When Charles Hood couldn’t find enough qualified workers for his company in Sparks, he decided the company needed an attractive incentive to attract and retain them.
After pondering the problem for a while, Hood decided to sell the company to his employees via an Employee Stock Ownership Plan or ESOP.
“Word will take off on that, and I firmly believe there will be a waiting line to go to work here,” said Hood, who launched Hood Machine Inc. in 1979 as a single-person machine shop.
The creation of an ESOP also positions Hood for retirement as the company will be 100 percent employee-owned in a couple of years.
Attracting workers is especially important right now as the company’s expansion plans get under way. The company, which specializes in custom machining and prototyping, will add 30,000 square feet of production space adjacent to and down the street from its current facility and 25 new jobs. It currently employs 65.
An economist with the state’s Department of Employment, Training and Rehabilitation said Hood’s plan addresses a key issue.
“Trying to find unemployed tradesmen is difficult,” says economist Jim Shabi, “There aren’t too many sitting around idle in this state. Skilled labor shortages have popped up in specific markets across the country and the West in general.”
Executives of Hood Machine said the company’s struggles have little to do with wages. The company provides competitive salaries or better for the area based on experience, and it’s recruited along the West Coast and in Las Vegas.
“Now that we’re employee owned that will help attract new employees and motivate existing employees to work as hard as they can to maximize profits,” said Michael Labahn, Hood’s general manager.
Hood Machine handles machine products, welding, fabrication and grinding. Its primary market is local, but its customers include out-of-town companies as well.
“We don’t manufacture our own products. We can, but we haven’t got to that point yet,” said Labahn. “We’re considered a job shop not a contract shop.”
Hood said the company’s growth was fueled by providing quality and good service.
“We don’t advertise, ” Hood said. “We don’t need to because we actually turn away work. We don’t have enough help to actually do it all now. Most of our work has come by word of mouth.”
As a consequence, Hood is not planning any major marketing program to accompany its expansion.
“We’re going to stay with what we’re good at. We’re just expanding our reach and type of things we do,” Hood said.
However, when the expansion is complete there are plans to explore other geographic markets.
“The goal is to diversify our customer base and the expansion will give us the additional capacity to do that,” Labahn said, For example, he said the company has the capability of doing more production work than it does now. One possibility: Repair and fabrication of pressure vessels, containers that hold liquid under pressure. That business would capitalize on Hood’s ability to meet codes set by the American Society of Mechanical Engineers for welding and fabrication.
The regional building and population boom continues to favorably impact operations at Northern Nevada financial institutions. The thousands of new residents moving to the Truckee Meadows need to finance homes or new businesses, and all regional bankers really need to do is just put on a catcher’s mitt to snag the flow of business from people and companies moving in from California.