to work from home is a priority for some workers, pay, having a good boss or manager and other aspects of a job rank higher.”

Key takeaways: The poll had several notable findings, including the following:

• People prize remote work: Four in 10 respondents said their jobs can be done remotely. “Desire to work outside the office is high among remote-capable workers, with about 7 in 10 saying they’d choose to work from home “all of the time” (37 percent) or “most of the time” (35 percent).”
• Pay and bosses matter: “When asked to rank the most important factors in a job, 45 percent put pay in the top slot. Having a good boss comes in second, with 14 percent of workers ranking it as the most important.”
• The Gen Z difference: Gen Z and younger millennial workers prize promotion and advancement opportunities more highly than do their older counterparts.
• Friends at work: Some 55% of respondents said they have “close friendships” with coworkers.

The stress factor: “Stress varies sharply by age, with Gen Z workers the least likely to say their jobs are stressful (43 percent), compared to 61 percent of younger millennials 27-to-34 years old, 67 percent of 35-to-49-year-olds and 66 percent of workers 50-to-64 years old.”

A record number of employee drug tests are showing positive results for marijuana, The Wall Street Journal (subscription) reports, as legalization becomes more prevalent.

The numbers: “Of the more than 6 million general workforce tests that Quest screened for marijuana in 2022, 4.3% came back positive, up from 3.9% the prior year. That is the largest marijuana positivity rate since 1997.”

More alarming: As many tests can pick up marijuana use from days or weeks prior, a positive test doesn’t necessarily indicate impairment on the job. However…

• “The percentage of employees that tested positive for marijuana following an on-the-job accident rose to 7.3% in 2022, an increase of 9% compared with the prior year.”
• “From 2012 to 2022, post-accident marijuana positive test rates tripled, tracking with widening legalization.”

On the positive side: “Positivity rates last year for certain classes of opioids and barbiturates declined.”

The legal tangle: Differing marijuana regulations across the U.S. have created a headache for employers trying to enact workplace policies.

• That’s why the NAM’s Legal Center hosted a panel on marijuana policy at its first Manufacturing Legal Summit back in November.

Interested in learning more? The next NAM summit, which convenes in-house counsel from manufacturing companies as well as outside experts, will be Nov. 6–7 in Washington, D.C. Registration has just opened, and you can sign up here.

More small businesses are pulling back on hiring, The Wall Street Journal (subscription) reports.

What’s going on: “The portion of small-business owners who expect to expand their workforce over the next year was below 50% for the second month in a row in May, hitting the lowest level since June 2020, during the early months of the Covid-19 pandemic, according to a recent survey conducted for The Wall Street Journal.”

• Even as the economy shows signs of a slowdown, applicant pay expectations remain high—but small-business owners are “less willing to pay up for talent” as they respond to belt tightening by their customers.

The data: In March, U.S. job openings fell to their lowest level in almost two years, and the number of layoffs increased.

• However, employers added 253,000 jobs in April, mostly on the strength of service-sector gains.

What it means: “‘There is no question that CEOs are downshifting into a slowing economy,’ said Vistage chief research officer Joe Galvin. Despite caution about adding additional workers, ‘no one is willing to shed the hard-earned and expensive employees they hired,’ Mr. Galvin said. Entrepreneurs often still struggle to fill openings when workers leave, he added.”

The MI released our latest resource: the Second Chance Hiring Toolkit for Local Communities. Through interviews with employers, partners, and local stakeholders, as well as a review of other efforts across the country, the MI developed the toolkit to support local leaders– or “hub organizations”– to design and implement multi-employer second chance collaboratives in their region. The intended audience for this toolkit includes state and local manufacturing associations, chambers, and other locally-based organizations to build and implement a place-based second chance employment pilot program. Employers can also reference this toolkit for direction on how to get started with their own second chance hiring journey.

If you have questions, please reach out to Pooja Tripathi, Director of Workforce Initiatives at [email protected] for more information.

When Jennifer Hamann went to college, she intended to be a fashion merchandising major—but she soon realized that it wasn’t for her.

“At the time, fashion merchandising was a combination of business and home economics,” said Hamann. “When I found out I had to sew, I dropped out.”

