As a shortage of skilled workers continues to plague the manufacturing industry, one Madison-based startup is looking to close the gap with its online labor marketplace.
FactoryFix is a recruiting and hiring platform that connects manufacturers to skilled workers. The platform’s purpose is two-fold: it streamlines the manufacturing hiring process by vetting candidates, providing salary insights, generating job listings, and other tools to help fill the applicant pipeline. And it allows job seekers to create profiles to better match with employers that fit their skillsets and maximizes their earning potential.
The result is an onboarding process that is faster and more affordable than hiring through a traditional staffing agency—something that could cost roughly 20-25% of an employee’s annual salary—and eliminates the nuisance of handling hiring in-house, explains the company’s founder and CEO, Patrick O’Rahilly.
Addressing the skills gap remains a priority for manufacturers. Even as Covid concerns continue to slow productivity, most plants are operational—and more than 50% of manufacturing leaders citied hiring as a top concern over the next 12 to 18 months, according to the National Association of Manufacturers Outlook Survey for the second quarter of 2020.
“One of the things we’ve done is changed the business model,” O’Rahilly says by phone. “Your traditional agency is pretty expensive and is often temp-to-hire. That’s tough in today’s environment. By eliminating that big headhunting fee, we’re pushing companies to hire directly, and that’s what the workers want, too.”
FactoryFix began as a side project for O’Rahilly, who first launched the startup in 2018.
When he graduated from college nearly a decade earlier, O’Rahilly found himself in a job market still grappling under the Great Recession. Despite the uncertainty, one thing was clear: he wanted to become an entrepreneur, just like his dad.
He and a group of high school friends then launched Compass Automation, a company that provided custom-built industrial robots and automation equipment for the manufacturing industry. It took nearly a year for the startup to land its first sale, O’Rahilly says.
“Basically coming out of school, we just had nothing to lose,” he adds. “The margins weren’t great at first, but we thought ‘What the heck, we’ll give it a shot.’ We finally got one purchase, then the next one, and it got compounded.”
"We’re trying to help with an important problem and bring an innovative solution to solve it."
Soon, the group of high school friends had a successful business on their hands. Along the way, O’Rahilly says customers began asking the company if they could recommend a technician or programmer to assist with on-site projects.
“I got to feel the pain of hiring firsthand,” he says. “When we could send someone it was great, but we didn’t have time to do it ourselves. I grew a network for people who could do independent work. It was me on the backend connecting people, just playing matchmaker.”
O’Rahilly says he created a simple Wordpress website to facilitate the requests. In the meantime, the growth of Compass Automation accelerated and eventually sold. O’Rahilly decided to take his idea for a manufacturing labor marketplace and turn it into his next business.
In 2018, he entered the gener8tor accelerator program in Milwaukee, where he was introduced to Tim Nott, now FactoryFix’s CTO, who helped transition the startup from a low-tech platform into a sophisticated technology solution. The two hit the ground running, joining manufacturing associations, and reaching out to their connections in the manufacturing industry with its revamped SaaS product. Addressing the labor shortage remains a top priority, he says.
“It’s a big industry but it’s tight-knit,” says O’Rahilly. “We speak their language. The painkiller is finding skilled talent. We’re trying to help with an important problem and bring an innovative solution to solve it. It’s an old-school industry, but it is starting to come out of that.”
In the two years since launching, FactoryFix has gained more than 200 manufacturing clients who use its platform, and it built a database of more than 100,000 skilled manufacturing workers, something that caught the attention of investors early on.
To date, FactoryFix has raised more than $4 million from its venture firm and angel investor partners. A second funding round could be in the startup’s future, O’Rahilly says. Until then, the company is focused on growing its presence across the Midwest, and expanding its platform to include “upskilling” opportunities for workers in an increasingly technology-driven environment.
“It’s a really exciting time because we’ve started this movement where we have really great traction in Illinois and Wisconsin and the ROI case we make is really good,” he adds. “It really is shifting the marketplace. We’re here now and I want to keep it going.”
