12:01AM EDT October 15. 2012 - A
shortage of skilled manufacturing workers that's blamed for helping
push up unemployment is far smaller than believed, according to a study
out today.
The study by Boston Consulting Group (BCG) says manufacturers may have openings they can't fill, but it's not because workers aren't out there. It's because companies are being too selective about who they hire and are unwilling to pay a competitive wage.
JOBS REPORT: More stories on employment
The report acknowledges a mild skills gap. U.S. manufacturers could use an additional 80,000 to 100,000 highly skilled employees — less than 1% of all factory workers and less than 8% of highly skilled workers, the study says. Workers in highest demand are welders, machinists and mechanics.
But that's far less than the deficit of 600,000 skilled workers cited in a survey last summer by Deloitte and the Manufacturing Institute.
"There's a relatively small skills gap that can be managed," says BCG senior partner Hal Sirkin.
The study identifies only seven states with significant or severe worker shortages -- Alabama, Alaska, Hawaii, Montana, New Mexico, Nevada, and Wyoming. Most have small manufacturing bases, so new manufacturers must draw from sparse worker pools, Sirkin says. Only five of the 50 largest manufacturing centers — Baton Rouge, Charlotte, Miami, San Antonio and Wichita — are seeing a major shortage, the study says.
It says 58% of high-skill manufacturing and engineering jobs remain open at least three to six months. But Sirkin says that's partly because employers are not committed enough to hiring the workers.
A genuine skills gap would have pushed average annual wage growth 3 percentage points above the rate of inflation over the past five years, the study says, citing a common economic benchmark. Instead, manufacturing wages have grown roughly in line with a below-3% inflation rate.
"It's supply and demand," Sirkin says.
Also, he says, companies have sharply cut back training of entry-level workers. A skills gap, he says, doesn't exist if manufacturers can train young workers with solid math skills to run computer-controlled machines within a few months.
Rather, he says, manufacturers retrenched in the recession. They're producing more with fewer workers who are earning less, and doing little training after chopping human resource budgets. While they could use more skilled workers, they won't bust their budgets to get them and can do without them, Sirkin says.
The study warns there could be a severe shortage by 2020 as Baby Boomers retire and manufacturers bring more production to the U.S. from overseas — if training programs aren't expanded.
Jacey Wilkins, a spokeswoman for the Manufacturing Institute, says there's already a significant shortage, noting that even big manufacturers who can pay higher wages are struggling to find workers. Many job candidates, she says, lack basic math skills.
"Employers in any industry aren't going to pay for skills (job candidates) don't have," she says.
The study by Boston Consulting Group (BCG) says manufacturers may have openings they can't fill, but it's not because workers aren't out there. It's because companies are being too selective about who they hire and are unwilling to pay a competitive wage.
JOBS REPORT: More stories on employment
The report acknowledges a mild skills gap. U.S. manufacturers could use an additional 80,000 to 100,000 highly skilled employees — less than 1% of all factory workers and less than 8% of highly skilled workers, the study says. Workers in highest demand are welders, machinists and mechanics.
But that's far less than the deficit of 600,000 skilled workers cited in a survey last summer by Deloitte and the Manufacturing Institute.
"There's a relatively small skills gap that can be managed," says BCG senior partner Hal Sirkin.
The study identifies only seven states with significant or severe worker shortages -- Alabama, Alaska, Hawaii, Montana, New Mexico, Nevada, and Wyoming. Most have small manufacturing bases, so new manufacturers must draw from sparse worker pools, Sirkin says. Only five of the 50 largest manufacturing centers — Baton Rouge, Charlotte, Miami, San Antonio and Wichita — are seeing a major shortage, the study says.
It says 58% of high-skill manufacturing and engineering jobs remain open at least three to six months. But Sirkin says that's partly because employers are not committed enough to hiring the workers.
A genuine skills gap would have pushed average annual wage growth 3 percentage points above the rate of inflation over the past five years, the study says, citing a common economic benchmark. Instead, manufacturing wages have grown roughly in line with a below-3% inflation rate.
"It's supply and demand," Sirkin says.
Also, he says, companies have sharply cut back training of entry-level workers. A skills gap, he says, doesn't exist if manufacturers can train young workers with solid math skills to run computer-controlled machines within a few months.
Rather, he says, manufacturers retrenched in the recession. They're producing more with fewer workers who are earning less, and doing little training after chopping human resource budgets. While they could use more skilled workers, they won't bust their budgets to get them and can do without them, Sirkin says.
The study warns there could be a severe shortage by 2020 as Baby Boomers retire and manufacturers bring more production to the U.S. from overseas — if training programs aren't expanded.
Jacey Wilkins, a spokeswoman for the Manufacturing Institute, says there's already a significant shortage, noting that even big manufacturers who can pay higher wages are struggling to find workers. Many job candidates, she says, lack basic math skills.
"Employers in any industry aren't going to pay for skills (job candidates) don't have," she says.
