Aging workforce: How will companies, workers cope?
A proactive approach to a skills deficiency is imperative for a company hoping to remain competitive. Let's face it, many industrial companies will be competing for the same group of skilled workers in the future. Here are five steps to help you survive a pending skill shortage in your company.
Dave Smith retired after 30 years of service. Dave had worked his way up from a maintenance mechanic, to a supervisor, and eventually superintendent in charge of all maintenance efforts at the plant. He remained a source of knowledge for everyone, even after entering management positions. As a mater of fact, it was very common to find a group of people crowded around Dave while he personally solved a problem or repaired a piece of machinery.
People at the plant found themselves at a tremendous loss soon after Dave’s retirement. Dave was called at home almost daily to answer what should have been routine questions. Only six months after retiring, Dave was hired back as a consultant to the plant. The big surprise is the company is now paying more money for Dave now than before he retired.
It is probably obvious that what Dave learned and applied throughout his career had not be passed on %%MDASSML%% or even learned independently %%MDASSML%% by other maintenance employees at the plant. Dave had attained tacit knowledge through his years of service. Tacit knowledge is derived from subjective insights, intuitions and hunches. As such, it is highly personal and not easily expressible to others. Normally, we do not concentrate so deliberately on the physical motions we make. Shut your eyes and try to touch the tip of your nose with your index finger. Most people are able to touch their nose the first time. This tacit knowledge, acquired at an early age, has become automatic. On the other hand it would be particularly difficult to write an essay on how you touch your nose with your eyes closed. We are all very good at doing things tacitly.
Experienced maintenance workers have acquired tacit knowledge: activities that made them proficient at their job. Activities most of them take for granted were learned over time and became a part of their skill set. Very basic skills such as knowing which way to turn a bolt to tighten or loosen it are honed at an early age. More complex skills become part of their tacit knowledge with training and practice. An electrician who quickly troubleshoots motor control circuits is using a higher level of tacit knowledge that has been honed by practice.
Many companies like Dave’s fail to realize the importance of tacit knowledge in their employees until they are gone. This knowledge loss is now being compounded with the looming shortage in skilled trade labor. With fewer young workers entering the skilled trades, many maintenance jobs will go unfilled. At the same time, the few new workers entering maintenance do not possess the skill set needed to replace those retiring.
A scarcity in maintenance labor will develop during the next five to 10 years as the Baby Boom generation begins to retire. The Baby Boom describes the period after World War II when the population in North America increased dramatically. The Baby Boom generation is a demographic group born between 1946 and 1964 that has had %%MDASSML%% and is still having %%MDASSML%% a major influence on the economy. The buying habits of this group is said to have spawned everything from fast food restaurants to superstores.
The Boomers also became a driving force in the manufacturing revolution. The needs of industrial expansion demanded less manual labor and more skilled industrial workers. Technical colleges and trade school attendance increased in the 1950s and 1960s to meet this need. The result was an economic expansion that remains unprecedented in modern history.
A study conducted by the Hudson Institute ( www.hudson.org ) reports that 30% to 40% of the maintenance employees currently working in North America will be retiring during the next five years. The demographics of the workforce is a cause for alarm to many companies, where the average age of an hourly employee is 44 to 48.
Compounding the issue, young people are not entering the maintenance field. During the past several years, jobs related to manufacturing have not been perceived as a viable opportunity. The manufacturing sector has been tied to an old stereotype of the “assembly line” jobs.
In a 2003, survey conducted by the National Association of Manufacturers ( www.nam.org ), respondents describing the images associated with a career in manufacturing offered phrases such as “serving a life sentence,” being “on a chain gang” or “slave to the line,” or being a “robot.” The study also found that young people are discouraged from pursuing skilled trade positions by their parents and school advisors in favor of entering into universities to work in white-collar jobs.
The inability to find skilled labor was the cause for approximately 300,000 jobs remaining unfilled in 2000, according to the Canadian Federation of Independent Business. The Conference Board of Canada forecasts a deficit of one million workers in skilled trades over the next 20 years. The result is companies are competing aggressively for the limited skilled worker pool.
A survey conducted in 2001 by the NAM’s Center for Workforce Success revealed that a about 20% of the employers feel there is no skilled employee shortage, 60% had a only a moderate shortage and 20% had a serious shortage.
However, when this survey is broken into job categories, the results are more alarming for maintenance departments. The category of “technicians/electricians” and “craft workers” are reported at a shortage rate of 34% and 43% respectively.
How to survive
A proactive approach to a skills deficiency is imperative for a company hoping to remain competitive. Let’s face it, many industrial companies will be competing for the same group of skilled workers in the future. Here are five steps to help you survive a pending skill shortage in your company:
1. Determine your core competencies. Just because people in your current workforce are good at doing something doesn’t mean that you have to perform that work after they retire. For example, assume you rebuild your own pumps because you have the skill in house. Consider contracting this service out to an outside shop in the future.
2. Become a learning organization , constantly training and building a knowledge base in your current workforce. You should devote at least 10% of a normal work week on focused training.
3. Talk about the work that goes on from day-to-day. Make it a point to openly discuss operations problems and the methods that are employed to solve them. Think of every problem as a learning process for all.
4. Develop a plan to retain the skills embodied in your current workforce and build on the skills of your most experienced employees. The more formal this process is, the better. Don’t just send an inexperienced employee to work with an experienced one. If possible, have experienced employees write down their troubleshooting or repair processes, and ask them to train others in a formal environment.
5. Consider hiring and training eager persons with aptitude when attempts to hire skilled employees have failed. Eager and willing employees don’t necessarily have to have all the skills of an existing employee. Be prepared to focus their skill development and train them to your company’s requirements.
Money isn’t the only motivator when is comes to retaining employees. Employees appreciate working in an environment where training and skills development is consistently emphasized. These employees will be less likely to jump ship and will be more loyal in the long run.
The need for skilled employees in manufacturing jobs will always exist. Traditional outlets such as trade schools and technical colleges are less likely to be sources for the future skilled workforce. Company management needs to take charge of the transfer of skills, whether by formal training or less formal skills transfer methods.
Companies who fail to heed the warning risk becoming less competitive.
Michael V. Brown is president of New Standard Institute, a training and consulting firm specializing in Maintenance Department issues. Alexandra L. Galli-Debicella was new products director at New Standard Institute until August 2004. For other articles go to www.newstandardinstitute.com .
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.