CINCINNATI -- Not many three-year-old businesses will have $8 million in revenue this year -- and expect to triple that in 2017.
But that’s the projection former University of Cincinnati quarterback Dustin Grutza has for CraftForce, which helps both manufacturing companies find the skilled workers they need and skilled workers the jobs they want.
He credits two trends in the United States economy with providing the headwinds for his business’ growth:
- Manufacturers are bringing jobs back from overseas and setting up plants in the United States -- they’re “insourcing” rather than outsourcing. Rising labor costs in countries like China, as well as the demand for quick turnarounds on orders, are fueling the trend.
- Baby boomers who work in the skilled trades are retiring, and there aren’t enough young people learning those trades to keep up with the demand. For the past three years, workforce services firm ManpowerGroup has found that the No. 1 hardest positions to fill nationally have been in skilled trades. (By the way, “skilled trades” means those occupations that require specific hands-on skills, such as machinist, welder, plumber and the like).
According to Economic Modeling Specialists International, 53 percent of skilled workers are more than 45, about 10 percent higher than the average across all jobs. Few skilled-trades workers keep at it after 65, because the jobs are too physically demanding.
But there’s lots of opportunity in those trades for young people who don’t necessarily want to go to college but can learn a trade. For example, welders start at about $18 an hour, Grutza said, with those who learn more advanced welding techniques earning up to $30 an hour.
He’s worried that efforts to boost the economy might fail because there aren’t enough skilled-trades people to do the jobs created. “We have to educate the youth of our nation about the opportunities available to them,” he said.
How did CraftForce happen?
As a direct result of the aforementioned shortage. Grutza, who was the Bearcats’ starting quarterback from 2005-06, went to work for Ranger, his family’s business in Maysville, Kentucky, after he graduated in 2008.
The company does heavy industrial maintenance and construction, including work in local power stations and factories. Its biggest problem, Grutza said, was finding skilled-trades people who could do the work.
After some research, he learned that the problem wasn’t unique to Ranger, he said, and he saw a business opportunity. Having watched his parents, Bob and Gwynn Grutza, start Ranger in 1996, Grutza felt it was inevitable he would start his own business one day.
So in 2013, he started CraftForce, with $30,000 of his own funds. He put his home up for collateral for a line of credit, so he could start hiring workers. He remains the company’s only investor.
How does it make money?
CraftForce actually hires skilled workers, then continues paying them wages once they are placed with an employer. The company pockets the difference between what it pays the workers and what the employer pays CraftForce to recruit them and handle their payroll and benefits.
CraftForce also makes money recruiting employees for direct placement at other companies. In the future, it hopes to make money licensing software it developed to manage the skilled-trades marketplace.
The company started the year with four full-time internal workers, most of whom work in Longworth Hall Downtown. It now has a dozen. It also pays up to 250 skilled trades workers in various locations, most of them within about 100 miles of Cincinnati.
What’s been the greatest challenge?
As you might expect, finding skilled-trades workers. How does CraftForce do it? “That’s the secret sauce,” Grutza said. It’s about hiring recruiters who can build relationships with trade schools and other organizations.
Expanding operations from the Midwest to the rest of the country, which Grutza expects will start happening in 2017. He expects to hire between five and 10 more internal employees in 2017.
“You start out crawling, then you walk,” he said. “I think we’re starting to hit a bit of a jog.”