By Kathie Mahoney, Strategic Partner Development Manager, MassMEP
No industry is sacred in a down economy and manufacturing is no different. But manufacturing is different in other ways, such as the average employee is 55 years old and seeking to retire over the next 10 – 20 years. Who is going to replace these skilled workers and allow the U.S. to remain competitive?
In a remarkable counter to conventional wisdom, more leading manufacturing executives today believe the lack of skilled labor and management skills in the workforce – not current oil prices or the weak US dollar – most hurt the growth of America’s economy.
According to a survey by the sponsors of the FABTECH International and AWS Welding Show, 27% of the 166 executives polled cite the lack of skilled labor and management skills in the workforce as most to blame for the US economy’s struggles. This is followed by oil prices (20%), tax policies (11%), a weak US dollar (10%), the financial toll of the war in Iraq (9%), and the credit crisis (7%).
Forbes recently took a look at the "10 Hardest Jobs to Fill in America" and for the second year in a row the honor went to the position of engineer. The article reports that 44% of US employers surveyed reported having a hard time filling jobs. "Companies are looking to replace more than half of their engineers over the next eight years because baby boomers are retiring," said Larry Jacobson, Executive Director of the National Society of Professional Engineers. "When you have 80,000 engineers working for you, as Lockheed Martin does, that’s a lot of jobs."
Need for Skilled Workers
At a recent manufacturing meeting in Boston, attendees discussed the fact that even if we filled all the vacant student slots in the technical high schools’ manufacturing programs, and half of those graduates went directly into manufacturing jobs – there would still not be enough graduates to fill the existing need. These are jobs with career paths, benefits, and potential for tuition reimbursement if the employee decides to go on to further their education.
The growing complexity of economic activity seen in, for example, global supply chains, just-in-time production, and increasingly precise customer segmentation and channel strategies has led to higher demand for advanced skills. Thus, there is a greater demand for skilled workers and those workers will experience a higher income based on their skill base.
A report published in June 2009 by the McKinsey Global Institute states, "Incomes and employment for the top-earning 22 percent of workers grew fast, mostly because new technologies and new opportunities in global markets ramped up demand for advanced skills."
The average salary for a manufacturing employee in Massachusetts is $65,000, as opposed to $54,938 in real estate, $53,973 in government, and $45,647 in health care.
Those who do become engineers find they’re in a lucrative field that doesn’t require as much schooling as other specialized professional fields, such as being a doctor or a lawyer.
So why are there not more students enrolled in math and science courses in high school (other than the minimum graduation requirements) and/or pursuing a degree in a STEM field? MassMEP does not have the answers but we are working to change the stereotypical perception of manufacturing in Massachusetts as being unsafe, dirty, and a repetitive job with no future.
Just like there is a global economy, there is also a global lack of skilled workers. We can no longer rely on the immigrant population that built this country to fill a void in our workforce. We need to be actively training our own children for these careers and future job opportunities and encouraging them to pursue careers in STEM related fields.
Many companies are providing in-house training and hiring people at entry level positions in order to develop the skills that are lacking in the workforce.
The "Manufacturing 2008 Executive Summary," published by The MPI Group, states, "Manufacturers’ emphasis on training appears to be increasing, with approximately 23 percent of plants training their employees more than 40 hours a year."
One-fourth of North American plants (25%) indicate that a majority of employees participate in empowered or self-directed work teams. The companies that are conducting in-house training and empowering their employees to improve are also experiencing less turnover in employees. Companies that train less than 40 hours experienced 9% decrease in turnover; 8% at plants training 8 to 20 hours; and 5% at plants training more than 20 hours. The companies that train their employees and allow them to grow reap the benefits with employee retention.
NIST MEP Survey
NIST MEP recently conducted a survey of manufacturing companies across the United States and then produced a regional report for each area.
"Nearly one-third of New England manufacturers (32%) are at or near world-class status in human-capital acquisition, development and retention; 8% have made no progress toward world-class status." Reported in the NIST MEP Next Generation Manufacturer Study. Where do you stand?
Ration the importance of human-capital acquisition, development and retention to your organization’s success over the next five years:
National
New England
1 = Not Important
2.5%
2.6%
2
6.1%
5.1%
3
14.6%
12.8%
4
30.8%
33.9%
5 = highly important
45.9%
45.6%
Training is essential to remain competitive in a global economy and retain your workforce. Just as we need skilled workers to hire at various levels within the organization, we also need to continue to train them as part of the company’s continuous improvement plan in order to remain competitive, best utilize the technology available, and retain our workforce.
MassMEP holds quarterly CEO meetings with manufacturing companies in Massachusetts and addresses their concerns and issues related to their future. To learn more about these quarterly meetings, please contact Kathie Mahoney at 508-831-7020 or [email protected].
Make a Difference – Get Involved Other options for building an awareness of STEM careers is sponsoring a robotics team or volunteering on your local school’s team. These programs start in the middle school, which is the ideal age to build and keep an interest in STEM education and careers. Unless we get involved, there is a generation that is not going to know about the great opportunities in manufacturing.