Instead, she pivoted to finance, which set her on the path to her current position as executive vice president and chief financial officer at Union Pacific Railroad. She was recently honored by the Manufacturing Institute—the NAM’s 501(c)(3) workforce development and education affiliate—with a Women MAKE Award, recognizing outstanding women working in the manufacturing industry.

A flexible career: When Hamann reflects on her time at Union Pacific, she sees flexibility and a willingness to try new things as a consistent theme—as when she shifted from a position on the audit staff to a role in human resources.

• “The thing that I think is a great selling point about Union Pacific is that you can still get your paycheck from the same company, but you can make wholesale career changes over the course of your career,” said Hamann.
• “I’ve done that. … I’ve taken on roles that were totally different than what I had gone to school for, or what I started doing when I came to Union Pacific. And I think that’s a real benefit to businesses like ours.”

Serving with pride: According to Hamann, the 161-year-old company’s workforce takes a great deal of pride in what they do and prioritizes a team-centered environment.

• “There’s tremendous pride in the workforce,” said Hamann. “Our tagline is Building America, and that really is how we think of ourselves. Supporting so many parts of America’s economy and so many communities—that pride is a big deal.”

Pushing for diversity: Hamann was previously president and now serves as the executive adviser of Union Pacific’s employee resource group for women called LEAD (which stands for Lead, Educate, Achieve and Develop). The ERG is one of nine at the railroad that helps foster inclusion and cultural awareness by creating networks that develop Union Pacific’s workforce and its culture.

• “One of the focus areas we’ve had as a [LEAD] group over the last several years is really reaching out into our field locations,” said Hamann. “If women can see other women in some of those roles that have been traditionally held by men, that helps give them greater confidence, and it helps in our overall recruiting and retention efforts to bring people into those jobs.”

Building a future: Hamann is proud of the work Union Pacific is doing to attract a diverse workforce, including by offering free college tuition for employees and by stressing pay equity and retention.

• “Not only do I think Union Pacific is a great place to work, but we really want it to be a great place for more women going forward,” said Hamann. “When I think about the future, I’d love to see it be a future where the demographics of Union Pacific reflect the demographics of the country and the communities where we operate.”

The last word: “This is a company with a very supportive culture,” said Hamann. “We value diversity, equity and inclusion. We want people to succeed. We have opportunities to build your network. Give us a try and see what you think.”

More reading: View the full list of this year’s Women MAKE Award Honorees and Emerging Leaders here, and learn more here about the Women MAKE Mentorship Program to help inspire the next generation of female talent.

The Federal Trade Commission is proposing to ban noncompete agreements, but doing so would disrupt the operations of most manufacturers, according to the findings of a recent NAM poll.

What’s going on: In February, the NAM polled manufacturing leaders to learn their thoughts on the impact of the FTC’s proposed rule, which would prohibit employers from imposing noncompete agreements on employees. Among the poll’s key takeaways:

• Approximately 70% of respondent manufacturers use noncompete agreements.
• The ban would cause a disruption for approximately 66% of manufacturers.
• The majority of manufacturers—about 89%—said they use noncompetes that last from six months to two years.
• Approximately half of manufacturers polled said a ban would have a negative impact on their investment in training and related programs.

Why it’s important: “Manufacturers use noncompete agreements only for select workers handling their most sensitive information, which cannot be allowed to fall into competitors’ hands,” said NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling.

• “These agreements are critical for protecting intellectual property. Banning them would force companies to completely change the way they operate and the way teams work together—disrupting workplaces, jeopardizing their ability to develop important new products and ultimately hurting customers.”

What should be done: If the FTC insists on moving forward with a noncompete rule, it should withdraw its current proposal and put forth a more tailored version “with exemptions clearly articulated and justified for the public’s consideration,” NAM Director of Labor and Employment Policy Brian Walsh told the agency.

Every year the Bryce Harlow Foundation gives its Business–Government Relations Award to an individual who’s given their all to a career in professional advocacy—and this year, that person was NAM President and CEO Jay Timmons.

Honorees: On Wednesday evening in Washington, D.C., the foundation held its 42nd Bryce Harlow Foundation Annual Awards reception and dinner. The night’s awardees were Timmons and Rep. Debbie Dingell (D-MI), the winner of the foundation’s other honor, the Bryce Harlow Award.

