The manufacturing sector in Massachusetts accounts for 14 percent of the gross state product, and the largest personnel payroll sector in the state. Traditional retention strategies (flex/part time hours, phased retirement, restructured salary/benefits packages) do not address the needs of today’s small to medium sized manufacturer with less than 100 employees. Ninety-two percent of the manufacturers in MA have less than 100 employees. Planned attrition has traditionally been the preferred strategy to keep overhead costs in line and a steady stream of new hires provided enough manpower to maintain production. Several internal and external factors have made this position precarious for today’s manufacturer.
There is a lack of replacement workers, both from a quantity (MA 30-45 year old population has dropped 18%) and a quality (lack of basic skills) standpoint. There is no longer a functional pipeline. Even with an adequate population, manufacturing is perceived as a dying, dirty industry with no long term employment prospects and the industry has not been effective in changing that misperception. Only half of the vocational/technical high schools in the Commonwealth have manufacturing technology programs and many manufcturing programs are struggling to maintain enrollment.
While there are more and more opportunities for women in manufacturing the industry is still predominantly male oriented. In the past 15 years, Massachusetts has experienced a staggering decline in the number of males in the active workforce. The withdrawal of men from the labor force is related to the state’s changing economy.
As the state’s economy has shifted from a goods-producing to a service-providing economy, these structural changes have had profound impacts on the types and jobs and opportunities available to workers. The demand for workers has grown more rapidly in occupations dominated by college graduates. Consequently, workers with limited education have faced fewer job opportunities, especially in manufacturing, and substantial numbers have left the work force.
The changes in the structure of the job market have been affecting men more than women—even among those with comparable levels of education—partly because men were more entrenched in the blue-collar jobs that have disappeared and also because more of the job opportunities for those with limited education are in occupations dominated by women, such as retail trade and health care services.” 1
Armed with the knowledge that there is a lack of replacement personnel, manufacturers have done a poor job of implementing a recruiting/retention/retraining strategy for their older workers. In 2006 Manpower Inc. surveyed more than 28,000 employers across 25 countries to determine if these companies have adopted strategies to recruit and/or retain older workers. The results for the United States indicated that only 1 in 8 manufacturing firms has taken steps to recruit older workers. Only 1 in 4 has taken steps to retain older workers or implemented strategies to offset the impact.
Manufacturers recognize that something needs to be done, yet small and medium sized enterprises (SMEs) lack the tools to determine where they should focus their limited resources first. There is no mechanism to determine and impartially evaluate which skill, which job, which competency is the most critical to the future prosperity of their company.
Manufacturing companies have not implemented any type of program to offset the most insidious threat to their economic futures because they don’t know where to begin. They need tools to assess and prioritize where their efforts should be focused and tools to catalogue and transfer the technical knowledge that their long term employees possess.
Employers need to position their business for recovery, then growth. Measuring processes, including the workforce; translating and analyzing that data; then making strategic decisions based upon the findings is the only way that manufacturers can become world class. But the majority of companies are not collecting information.
Employer Readiness for Aging-Related Business Factors 2 In your opinion, to what extent has your company/organization analyzed its workforce demographics to ensure that it will have the people it needs, today and in the future? Numbers do not add up to 100 due to rounding.
More than two-thirds (69%) of 688 survey companies/organizations reported that they have analyzed their current workforce demographics “not at all” or to a “limited extent”. More than three-fourths (77%) have not analyzed projections about the retirement rates of their employees. The lack of planning extends to current and future skills needs.
A solid, objective skills assessment is the first critical step in determining a company’s current and future workforce needs. With funds provided by Commonwealth Corporation through the Workforce Competitiveness Trust Fund, MassMEP has developed a Critical Skill Assessment that links the aging workforce, and skills development and transfer, to the overall financial health of a company—a connection that many companies have not previously made.
Based on our research, the biggest surprise is—knowledge transfer is not an issue of age. The transfer of the tactic knowledge needed to effectively and safely perform a job had no relation to age. Age only became relevant when determining the “window of opportunity” a company had to implement a proactive vs. reactive training strategy.
The Critical Skills Transfer Assessment gives companies a simple tool that determines current:
retirement projections
skills gaps
training priorities
financial and performance metrics
and can project return on investment for the development and implementation of knowledge transfer programs.
Human Resources must become part of a company’s strategic business plan work in order for a company to be considered a Next Generation Manufacturer. They must address the strategic importance of workforce demographics, assessment and training.
For more information on the Critical Skills Assessment and knowledge transfer, call MassMEP at 508-831-7020.
1Mass Economy: the Labor Supply and Our Economic Future, MassInc. and Center for Labor Market Studies, December 2006
2Talent Management Study, The Sloan Center for Aging & Work at Boston College, Marcie Pitt-Catsouphes, Stephen Sweet, and Kathy Lynch, with Elizabeth Whalley, page 8, figure 3.
Numbers do not add up to 100 due to rounding.