The other employment crisis: In manufacturing, high-skilled labor is increasingly hard to find

Coming out of one of the most enduring and destructive economic downturns since the Great Depression, it might seem odd to talk about a labor shortage, but that’s exactly what many industries are facing – and it could get worse if and when the economy swings into full recovery mode.

According to David DeLong, co-author of The Executive Guide to High-Impact Talent Management: Powerful Tools for Leveraging a Changing Workforce and the keynote speaker at next week’s Wisconsin Manufacturing Extension Partnership (WMEP) Manufacturing Matters! Conference, many manufacturers face a present and looming threat to their growth because of a shortage of experienced welders, machinists, and other highly skilled laborers. In short, says DeLong, there’s currently a mismatch “between what skills the workforce has and what skills management and companies need.”

DeLong identifies three key factors that are contributing to this problem: 1) The workforce is aging, 2) manufacturing jobs are becoming more complex and sophisticated, and 3) young people are simply avoiding careers in manufacturing.

“First of all, you’ve got 76 million baby boomers heading out the door, though some of them have slowed their departure time,” said DeLong. “Secondly, you’ve got an increasingly complex workplace with more technology, changing technology, and more sophisticated technology, operating in global markets, with more suppliers and customers – all factors that make the skill sets needed to be effective in today’s organizations that much more complex. So a lot of these are skills that workers who have been in the workforce for many years haven’t necessarily developed.

“What’s happened is [that] a lot of young kids or younger adults are choosing not to go into manufacturing fields or technical fields that don’t require a four-year college education but which present the opportunity of a terrific career, a pretty steady salary.” – David DeLong, co-author of The Executive Guide to High-Impact Talent Management

“The third factor is, you have, I think, in this country undersold the value and importance of skilled trades, the opportunities for productive careers in those fields. So what’s happened is [that] a lot of young kids or younger adults are choosing not to go into manufacturing fields or technical fields that don’t require a four-year college education but which present the opportunity of a terrific career, a pretty steady salary.”

Of course, the notion that manufacturing might hold promise for a new high school graduate runs counter to a stubborn public perception, which holds that manufacturing jobs tend to be dirty, unpleasant and, perhaps worst of all, unstable. But while the day when a new high school grad could easily step into a secure, good-paying job at the local mill or foundry may be gone, plenty of opportunity still exists in manufacturing, says DeLong.

“Obviously, there have been a lot of manufacturing jobs lost,” said DeLong. “But what isn’t understood is not all manufacturing jobs are going away. There are certain fields and certain high-end manufacturers where people produce things – such as more customized products, niche products – where a long supply line to China is not a viable option for your customers who need supplies in a short time frame, so they need suppliers or manufacturers who are close by.

“So there are certain manufacturing fields and opportunities that are tremendously promising in Wisconsin today and in the country today. The problem is people hear industry has gone to hell, and they assume, well, that’s not a place I want to invest my future. But in reality there are some tremendous opportunities in manufacturing.”

Addressing the issue

For those who might still have a hard time wrapping their heads around the idea that jobs are going begging while idle hands litter the employment landscape (after all, the national unemployment rate is still hovering at around 9%), the cries of desperation that DeLong hears in the field from employers might be revealing.

“I interviewed a Wisconsin manufacturer last week that had a machine operator who was about to retire, and it was going to cost the company $500,000 in lost revenue annually because he was the only person who knows how to run a certain machine,” said DeLong.

Unfortunately, says DeLong, that example is more representative of the problem than a lot of people would like to think. There’s a steep learning curve when it comes to many of today’s skilled professions, and that’s making many manufacturers very nervous.

“You’re losing experienced people who are unique in their knowledge about running particular machines or particular processes,” said DeLong. “There’s nobody who can take over who can step right in. They’re going to make mistakes, or they’re not going to know the answer. A lot of Wisconsin manufacturers do customized work, so you need people who are creative who know enough about the manufacturing technology that they can solve customers’ problems. That is best done by experience.”

While the problem is endemic, DeLong says there are some steps businesses can take to prepare themselves.

“First of all, companies need to isolate the problem,” said DeLong. “What are the specific roles that are most critical to driving the business? You may have a hard time finding an accountant, but that isn’t a threat to your business growth. Sometimes managers or executives will say, ‘Oh, I can’t get good people.’ Well, let’s narrow that down. What do you mean you can’t get good people? For what jobs? So we’ve got to be really specific and pinpoint where the skill shortages are that are most critical to the business, not just where they’re annoying.”

Next, says DeLong, companies should identify what pool of knowledge and which capabilities are most at risk of going away.

“Do you have anyone in the company left with those skills, and are you doing whatever you can to help those experts better transfer their knowledge?” said DeLong. “For starters, are you reassuring them they aren’t going to be eased out the door when you ask them to teach others? A universal concern for veteran workers who are being asked to share their knowledge and train younger workers is that they’re being prepared for being laid off, particularly if the company has a history of layoffs.”

DeLong said it’s also important to eliminate bad hires, which can be extremely costly when it comes to jobs where it takes a long time to train employees, and to try to get out in front of the problem by reaching out to local schools.

“Other things [manufacturers] are doing are building relationships with local technical schools or community colleges that have training programs that are relevant,” said DeLong. “Another manufacturer – three of the members of their executive team are on the boards of directors of local technical colleges so they can influence the curricula of those schools to make sure they’re developing the kind of skilled graduates that they need to hire.”

And sometimes, it seems, you just need to be more creative than your competitors.

“If you can’t find a good replacement, you have to think about acquiring a new pool of talent from another area,” said DeLong. “I interviewed one company, a Wisconsin manufacturer that uses a lot of welders but couldn’t find them locally, so they actually went to another part of the state and bought the assets of a company that had recently closed because it had a lot of welders. They opened a new site there, and it was great for the local economy.”

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