• Timmons was introduced by Dow Inc. Chairman and CEO (and NAM Board Chair) Jim Fitterling, who called the NAM leader “ethical down to his bones” and said, “Jay has a reputation of working honestly and earnestly with Democrats, Republicans and Independents, and he earned that reputation because fundamentally he’s committed to policy solutions that create a win–win, not only for both political parties, but also for American manufacturers and American workers.”
• Dingell also praised Timmons’ steadfast, post-partisan approach to manufacturing advocacy. “He has worked to make sure Democrats and Republicans are part of the discussion about manufacturing and understand how critical it is to this country. … To be honored in the same year as you, Jay, means more than you’ll ever know.”
• In his own remarks, Timmons praised both Bryce Harlow Foundation President Barbara Faculjak’s “outstanding leadership” and Rep. Dingell’s “incredible example for [the next] generation.”

Pep talk: Also honored at the dinner were the 2022–2023 Bryce Harlow fellows, a group of 30 graduate students pursuing careers in advocacy through government relations or lobbying. Timmons spoke directly to them for most of his speech.

• “Over the course of your careers, you will face important decisions,” he said. “You’ll ask yourself questions like, ‘Where should I work?’ ‘What will I do next?’ ‘How much can I make?’ … I want to encourage you to ask another: ‘Why?’”
• “The question matters … because if you can answer honestly and feel yourself standing up a little straighter with a sense of purpose, then you’re in the right profession,” he said. “If your ‘why’ is right … then the ‘what,’ ‘where’ and ‘how much’ will take care of themselves.”
• Timmons went on to tell the fellows part of his own story: how he dropped out of college to move to D.C. and “join the Reagan Revolution”—against his parents’ wishes. But even then he was able to answer his own “why.”

The manufacturing “why”: For the NAM, the organizational “why” is “to advance the values of free enterprise, competitiveness, individual liberty and equal opportunity.”

• Timmons told the students that part of their jobs “as advocacy leaders” would be to defend democracy, now under attack in Russia’s war against Ukraine and elsewhere in the world. While not perfect, Timmons said, democracy has done more to improve people’s quality of life than any other system in history.

Your authentic self: “[T]here was always something or someone who told me to change course or that I wasn’t right for a job—including those voices that told me to pack it up when I was outed as a gay man at a time when that wasn’t exactly an asset for a career,” Timmons said. “If I’d listened, I wouldn’t be here.”

• Today Timmons is the president and CEO of the country’s largest manufacturing association and is happily married with three children.
• “So bring your authentic self to the table,” he concluded. “Soak in all the knowledge and wisdom you can from others. But ultimately, have confidence in your own inner voice, your own judgment and your own vision.”

Click here for Timmons’s full remarks.

With 9.9 million job openings in the economy and 5.7 million people looking for jobs, the labor market is tight, with only 58 job seekers for every 100 job openings. Manufacturers who are looking to fill almost 700,000 jobs are struggling to find talent. That’s why the Manufacturing Institute convened a group of manufacturers last month for the Solution Series: Recruitment Workshop, where they discussed recruitment challenges and identified ways to address them. Here are some of the takeaways.

A wide range of challenges: At the beginning of the workshop, participants brought up the challenges they face in recruiting employees, particularly hourly and shop-floor workers.

• The most commonly cited challenge was communicating company culture and brand messaging. Several manufacturers in attendance had multiple locations with different cultures, which made it difficult to create consistent job postings. Meanwhile, other companies did not have a defined mission or set of values that they could easily promote to prospective employees.
• As one participant put it, “It’s important to think through why working at your company is good. This is different than the reasons why buying from the company is good.”
• Other challenges that participants shared included determining the right compensation in a competitive labor market, educating upper management on the changing economic landscape and attracting a wide array of candidates.

Food for thought: Participants then listened to industry experts speak about manufacturing employment trends, fair chance hiring, the gig economy and the importance of speed in recruitment.

