The workforce economics of supply and demand
Finding a way to consistently balance supply and demand to help maximize profits and optimize production.
I slept through a good deal of Economics 101 in college. In my defense, it was a large, warm lecture hall, and it was early in the morning. I was a college student and, after all, it was Economics 101. I did manage to make it through enough of the course to earn a "C" and a passing knowledge of supply and demand.
You don’t need to be an economist, or even awake, to grasp the basics of supply and demand. Prices fall when supply is high and demand is low, and prices rise when demand is high and supply is low. The goal is to find a way to consistently balance supply and demand, which helps you maximize profits and optimize production.
The supply and demand concept works well with commodities, but people aren’t commodities, no matter what political candidates might think. When you need more people to work in your plant to help you grow your business, the rules of supply and demand go out the window. You have to focus on more than just money to bring workers into your organization.
The continuing workforce shortage in manufacturing is reaching a critical point. With a manufacturing economy in full recovery, companies are looking to expand. After their retirement plans were left in tatters 7 yr ago, older plant workers now see a more stable present and can look toward retirement with more optimism and with less dependence on their current jobs.
The combination of economic growth and worker retirement will stretch our thin resources further, and automation and robotics will only be able to do so much to stem this tide. We need more people on our team.
Plant Engineering has touted for years the importance of outreach by plant management to attract, train, and retain this next generation of workers. We need to assess the specific needs of our plants-what kind of worker do we need to fill the roles? We then must marshal resources to bring our manufacturing opportunities to the potential workforce, and to show people how these manufacturing opportunities create not just a job for today, but a future for tomorrow.
In our articles this month that focus on training and workforce development in manufacturing, there were two compelling quotes that sum up the issues that manufacturers and potential workers must consider. One was from Stacey Bales, the president of Bales Metal Surfacing Solutions, who said, "We’re trying hard to reach out to the high school level, but we’re still a couple of years away. For us, it’s harder; no one grows up and says they want to be a chrome plater. We train in-house, but it’s kind of a dying art form. We try to attract younger workers by having a robust benefits package."
And then there was Leo Dionne, manager of strategic sourcing/transitions at Pratt & Whitney: "These programs are offering not just a job opportunity, but a career opportunity. Given the advanced state of manufacturing technology, we need highly skilled, business-oriented people. We’re starting at the beginning, investing in adaptable, hard-working individuals who want to have careers with us."
Some frustrated manufacturers might hear all these platitudes and ask, "Where do I find these people?" The obvious response is, "Well, where are you looking?" If you’re just staring at your front door waiting for the workforce to break it down, you’re going to be waiting a long while. If you’re setting up shop at job fairs, that’s a better effort, but not close to enough. You need to sell your job opportunities with the same enthusiasm-and with the same incentives-as you do with your sales force.
Your current employees should be your best ambassadors for your company. Do you offer a bounty for every new recruit they bring through the door? Do you have an active program to train workers at the local community college? If you invest in the school by providing them your equipment for training, will that investment pay off in workers ready to step in and produce on day one?
The numbers surrounding workforce development are obvious to all, but they’ve stayed roughly the same over the past decade. We’ve continued to grow manufacturing in that time, but we’ve been living on mostly borrowed time. We understand the problem, but at some point that understanding has to translate into action.
We lack the needed supply of workers. We have to create a demand to work in our plants. To do that, we need a supply of funds and initiatives from our plant leadership. And we have to demand it.