Thief River Falls' Digi-Key company: Keyed for growth
Thief River Falls, Minn.-based Digi-Key Corp. was hit with a wave of new orders shortly after the deadly tsunami hit the Japanese coast in March.
Anticipated shortages of the electronic components that Digi-Key distributes worldwide led to a big spike in orders for the local company as international customers, worried about the availability of electronic components manufactured in Japan, stockpiled supplies.
"There was clearly some panicked buying," said Mark Larson, Digi-Key's president. "Once the tsunami hit, shortages were anticipated. Some of those shortages never materialized, but the customers weren't going to take changes."
Larson said the frenzied run-up in orders was followed by a slower than normal sales period in May and June that has essentially evened itself out as customers used up the extra inventory before ordering more.
Sales are still up about 10 percent so far this year at fast-growing Digi-Key, one year after the company posted a meteoric 64-percent increase in sales.
Despite all the volatility in the national economy and international marketplace in recent years, Digi-Key continues to churn out consistent sales increases and add more employees.
Not even a tsunami has managed to slow the company's rapid growth.
Digi-Key reached a record of $1.52 billion in sales in 2010.
"It was a spectacular year," Larson said.
The economic downturn contributed to a drop in sales from $984 million in 2008 to $925 million in 2009 -- only the second time since it was founded in 1972 that the company has failed to increase sales from the previous calendar year.
But the company continued to grow during the recession, adding jobs and market share. During a six-year period Digi-Key has moved from the 16th-largest to the fifth-largest of more than 300 electronic component distributors in North America.
The company has grown sales by an average of more than 20 percent throughout the last two decades, a remarkable feat.
Digi-Key, one of northwest Minnesota's largest employers, has nearly 2,600 employees and is expected to surpass that number by the end of the year, an increase of more than 600 workers in the past two years.
The company hired 600 new employees in 2010 and earlier this year was planning to hire another 400 to 500. But Larson said he expects the company's net employment gain to be only about 200 this year, as the company replaces employees who leave. The turnover puts more pressure on the company to hire enough workers to continue growing as fast as it would like.
"Hiring the best people is always a challenge," Larson said. "One factor is the housing market is pretty tight in Thief River Falls. There are indications that it will improve in the next year or two. But overall I am very comfortable in our ability to recruit the people we need. I think Digi-Key is viewed very favorably. We have a strong benefits package. We are growing. Working conditions are good and we have a real nice business culture. We have been able to recruit very effectively."
Larson said the company has had more success recently in drawing employees from a wider area, including some from the Brainerd, Minn., and Little Falls, Minn., areas, as well as parts of the Twin Cities area.
But the company continues to seek workers from the Red River Valley. This week, a group of Digi-Key workers attended a job fair in Grand Forks, selling prospective workers on the benefits of working for the company while wearing matching red football jerseys with the company's colors on them.
"We are always actively recruiting," Larson said. "We are always looking for people interested in going into our product distribution center or inbound sales area, but we also offer a lot of specialty positions. As the business grows, there is more of a need for many niche specialties."
Schuster reports on business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107, or email email@example.com. Follow Schuster on Twitter at @RyanSchuster.