C-Level: Pay Raises Fuel Better Production for Quad

Joel Quadracci with employee Art Hudson, an employee retention and acquisition specialist for Quad’s Sussex facility.

As a professional journalist, I spent more than three decades interviewing local business executives about the strategies they use to grow their companies.

The interviews often ultimately focused on two basic questions: Why? And how?

Today, we’re reviving that journalistic endeavor with the reincarnation of my C-Level column that will highlight how dynamic executives are leading their organizations into the future.

In a way, this inaugural column in my new role as director of executive communications at Kane Communications Group is a step back in time, as it features the winning strategies of Joel Quadracci, chairman, president and chief executive officer of Sussex-based Quad/Graphics, Inc.

Over the years, I interviewed Joel’s father, the late Harry Quadracci; Joel’s mother, the late Betty Quadracci; and Joel’s uncle, Tom Quadracci. 

Joel popped back up on my radar this week with the company’s latest quarterly earnings report.

In the conference call accompanying the fourth-quarter report, Quadracci noted that back in late 2018, Quad decided to invest $40 million to boost the entry-level wages of its hourly employees to $16 per hour.

A year later, what impact did the pay raises have on the company?

“We had one of the best quarters in the past decade in terms of customer service performance, achieving strong quality and on-time delivery performance for our clients in their busiest season. This strong performance is due in large part to our decision to invest $40 million to increase hourly production employees’ wages as we saw significant productivity gains throughout the quarter. Given this performance, we ended 2019 with net sales, adjusted EBITDA, and free cash flow exceeding revised 2019 guidance and we reduced our debt leverage ratio to 3.1 times,” Quadracci told analysts.

“We continue to engage and power our employees to find a better way every day. We foster an environment that encourages employees to embrace Quad’s culture, continuous improvement, and an effort to not only drive ongoing productivity improvements but also product, service and technology innovation, all of which help our clients succeed in today’s evolving marketing landscape,” Quadracci said. “I want to take a moment to thank all of our employees for their dedication and hard work to make certain we delivered strong customer service performance in the fourth quarter. They were able to deliver top quality products with low waste, shipped on time, and they accomplish all of this while hitting a historic record across all safety metrics. Congratulations and thank you to all our employees.” 

Quadracci is transforming the company through a strategy he calls “Quad 3.0,” which is morphing the firm into a “marketing solutions partner with a strong foundation in print.” 

In the past year, Quad sold its packaging plant in Omaha, Neb., after deciding to divest its book and industrial wood crating businesses. 

According to a report by BizTimes Milwaukee, Quadracci said the company has seen increasing customer interests for more targeted print products, including catalogs and direct mail. You’ve probably noticed rising amounts of retail flyers in your postal mailbox over the past year, even as daily newspaper circulations continue to shrink. 

Someone’s got to print those flyers. Enter Quad/Graphics.

In other words, with all the noise cascading through our social media channels, more companies are finding that print campaigns targeted to the right audience can help them cut through the clutter. 

The executive take-away question to be pondered for this week: If your employees received a pay raise, would they become more productive and loyal to your organization? 

Steve Jagler is director of executive communications at Kane Communications Group in Milwaukee. He helps executives nurture and grow their professional brands through the use of effective internal and external communication strategies. He can be contacted at (414) 635-7017 or steve@kanecommgroup.com.