Skills gap: Retirements squeeze manufacturing labor, tech students get help
Retirements are fueling skilled labor shortage in manufacturing, survey says. U.S. Congress hears about the need to retain high-technology students and professionals, the U.S. Army invests $3.5 million in disadvantaged engineering students.
A recent survey finds that baby boomer retirements are fueling skilled labor shortage in manufacturing. In similar news, as the U.S. Congress hears about the need to retain high-technology students and professionals, the U.S. Army invests $3.5 million in disadvantaged engineering students. Also read:
Baby boomer retirement and a lost generation of factory workers have combined to create skilled labor shortages for U.S. manufacturers, according to recent survey results. The need to replace lost workers has grown to crisis proportions over three years, according to manufacturing executives. The shortfall will cost their companies an average $52 million each, and $100 million for the nation's largest companies, which report more than $1 billion in annual revenue. Commissioned by Advanced Technology Services Inc. (ATS) , the survey was conducted by Nielsen Research to poll 100 senior manufacturing executives from companies with revenue between $10 million and $1 billion. Forecasts indicate that within the next five years an estimated 40% of the skilled labor force will retire.
Wider concerns : Today 81% of respondents said they would be affected by the shortage, versus 68% three years ago, demonstrating that the matter has become a broader concern for manufacturing. They calculate the lack of an adequate replacement pool will cost them an average $52.2 million each, compared with an average $50 million in 2005. The cost is higher for companies with more than $1 billion in annual revenue, in which 44% say the shortage will cost them more than $100 million over five years.
"As manufacturing becomes more sophisticated, technical, and precise, and as an entire generation of experts retires, we are recruiting the cream of the crop to do more than fill the gap, but to give manufacturers an edge," said Jeffrey Owens, ATS president. "Those skills are particularly critical in maintaining plant assets and for keeping the factories running better, particularly during an economic downturn."
ATS, a Peoria-IL-based privately held factory services company has created a growth-niche since spinning off from Caterpillar 20 years ago. It provides skilled workers to perform sophisticated maintenance on production machines. ATS says it has trained teams of skilled professionals for diverse needs, such as rebuilding a factory destroyed by a tornado or providing daily strategic services to predict mechanical problems. The ATS white paper, Workforce Trends: Tools for taking control of today's skilled labor shortage , guides companies on what they can do to stem the tide and illustrates benefits in taking proactive steps to recruit, train, and promote a multiskilled labor force. It enumerates the steps ATS takes to satisfy two needs facing U.S. industry: providing the talent to work in factories; and making factories more productive in-house, so that manufacturers won't look elsewhere for less expensive production alternatives.
Immigration reform could help the shortage, some say : U.S. Congress should make it easier for foreign engineers and graduate students to stay in the U.S., according to Silicon Valley engineer and entrepreneur Lee Colby who testified at a congressional subcommittee hearing on June 12. Colby supports three permanent immigration reform bills introduced by subcommittee chair Rep. Zoe Lofgren (D-CA) before the House Judiciary Committee's Subcommittee on Immigration, Citizenship, Refugees, Border Security and International Law.
Proposals (HR-5882, 5921 and 6039), which have bi-partisan support Colby says, would:
1) Increase the annual number of visas granted to professionals in science, technology, engineering, and mathematics (STEM) by exempting foreign students who earn graduate STEM degrees in the U.S. from the cap on employment-based (EB) permanent visas;
2) Eliminate restrictive per-country limits on EB admissions; and
3) Authorize re-issuance of EB visas that were unused due to processing delays.
The bills would give U.S. companies greater access to talented workers from around the world, Colby says. "Graduates from American schools are among the most sought-after employees in the world," Colby said in written testimony on behalf of IEEE-USA . "This is especially true of students who receive master's and Ph.D. degrees in STEM fields. America has already invested in these students' education. The students speak English, have lived here for several years and, to qualify for an employment-based visa, have a job. It is in America's interest and Americans' interest that we allow them to put their talents and education to work here.
" Remember, it is not a question of whether the talented graduates of our schools will get jobs , only of where these jobs will be located. If we force them to leave, the jobs they create will not be in this country, but rather in whatever nation had the foresight to accept them. We need to educate more of our own students in these fields, but the United States does not have a monopoly on talent. There are hard working, innovative and smart people all over this planet, many of whom would apply their skills here, if given a chance. Congress needs to give them that chance.
"Balanced reforms in the nation's legal permanent and temporary admissions programs are particularly important if U.S. employers and U.S. workers are to compete and succeed in an increasingly knowledge-based, technology-driven global economy."
Colby, of Sunnyvale, CA, chair of IEEE's Santa Clara Valley Section in 2005, worked for 36 years as an electrical engineer for Hewlett-Packard. Lee Colby and Associates, which he started in 1997, consults on circuit designs for leading technology companies. IEEE provides more of Colby's remarks in a .
Government is trying to grow more engineers: U.S. Army Research Office (USARO) again will support a series of pre-college engineering summer camps to be held at nine universities across the country to foster interest in engineering among high school students.
Unite, funded by USARO and coordinated by JETS (Junior Engineering Technical Society) , serves historically underrepresented and disadvantaged populations by helping students prepare for engineering and related careers, permitting them to‘try-on’ engineering as a course of study and as a career. Each Unite site’s program is unique to the local area; all offer four-to-eight week summer camps structured around rigorous academic courses and hands-on activities.
Unite helps prepare students for college application and teaches teamwork by emphasizing group projects. Students in grades 9-12 learn by doing, experience off-site field work, talk with experts, work in hands-on labs, and engage in one-on-one instruction. Programs are similar to a collegiate first-year experience; some incorporate an on-campus residential component.
Sites include : Florida International University, Morgan State University, New Jersey Institute of Technology, New Mexico MESA, Savannah State University, Texas Southern University, University of Delaware, University of Detroit-Mercy, and University of New Orleans.
After completing last summer’s program at the New Mexico MESA site, a student noted, “I enjoyed the class because it was more hands-on and I felt like I learned more now than in the school year.” JETS executive director Leann Yoder agreed. “Students today need real-life examples of how engineers make a difference in our world. Unite helps fill a classroom void by showing students the practical applications of math and science while maintaining their academic interests when school isn’t in session.”
During 20 years in the program, USARO, based in Alexandria, VA, says it has invested over $3.5 million toward the initiative, exposing more than 7,000 students to engineering. Students are 55% female, 53% African American, and approximately 54% of those currently in college choose to pursue engineering.
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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.