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Oct 20, 201611:35 AMMaking Madison

with Buckley Brinkman

When the skills gap becomes a body gap

We face a serious challenge to our economic future. Our skills gap is quickly changing into a body gap. Wisconsin addresses the skills gap as well as anyone in the country. Unfortunately, all of this effort will not be enough to overcome changing demographics. A shrinking workforce will require companies to improve productivity by almost 30% in order to maintain our present lifestyle. Making this transformation requires a new integrated approach, centered on three Ts: talent, technology, and techniques.

Wisconsin has built great alliances between industry, education, government, and other invested organizations to create effective approaches to train available workers to fill needed positions. There are many robust solutions in motion. They work together to engage the best possible workforce. These solutions take practical — not theoretical — approaches to deliver real results. My travels and discussions with people throughout the country validate the fact that Wisconsin leads the pack when it comes to workforce development.

Unfortunately, the demographics tell us that we are missing 20 million people in our workforce because Generation X accounts for only 70 million people — not the 90 million expected from historical trends. In Wisconsin, that translates to workforce numbers that will remain flat — at best — through 2024. That means modest 3% economic growth will require a 29% increase in productivity during the same period. Some experts think the workforce could actually shrink by as much as 40%. A shrinking workforce makes the situation even worse.

These numbers paint a dark picture, requiring productivity improvements not seen in the U.S. in 40 years. If we don’t reach these levels, Wisconsin economic growth will stall and our standard of living will fall.

Conversely, this situation also presents a tremendous opportunity for us to transform our communities. We will need every possible worker to fill available slots, requiring us to tap atypical sources to grow our workforce. This demand creates a once-in-our-lifetime opportunity to pull large populations out of poverty and into the middle class. It’s a daunting challenge, requiring diligent, focused effort. Still, the hard work can create huge rewards.

Our ultimate success depends upon an integrated approach to talent, technology, and techniques. In the past, companies could be successful by mastering one of these Ts. Now, companies must master — and integrate — all three into their business models. It’s not enough to approach these elements individually. Complicating the situation is a misconnect between manufacturers on the front lines and solution providers. Most solutions are siloed approaches, championing a single product or agenda. Most manufacturers have the perspective to create an integrated approach, but lack access to the most effective solutions. It’s important to synthesize integrated approaches and that requires a different mindset from the key players. I believe that change is coming and we will take advantage of our leadership position.

Wisconsin is well positioned for the future. We have some of the best and strongest manufacturers in the world, our key players cooperate on difficult issues, and the infrastructure exists for a comprehensive approach to talent, technology, and technique to address the body gap. Our ability to take effective action will revitalize Wisconsin’s economy and secure a bright future.

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Oct 20, 2016 05:05 pm
 Posted by  Anonymous

Of Wisconsin's 72 counties 60% had birth rate declines between 2000-2015- note these were not just rural counties but also places like Milwaukee,and Waukesha . The biggest gain was in Dane one of the few places to hit 3 digit increases. In most counties declining birth rates mirrored work force declines so the problem is very real. A recent study by the Department of workforce development on what is a basic cost of living in each county is also interesting as it shows a major dislocation in many places between state welfare to work subsidy formulas and the actual cost to live in a county. There are also implications in terms of what is a workable entry level wage for many jobs. One problem no one talks about and is largely ignored in these discussions is that we need to attract younger workers with needed skills into many counties where there is no basic infrastructure like child care or preschools. Another interesting issue is looking at cost of living here versus places where we may be needing to attract workers from (because the state is probably not going to produce them) I believe costs in Dane have risen so that we are not as competitive to areas like around Chicago as we were in the 1990s. Rents in sections of the loop in Chicago are the same as the new high end apartments going up here - the difference is if you have skills there are a lot more opportunities for employment in Chicago- these are some of the issue that need to be seriously discussed as we explore the state's options for economic development.

Oct 24, 2016 08:02 pm
 Posted by  P. Buckley

All of these are great points.

A couple of reactions to your comments. First, the urbanization issue is real, growing, and global. Infrastructure, social and cultural opportunities, and geographic proximity all pose serious challenges for rural areas. This is such a major issue that workers are being bussed from Milwaukee to Sheboygan to fill open positions. A significant portion of the Wisconsin economy depends on rural communities and these communities are fighting significant headwinds.

My second point is more optimistic. Economic data still shows that Wisconsin holds a significant cost of living advantage over neighboring states (even Madison v. Chicago). That bodes well for companies attracting top talent and remaining competitive from operating bases in Wisconsin. Illinois suffers from some serious budget challenges that will need to be addressed in coming years. Right now, the accumulated liability amounts to more than $50,000 per person. Last year 18,000 people fled the state, due in part to these issues.

Thanks for the comment!

Buckley

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About This Blog

Buckley Brinkman is executive director and CEO of the Wisconsin Center for Manufacturing & Productivity and writes about the manufacturing sector in Greater Madison and throughout Wisconsin. He has a breadth of experience in helping companies drive growth, world-class competitiveness, and performance excellence, and has led efforts to save dozens of operations in the U.S. by finding new ways for them to compete. A Wisconsin native, Brinkman holds a business degree from the University of Wisconsin and an MBA from the Harvard Business School.

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