8 ways that manufacturers can prepare a new generation of workers for a smarter and stronger manufacturing future.The public may find it counterintuitive that even while the unemployment rate is persistently high, hundreds of thousands of manufacturing jobs go unfilled. But manufacturers are acutely aware that rapidly deployed new technologies, major demographic shifts, and corporate globalization have employers scouring for qualified candidates. It's estimated that as many as 600,000 manufacturing positions are currently unfilled in the U.S.
Without a domestic source of critical manufacturing skills, many firms have gone and will continue to go offshore, where the desired talent is abundant and affordable. But American producers can capitalize on these current conditions to cultivate the talent they need to stay competitive. Here are eight steps that manufacturers can take now to begin to narrow the skills gap and lay a foundation for growth.
- Take an Intergenerational Approach The two biggest demographic pressures on the jobless rate are the bookends of the workforce: the 16-to-24-year-old would-be new entrants who need the skills to take on increasingly complex tasks but lack the experience and training to do so; and the 55-and-older mature workers who are seasoned and proven, and whose numbers are dominant. The so-called "gray talent" will drive 90 percent of the increase in the U.S. labor pool between 2008 and 2018. Their younger counterparts have actually reduced their percentage of workforce participation in recent years -- some are staying in school longer to prolong the time when they have to seek gainful employment. Others have simply given up the job search. The surge of more senior talent, the baby boomers returning to the workforce, is due in part to sheer demographics. Having come of age, the boomers are living longer, and they are extending their working lives. Financial pressures, exacerbated by pummeled pensions and the prospect of living 35 or 40 more years, have pushed many millions of boomers back into the job market. Members of this fast-growing group may not necessarily want replacement earnings, but they need to supplement what so many have found to be meager retirement incomes. C-suite executives, managers, and supervisors who see these seemingly competing forces as complementary recognize that the intergenerational workforce is not only inevitable, it will characterize American labor for decades to come.
- Communicate the Consequences Of the Skills Gap Contrary to assumptions that manufacturing is anemic, the numbers clearly demonstrate that it is vigorous and vital to the economy's overall health. U.S. producers made a $1.8 trillion difference in the GDP last year, representing almost 12 percent of total economic output. They paid higher wages than employers in many other sectors, employed 11.5 million Americans, and supported almost 7 million jobs in other industries. What accounts for this multiplier effect? Labor economists quickly point to manufacturing supply chains, which are larger and longer than in other sectors. The U.S. Labor Department's Bureau of Labor Statistics (BLS) calculates that for every dollar of value created in manufacturing, $1.40 is created in associated sectors of the economy. Manufacturers account for roughly two-thirds of U.S. R&D expenditures, and employ more engineers and scientists than any other private-sector industry. The sector's goods make up more than half of U.S. exports and drive more net-wealth creation than any other part of the nation's economy. But the skills gap throttles back this important economic engine. Lacking adequate, if not superior supplies of human capital, and mired in a recession/slow-to-rebound economy, American manufacturing firms have focused on their survival and their shareholders, and sought the most expedient ways to address their talent shortages. And while many firms remain at the forefront of technology (think computers, medical devices, chemicals, machinery, aerospace, and military equipment), that lead is narrowing. The nagging U.S. manufactured-goods trade deficit portends tougher times, unless it is reversed. In 2010, the nation ran an $81 billion deficit in high-tech manufactured products alone. This was a reflection of the talent gap, as were the consequential 687,000 high-tech manufacturing jobs the U.S. labor market lost to overseas production. That's a 28 percent decrease in the base of talent capable of producing high-tech, high-value good. That dearth of skilled workers threatens national infrastructure and industrial competitiveness. The American Welding Society estimates that by 2014, for example, there will be a 500,000-worker shortage in welders. This shortfall reflects a critical and growing need for a wide range of welding skills across many occupations, from the most rudimentary storm sewer repair jobs to the most sophisticated PhD-level positions at nuclear reactors. It's the same story in the utilities sector -- from water to electricity -- which stands to lose half of its workers over the next decade. And those in conventional energy sector jobs, from power-plant operators to transmission and pipeline workers, are retiring at a much faster rate than they are being replaced. And as the Council on Competitiveness' latest Competitiveness Index warned, many of these are middle-skills jobs. These are nuclear electricians, hydraulic and electrical systems workers, and the rich ecosystem of people who make and run what we use every day -- from life-saving tubing hookups in hospital rooms to the bridges we cross. These are not jobs that can be offshored.They must be filled right here. And despite the premium put on job creation through highway construction and smart-grid investments, we cannot build more infrastructure if we cannot even staff the maintenance and repair positions needed to care for what we've already erected. Once manufacturers become authorities on this narrative, they will position themselves as a compelling career choice.
