Silver Tsunami Washing Over the U.S. Workforce
It will take a creative and multi-tiered approach in partnership with communities, government, and educators for manufacturers to find the skilled work force they need.
Workforce Q2 2017
“The skills gap is the issue,” says an emphatic Eric Burkland, president of the Ohio Manufacturers Association. “If we don’t get that solved, then the rest doesn’t make much difference.”
“Maybe a few years ago, this survival thing wasn’t as clear,” Burkland observes, referring to the existential threat a lack of skilled workers is to many of his members. “But now it’s clear. The idea that we keep doing the same thing, running our businesses the same way — and not get our heads up and think about a different way to do it — is just not going to work. I think there’s more awareness of that now.”
With average hiring times for a skilled technician taking between two and three months, if you can find one at all, more and more manufacturers are taking a harder look at their hiring and recruiting practices, their corporate culture, community involvement, school partnerships, training regimens, or all of the above.
New Mindset Needed
The skills gap and an ageing workforce are not new news. Deloitte and the Manufacturing Institute issued their third report on the issues two years ago — the latest titled “The Skills Gap in U.S. Manufacturing: 2015 and Beyond.” They report the gap between available skilled workers and available jobs is widening — due to economic expansion and retiring baby-boomers. Bottom line, 3.5 million manufacturing jobs will need to be filled by 2025, but a lack of skilled workers means two million of them will go unfilled without some radical changes.
The idea that we keep doing the same thing, running our businesses the same way — and not get our heads up and think about a different way to do it — is just not going to work. I think there’s more awareness of that now. Eric Burkland, president, Ohio Manufacturers Association Let’s face it. Manufacturing hasn’t done itself many favors in the PR department. Put yourself in the shoes of an 18-year-old (or his or her parents) considering the future. For years you’ve heard college is the pathway to greater financial success. And, for the most part, that’s been true, according to the Bureau of Labor Statistics. Couple that with old, yet persistent, impressions that manufacturing is “dirty, dumb, and dangerous;” a service economy that employs 10 times more people than manufacturing; and manufacturing’s penchant to chase cheap labor and abandon American towns — maybe your own hometown — Is it any wonder that young people making big decisions about their futures aren’t flocking to manufacturing as a profession?
Is the situation hopeless? No, but it will take a laser-like focus on recruitment, retention, training, and talent development if manufacturers hope to survive in the coming decades. The same attention that’s been paid to automating and lean manufacturing now must be brought to bear on the human side of the equation.
A Novel Approach
One manufacturer not doing things the same old way is Turner Machine Company in Smyrna, Tennessee. Company founder Jeff Turner realized he wasn’t getting the kind of talent he needed through traditional “post and pray” job boards and advertising. Instead of waiting for the right candidates to find him, Turner turned the process on its head. Based on his own experience, he realized the kind of employee he needed was, in his words, a “gearhead.”
Gearheads, says Turner, are problem-solvers and multitaskers. They are those people who revel in knowing how things work and take pride in their machines; more often than not, their cars. So Turner visits car shows and NASCAR races to find the “gearheads” he’s seeking — “great places to engage with the individuals in a more casual element,” he writes for Manufacturing.net. Turner also engages his employees’ passions through a company-sponsored car show where his employees show off their custom cars during an open house for customers and the local community.
3.5 million manufacturing jobs will need to be filled by 2025, but a lack of skilled workers means two million of them will go unfilled without some radical changes. In one of the more novel approaches to running a machine shop, Turner invites his “gearheads” to participate in regular book studies on company time. They read the latest on team-building and other topics then gather round to discuss their insights — all the while, building an esprit de corps that will pay long-term benefits in employee retention. Turner’s office manager, Joy Wildes, runs the “Better Book Club,” and says each book is assigned a point value. Each point is worth a dollar — and employees are paid the dollar value of each book as they read them.
“We actually pay our employees to read,” she says. “It’s totally off the beaten track” for a machine shop, she says, “but our guys really enjoy the quarterly book club meetings we have.” The meetings are a way to level the playing field across the company as machinists, sales reps, and executives all share a common experience and embed the company’s culture. Is it working? “It sure is,” says Ms. Wildes. “We keep track of our turnover rate and it’s drastically dropped in the two years we’ve been doing this.”
The skills gap alarm bells are also ringing loudly in the halls of government. President Trump was told by visiting manufacturers in February that they have the jobs, but can’t find people with the skills to fill them. The federal response has been $1.4 billion in “Investing in Innovation” grants to school districts and training providers to gear up STEM education, improve career pathways, and strengthen the pipeline of students to jobs. This year, the name has been changed to the Education Innovation and Research (EIR) grant competition, with $180 million budgeted for innovative programs.
