The skills gap is a misnomer
The reported skills shortage can be greatly alleviated with the new productivity best practices and by new definitions of the old work augmented with better shop practices—which produce more productive teams with new tools to apply to old tasks.
Upon wrapping up the details on awarding the Dr. Sherrie Ford Manufacturing as a Desirable Career scholarships for the 2016 spring term, I coincidently came across a dramatic article on the skills crisis for manufacturers. The article stated that 3.4 million jobs would be created in manufacturing by 2025, but only 1.4 million skilled workers would be available to fill them. That meant that 2.0 million jobs would be left unfilled. Those are staggering numbers with serious consequences for America's economy.
Those numbers didn't make sense in light of the terrific talents for which I had just struggled to discriminate the minute characteristics of the good student candidates from the great scholarship candidates. So I decided to dig a little deeper into those numbers to try to make sense of them. I found that the numbers were actually correct only if you accepted the premise that no other changes would take place in the manufacturing community of companies.
But blinding changes are taking place at an accelerating pace, especially in manufacturing. Those workforce–gap numbers assume a one-for-one need to replace existing workers. Then they extrapolate manpower output ratios accordingly. That might certainly be true for some manufacturers, but definitely not for all.
Technology advances like Additive 3D tools, IoT (Internet of Things), digital manufacturing methods, and virtual reality approaches, are making inroads and having impacts, although not for every company. New, more effective best practices like Lean and Six Sigma, cellular manufacturing, pull systems, and advanced analytics (Big Data) are driving increased productivity as well. People-centric attitudes, team engagement, and a whole host of "respect for people" practices are also demonstrating the productivity opportunity for genuine continuous improvement in manufacturing. If we take these factors into consideration, maybe the skills shortage isn't so huge after all?
However, we know that every manufacturing enterprise isn't or won't adopt these opportunities to improve. If a large fraction of companies doesn't, then we are still left with a pretty big number of unskilled workers in our growing workforce requirement. Knowing that there are 356,000 manufacturers in the United States—with 20% (5,600) of companies employing more than 500 people each and the smaller 80% having less than 20 employees—I thought i would ask a "typical manufacturer" what they thought about the skills gap.
I contacted a midsize manufacturer I've known for a long time that I consider a leader, an industrial device maker, with a workforce of 80-120 employees that operate a machine shop and assembly operations. I asked, "Are you having a problem with a skills gap"? The loud clear answer was "POSITIVELY! We can't find machinists, CNC operators, skilled assemblers or quality specialists; and we are refusing new orders because of it."
"Where are you looking?" I asked. The answer: "Everywhere and anywhere:, job boards, temp agencies, newspaper ads. I either get either no responses or they send unqualified people". "I tell them, just find me someone who can pass a drug test, will show up every day, and do what we tell them to do and they're hired."
When I tell managers and owners about the terrific Association for Manufacturing Excellence (AME) scholarship candidates that I just reviewed, they show interest, but wonder exactly how the students would fix or fit with today's problems. "If they can't produce or run our existing machines on arrival, we don't need them right now. Maybe in the future," They say "We've had these types before, they have great ideas, want to work in teams, want to work on projects, want us to buy new equipment—all good stuff, but none of it gets the 'iron' out the door to our customers this week."
So I asked, "What about the new technologies and advanced methodologies?" Their answer was "I've seen it at trade shows, but it's too expensive for us, and who would run it anyway? And we don't have time to chase new ideas when we can't even keep up with the load we've got!"
There are lots of flaws in those arguments, but it's a clear insight into the intense pressures being experienced in small and midsize manufacturers with limited resources. A Monday–morning quarterback might ask, "Why did you wait so long to staff up?" or, "Didn't you see the upswing coming?" Why isn't this company (and many others like it) an attractive career target for aspiring, up–and–coming students? Let's look to the recent scholarship candidates and winners to see what they think.
AME is encouraging promising students to pursue a career in manufacturing and awards annual scholarships in the name of the late Dr. Sherrie Ford. See the AME link to explore and apply. I lead the team that reviews the applications, judges the winners and awards the scholarships.
The background profiles of both the scholarship winners and applicants challenges the notion that manufacturers cannot find skilled and qualified workers to fill the huge gap being created by baby boomer retirements. These new potential entrants into manufacturing, by their choice, are real winners that any company would relish as a recruit, an employee, an associate, or team member. Our AME judges really struggle to determine the winners from the rich pool of deserving candidates who apply.