- Do an Environmental Scan of Your Workforce Manufacturers, from large multinationals to small businesses, can easily avoid setbacks in productivity and shortfalls in the talent they require by doing thorough assessments of their current human capital capacities and future needs. According to Boston College's Sloan Center on Aging & Work, 40 percent of employers are worried about how the qualified worker shortage impacts their company's bottom line. Yet more than two-thirds of the employers surveyed by the center said they had not looked at changes in their firm's human-capital demographics makeup, nor had they made any assessments about just what those changes might mean. Here's what every employer should be asking:
- Do you know who your current workers are? Their demographics? The tenure of your average employee? Is there a bifurcation of talent -- new entrants with limited skills and mature (post-50) workers who are more seasoned?
- With employee retirements, does your company suffer from the loss of institutional knowledge? Productivity losses? Systems compromises or failures?
- What is your current workforce's capacity to learn new skills? What is your employees' level of education? Do they need remedial help? Are they technically trained? Is English their second language?
- What are you doing to keep your company competitive in the next three to five years? How does your workforce figure into those plans?
- Will your operations become increasingly automated? What is the impact of technology on your current employees?
- Are you developing new products and services requiring a different or refined set of skills? Are you training incumbent workers and new hires internally, or do you rely on third parties for training? Have you examined the short-term costs of training? Have you determined the long-term benefits?
- How do temporary workers fit into your workforce equation? Statistics show that companies are hiring skills rather than people, hence the increasing reliance on contract engineers rather than full-time employees. Have you evaluated the true work-readiness of temporary workers, and conducted a cost-benefit analysis of paying the premium for temporary workers versus adding new staff ?
- Are there economies of scale that you, as an individual employer, can realize by sharing resources and costs with other local employers -- for training and even for workers themselves?
- If you do not have the workforce you need, are you tapping into a pipeline of talent?
- Perform effective entry assessments of students to determine the most realistic and effective career pathways.
- Expedite student connections to the job market with relevant coursework, certifications, and just-in-time training offered in the classroom, offsite, and online.
- Offer accredited programs that capture and cultivate student interest in STEM/manufacturing, and award post-secondary credits to high school students who work with mentors to learn entry-level trade skills.
- Enter into strategic partnerships with national and/or local industry that lead to well-informed curricula that reflect job market demands and offer access to an array of in-kind support. This support should include teacher training, industry professionals and tradesmen/women as teacher and student mentors, simulators, facilities, work-study programs, and internships.
- Track and report metrics that show the correlations between field of study/mentoring/job placement/employability of graduates.
If, as a recent study asserts, 41% of current workers are confounded by what it will take to prepare for the jobs of the future(5), potential new entrants must be lost as they search for a good career fit. Now is an opportune time for manufacturers to help them find their way.K-12 Education That Works for Manufacturing
Located in the shadow of Lawrence Livermore National Laboratory, the Tracy Learning Center in Tracy, Calif., exemplifies the kind of K -12 school that creates talent for a robust manufacturing sector.
With 1,200 students wedged into a dilapidated old one-level building, the school is short on resources but long on creativity. Its experiential learning focuses on mastery, not pace, and its team-based, interdisciplinary classes turn out workforce-ready graduates who can think critically, compute, and create.
While Tracy does not "teach to the test," it boasts higher test scores than the California state averages. The school's dropout rate is zero; indeed, most students graduate with community college credits, some with a full year under their belts.
Graduates are bound for the trades or funneled into more education, significantly in the STEM fields. They are propelled by the school's requirement of 200 hours of internships and courses in finance, investment, and writing a small business plan. This summons a powerful sense of can-do in students, who engage with mature mentors in their chosen fields -- in science labs, on factory floors, in architectural engineering firms, with patent lawyers, in medical technology centers, and beyond.
The Tracy Learning Center also works closely with community resources including the nearby Livermore National Lab, where it networks with the lab's scientists and occasionally gets access to Livermore's facilities.
The school reports that 1,500 families are on its waiting list.