In Ohio, a consortium of 23 technical training centers known as RAMTEC, the Robotics & Advanced Manufacturing Technology Education Collaborative, is applying for an EIR grant to, as Superintendent Chuck Speelman says, “develop a national curriculum that isn’t a one vendor-driven curriculum” for robotic and advanced manufacturing skill development. Speelman’s plan is to work with experts from across industry to develop a common baseline for instruction on collaborative robotics, among other automation innovations. “We’re finding out,” he says, “the reason no one has done this — it doesn’t exist — is it’s a lot of hard work! If there were quick solutions, it would have been done already.”
“It’s about engagement,” says Speelman. “It’s about building a feeder system. One of the other parts of this grant is doing a whole lot more with early engagement, STEM education, hands-on opportunities with kids from fifth grade on.”
States and their governors are also taking note. In March, Alabama announced its “65 by 2025” initiative. Noting that only 37 percent of Alabamians aged 25 to 64 have a post-secondary degree or certificate, the Alabama Workforce Council aims to nearly double that to 65 percent in eight years. The council is in the process of developing a strategic plan to accomplish this goal. Similarly, Ohio has launched its “65 percent Attainment Goal 2025” project seeking to raise the percentage of working-age Ohioans with post-secondary degrees or certificates from the current 43 percent to 65 percent by 2025. The nation’s overall post-secondary attainment rate is 45.3 percent.
President Trump was told by visiting manufacturers in February that they have the jobs, but can’t find people with the skills to fill them. The Alaska Postsecondary Access and Completion Network, noting that Alaska is 49th among the states for postsecondary completion has also adopted a “65 by 2025” initiative. Key to Alaska’s effort is putting school districts, state agencies, businesses, and postsecondary institutions under the same tent so efforts to increase certificate and degree completion are coordinated. Among the specific actions is more training for high school counselors on various postsecondary pathways for their students.
Tennessee’s “Drive to 55” campaign seeks 55 percent degree or certificate attainment by 2025, in part through a program of installing additional college counselors in 30 public high schools across the state.
The Indiana House of Representatives recently passed a “Workforce Ready” grant program that, if approved by the state Senate and Governor Eric Holcomb, would fill the gap between a student’s financial aid and tuition bill for those students taking certain “high value” certificate programs that would be determined by a commission looking at wage and employment data.
Additionally, an age-old approach to skills development, apprenticeships, is making a comeback, although tailored to the 21st century. ApprenticeshipUSA is a division of the U.S. Department of Labor and features a network of 150,000 employers offering apprenticeships across a thousand different occupations. The program offers $90 million in State Expansion grants.
Value of Community Colleges
One of the surprising voices advocating for community college degrees is the Cambridge-educated dean of the College of Engineering at The Ohio State University, which graduates more than 2,300 engineers annually. In his distinctive British accent, Dr. David Williams scolds his fellow university professors. “In universities, generally, the feeling has been that you go to community college if you’re too dumb to go to university. I disagree with that fundamentally,” he said in a recent interview. “There are multiple essential areas where a two-year community college education will give you a skill set that’s extraordinarily valuable and that people will pay to use.”
Williams continues: “So, I think there’s a lot more selling to be done about the value of the two-year system. Part of the challenge, however, is that the degree completion rate for young men and women in the two-year system is not really very good. And that might be a combination of family backgrounds, fiscal backgrounds. The understanding of the need to study hard in community colleges as well as at four-year colleges is perhaps just not there.”
The “silver tsunami” is now at the acute stage. The skills shortage now has manufacturers’ full attention. They are the same manufacturers, however, who have adapted to other challenges like globalization and advanced automation. There isn’t one answer to finding the skilled workforce they’ll need going forward. It will take a creative and multi-tiered approach in partnership with communities, government, and educators.
2023 Top States for Doing Business Meet the Needs of Site Selectors
The Rise of Mid-Size U.S. Cities: The Industrial Development Boom
Front Line: Brownfields Offer Redevelopment Opportunities
2023 Top States Commentary: Top-Ranked States Have What It Takes to Win Mega Projects
37th Annual Corporate Survey: Economic Pressures Exerting Greatest Effect on Decision-Makers
2023 Top States Workforce Development Programs
Immigration: A Potential Fix for Labor Shortages?
Workforce Q4 2023