• Employment trends: Manufacturers are competing against other manufacturers and industries for the same, limited labor pool, noted Chad Moutray, the director of the MI’s Center for Manufacturing Research and the NAM’s chief economist. “Issues like company culture, flexibility and career advancement become critical differentiators in a tight labor market,” he advised.
• Fair chance hiring: As Cassi Zumbiel, managing director at Envoy, put it, “Many of the barriers keeping second chance workers [individuals with criminal records] from good jobs were instituted by employers when the labor market was dramatically different, when there was a surplus of labor. That’s not the case anymore. Fair chance hiring can help address the labor shortage.”
• Gig workers: Wes Wood, director of strategic growth at Veryable, shared how his company’s online application connects gig workers to manufacturing jobs, filling in gaps in second and third shifts and having a positive impact on company culture.
• Recruitment: With manufacturers facing stiff competition for talent, moving quickly in the recruitment process makes a difference. Mike Schaefer, senior vice president at FactoryFix, described how his company supports manufacturers by automating follow-up within 15 minutes of a job seeker submitting an application.

Time to brainstorm: Participants also broke out into small groups to discuss their top challenges and brainstorm solutions. Here were some of their recommendations:

• Tighten up the job description. Think of a job description as an advertisement—not a contract. Keep it short. As one participant put it, “You don’t want to advertise accountability.” Another good tip: An external job description should not be the same as the internal job description. Only the latter should include all the details and technicalities.
• Streamline the application process. Don’t require a resume or cover letter for most of your hourly or entry-level positions. Ask only the key questions and reserve more in-depth ones for the phone screen or interview. One company cut its process down from 12 minutes to 3—and started receiving significantly more applications.
• Think about how to source talent. Consider working with K–12 schools, vocational programs and community colleges, or consider creating a second chance program, veterans program or refugee program. Lots of great talent pools exist. Manufacturers should explore their local options, find community partners and conduct consistent outreach.

The last word: After a day of energizing conversations, participants left ready to implement what they had learned. As one attendee put it, “Hearing what works and doesn’t work for other manufacturers was absolutely amazing.”

From the first moment Caleb Cleveland visited Electrolux Group—a home products and appliance manufacturer in Springfield, Tennessee—he knew it was the place for him.

“I knew I wanted to work with my hands,” said Cleveland. “I didn’t want to be sitting at a desk in front of a computer screen. I loved this place from day one.”

Cleveland found Electrolux Group through the Federation for Advanced Manufacturing Education program, or FAME, which his guidance counselor recommended to him. Today, both he and his employer are thrilled he’s taking part.

The program: Founded in 2010 by Toyota and operated today by The Manufacturing Institute, FAME aims to help students become highly skilled, sought-after workers capable of meeting the unique needs and challenges of the modern manufacturing sector.

• It provides current and aspiring workers with on-the-job training and classroom education, leading to an associate degree and the FAME advanced manufacturing technician certificate.
• “This program is one of a kind,” said Cleveland. “I’m actually getting paid to go to school. I’m getting the classroom and training classes here at Electrolux Group. I’m learning from people at school and from experts here.”

The benefits: At a time when manufacturers are struggling with record high job openings and a lack of skilled workers, FAME is helping to bring in a new generation of employees.

• Cleveland will be the Electrolux Group’s first graduate of the program when he completes it in May 2024, and the company sees his success as both a point of pride and an investment in the future of manufacturing.

• “We are committed to continuous upskilling of our current workforce and this is a strong pipeline for new talent with digital skills,” said Electrolux Group Senior Manager of Learning Dan Caldwell. “Part of our strategy is to partner with the FAME program so we can not only bring in Caleb with his classroom knowledge, but also help him to learn and grow.”

Changing minds: FAME is also helping to improve perceptions of the manufacturing industry among young people.

• “In the past, manufacturing has had a dark and gloomy reputation, and we are changing that perspective,” said Electrolux Technical Trainer Eric Drake. “We want up-and-coming talent to know that there are people in manufacturing who care about their future and want them to succeed. We’ll provide the stepping stones for their journey.”

Off to a great start: According to Caldwell and Drake, Cleveland has been an enormous asset for the company already.

• By the end of his first semester, he was able to step in and do most of the work of a process technician, filling in at a time when the company was shorthanded.

• “Caleb is doing a knockout job,” said Drake. “Our objective is to make opportunities available for him.” Caldwell added, “We are incredibly proud of Caleb with the initiative he takes.”

The bottom line: “The program has exceeded my expectations,” said Cleveland. “When I first started I was worried about being seen as that intern who sticks to somebody’s hip. But at Electrolux Group, I found my own place.”