A reflection back on what characteristics or special talents separated the winners from the rest in the 2015 fall term gives little insight into a success formula that makes for a winner, however, there are certain aspects that caused some candidates to stand out as decisive factors shaping their career aspirations and winning characteristics.
One factor is that many of the winners had a manufacturing person, parent, or teacher that influenced them to learn more about making things and to try something a little different than a blind pursuit of a generic college degree. Many of these candidates had interned, participated in a work co-op program, or had a part-time job with exposure in a manufacturing facility, which led them to redirect their studies in pursuit of a manufacturing career. Another major factor was their school's ability to give them a "hands-on" education through robotics competitions and other tangible class projects involving building something. Whether these factors made them good students or being good students led them to pursue these factors is not certain. But every one of these students achieved high grades in a balanced school curriculum.
The take-away for companies looking to recruit new employees and build a better future with a young workforce, to replace the wave of older workers reaching retirement, is that there are plenty of qualified students anxious to start a manufacturing career. Companies, however, need to seek them out by engaging with local schools. But be aware that the full time positions these bright and talented students, sometimes called "millennials," are seeking to fill are NOT those vacated by retirees who spent 20 years on the same machines as operators. The best and brightest student applicants want to work in teams where they can earn quickly, they want to perform a variety of different tasks during the year to acquire multiple skills, they want to opportunity to learn many new things as they progress and they want to be recognized for it. And all these new entrants to the workforce want to be engaged in improving the business in meaningful ways.
So this is the disconnect I see between the mindsets of manufacturers with workforce needs and the entry–level scholarship candidates that could bring them the productivity gains to alleviate the skills shortage. Offering them "same-old, same-old" jobs is a turn off. It reinforces the stereotype of "dull, dirty and dead-end" factory jobs that no ambitious student would want.
Dear employer/owner: The best and brightest are two generations removed from you, so you need to learn what they are thinking. You need to bring them on as interns or in part-time job–shadowing programs and get to know them, and let them know you. They are much smarter than you think and bring ambitious ideas with more promise than you are currently getting from your retiring workers.
In their studies they learned about Lean and Six Sigma and they know how to apply the principles and tools, just not where to apply them. These students "mindless machine tending to produce batches of parts" as contrary to the Lean and JIT processes they learned; they see, instead, a machine cell producing to takt time and not to quantity standards. They know how to apply Six Sigma to calibrate a computerized new machine for flawless startup, and they envision rearranging other nearby machines in a cell to take advantage of the CNC labor savings by redistributing the work. They expect to see a value stream map so that they can synchronize output to customer demands. They've worked in teams in school and expect to work in teams in the factory.
If conventional employers are unwilling to embrace these disruptive new advances in work methodology to attract new entrants to the manufacturing workforce, then new entrants will seek a young, new, and agile startup manufacturer that may become the disrupter to the "same-old, same-old" conventional manufacturer that is out of date and on a downhill path.
The experience some companies have had is that an infusion of today's youth brings a 30% or more increase in productivity. It is a proven fact that engagement, teaming, technology, Lean and other "best practices" make a manufacturer more productive. Employers need to get to know this new generation of students in order to integrate them and accelerate growth, NOT to have new entrants do more of the "same old, same old."
Employers and educators need to change their business models. Not all students come "shop ready." Employers may need to develop on-boarding programs to align this generation to the workplace. They also need to engage with schools through adopt-a-school programs to assist schools in better defining and preparing the workforce for today's manufacturer. And high schools with 50%-70% graduation rates should recognize that career ready and college ready are two different things. They should offer certifications that carry portable college credit along with diplomas. Many high schools already do. However, we know that very few future jobs can be adequately filled with only a high school diploma. The technical and community colleges need to fill that void. Many of these have "course of study completion rates" in the 50% and lower range. They should recognize that their curriculums take too long for today's impatient students and include too many non-essential courses for a solid, good–paying manufacturing career. They need to look at the number of career technical certifications granted, and count them as successful skills delivered to students. Associate degrees should be optional for the more ambitious students seeking more challenging and comprehensive credentials.
So, perhaps the reported skills shortage can be greatly alleviated with new productivity best practices and new definitions of the old work augmented with better shop practices, which may produce more productive teams and new tools to apply to old tasks. If we do this maybe the skills gap can be filled after all.
—Ken McGuire is president of Management Excellence Action Coalition for the Association for Manufacturing Excellence (AME). This article originally appeared on www.ame.org. AME is a CFE Media content partner. Edited by Erin Dunne, production coordinator, CFE Media, firstname.lastname@example.org.
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Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey