The outlook for US manufacturing is steadily improving, but the average age of our manufacturing workforce is rising. While the workforce ages, the required skills for plant floor personnel are also evolving. We will always need the traditional trades, but the new manufacturing workforce requires advanced manufacturing skills to work in environments where digital design and physical automation are growing ever more complex.
Last year, there was a net gain of 284,000 manufacturing jobs - the most we have seen since 1997. Manufacturers Alliance for Productivity and Innovation (MAPI) estimates that production will continue to grow at a rate over 2% through 2021. The average starting salaries have risen, but manufacturers still find it difficult to source adequate qualified entry-level talent. In a recent white paper, Deloitte singled out the manufacturing talent shortage as the single biggest threat to growth:
"The manufacturing industry faces a talent shortage in the coming decade that could seriously hamper the positive growth and regeneration much of the industry has experienced in the United States since the Great Recession."
US Industrial Products & Construction Leader
Deloitte Consulting LLP
The good news is that there are many federal, state, and local initiatives that can help grow the talent we need to support continuing US manufacturing industry expansion. Some manufacturers have also developed their own strategies independently and you can duplicate their success.
Apprenticeships Can Help Close the Skills Gap
Apprenticeships that combine on the job training with classroom education are a proven strategy for training workers. For those students who are unable to afford four-year college or those who don't wish to saddle themselves with excessive college debt, apprenticeships offer the opportunity to earn while they learn marketable skills that are in high demand. Businesses can help shape apprenticeship programs to their needs by working with community colleges and trade schools to make sure that classroom training is in line with real world manufacturing operations.
There are apprenticeship programs available for these and other high-demand manufacturing fields:
- CNC Set-Up Programmer — Milling and Turning
- Machinist, Precision
- Industrial Maintenance Repairer
- Mold Maker, Die Casting, and Plastic Molding
- Plastics Fabricator
- Tool and Die Maker
DOL data shows that the apprenticeship model is growing across all fields. In 2017, there were over 17,000 active apprentices in manufacturing. To grow that number, we need to provide more information to young students and their families about the advantages of manufacturing apprenticeships. Manufacturers themselves should take an active role by working closely with area high schools, youth groups, community colleges and trade/vocational schools.
A key priority of the current administration is to better align the country's educational system with the needs of our industries. The administration is pouring resources into increasing the availability of apprenticeships. In June 2017, President Trump signed an executive order calling for increasing the number of apprenticeships across all US industries. In response to this executive order, the US Department of Labor (DOL) is funding state and third party programs to increase public awareness about available apprenticeships by getting the information out to businesses, students, and parents.
This DOL publication provides information on all current federal programs that support registered apprenticeships. Registered apprenticeships provide industry-recognized certification of competency to applicants who complete the program. The DOL has also put together a quick start toolkit for those looking to partner with similar businesses to launch grass-roots apprenticeship programs. Many states are providing employers with tax credits for hiring apprentices, as well as tuition support for registered apprentices at community colleges and trade schools.
The Trade Adjustment Assistance Program provides financial resources for retraining workers who have lost jobs to increased foreign imports. The DOL also provides information on resources available for training underserved groups, including women, youth, seniors, and veterans. Information on federal assistance is also available from DOL's Career One-Stop Business Center. Check here first to see if there are existing programs to help with your specific skill gaps.
States vary in their commitments to workforce development through apprenticeships. Several model programs have yielded great results so far and manufacturers in other states can duplicate these successes. Here are some highlights of several state programs:
- South Carolina offers the free services of apprenticeship consultants to employers who want to start their own apprenticeship programs. This is especially helpful to small and mid-sized manufacturers who do not have the time to research and navigate the many state and federal sources of apprenticeship assistance.
- Minnesota relies heavily on a partnership model that is similar to long-standing successful European apprenticeship programs. Apprenticeships work best when stakeholders from government, education, and industry work together to develop, administer, and promote programs.
- Wisconsin and Kentucky succeed by starting early with a pre-apprenticeship program for high school juniors and seniors.
- Connecticut supports both sides of the supply and demand equation by offering wage subsidies as well as tuition support for apprentices, making it more attractive for businesses to start working with the apprenticeship model.
Grass roots and Grow-Your-Own Apprenticeships
If your state does not yet have a strong apprenticeship program, or if you are dissatisfied by the training offered by local community colleges and vocational schools, you can still implement an apprenticeship program on your own or by partnering with similar businesses in your area. The Manufacturing Institute offers a comprehensive guide to setting up your own apprenticeship program.
The best place to start your outreach is at the high school level. Don Mitchell, a founding partner of K.A.M. Tool and Die in rural North Carolina, built his successful program from this starting point. He leveraged a grant from the Golden Leaf Foundation, whose mission is to create jobs in rural and tobacco dependent regions of NC. Don began identifying potential candidates by getting to know the high school trades class teachers in his immediate area. He asked these teachers to identify high school juniors and seniors who had a good work ethic, manual dexterity, technical aptitude, and most importantly, demonstrated eagerness to learn. If the students agreed to join K.A.M.'s high school internship program, they spent two afternoons a week at K.A.M. learning about the business operations on the shop floor.
Getting Them Started
Don starts them out slowly with general cleanup tasks to assess their willingness and ability to follow simple instructions and take responsibility for assigned tasks. Next, he allows them to receive in deliveries of replacement parts, tools, safety equipment, and raw materials. The students enter the receipts into the electronic inventory management software and make sure that the items are stored in the proper location. This gives them hands-on familiarity with the names and look and feel of all the items that are used in day-to-day production.
The students are encouraged to ask questions of any employee and employees are eager to share their knowledge. Before the end of the internship period, students are allowed to setup and make an item under the watchful supervision of an experienced employee. At this point, if the student wants to continue on to earn a community college degree and pursue a career with K.A.M. they enter a K.A.M. apprenticeship and the company pays their tuition as they work their way through school. Every student that K.A.M. has accepted at this point has stayed on as an employee with the company.
Mitchell is rightfully proud of the program, saying, "If they have a good work ethic and a desire to learn, I can get them started on a career that will eventually lead them to a six figure salary with great benefits and give them a great start in life. It's better for us than hiring someone from another shop, because they are trained on our equipment and in our way of doing things."
Retaining Skilled Manufacturing Talent
After making the investment in acquiring high quality manufacturing talent to fuel your company's continuing growth, make sure you retain the best employees, especially when so many high paying manufacturing jobs are going unfilled. Continuing education, ongoing training, and recognition are key to closing skill gaps as employees mature within your company.
Manufacturing has one of the highest turnover and absenteeism rates of any US business. If your turnover rate is high, you need to understand why your employees are leaving. If the same reason is showing up repeatedly in exit interviews, you know where to apply your retention efforts. You only have so much room to incentivize within your payroll and benefits budget, but employees are often looking for more than a good salary and benefits package.
Here are some proven tactics for retaining your young apprentices and more experienced employees.
- Cultivate their feedback. They are used to working in teams, and prefer guided brainstorming to top-down mandates.
- Encourage your managers to keep a close ongoing connection to their shop floor workers.
- Physical demands and wasted effort lead to employee dissatisfaction and departure. Are there opportunities to redesign the plant floor layout so that employees can work more efficiently?
- Make sure every worker has a career path and understands how to progress within the company.
- If your turnover is within the department of a particular manager, some coaching or training in the softer skills of management might be in order.
- Foster a team spirit by sponsoring employee clubs, events, parties, and joint community service opportunities.
- Help employees with work-life balance by assisting with finding childcare or eldercare, being flexible about allowing them to take and make-up an hour or two for personal business, offering a quiet room for short personal phone calls during the day, and providing an attractive lunchroom and outdoor break area.
- As your most experienced employees approach retirement, give them an opportunity to wind down their careers as part-timers.
Mark Beck, shareholder and recent acquirer of K.A.M. sums it up well: “In today’s competitive world, talent is the most precious of all assets. When evaluating acquisitions we like to see a healthy mix of people at every stage of their careers. We need experienced industry veterans, young fresh apprentices, and everyone in between. At the end of the day, we really believe that the best team wins.”
There are many resources available to employers who want to adopt apprenticeships as their best shot at sourcing qualified entry-level employees. It is vital that the voices of small and mid-sized manufacturers are heard as states and regions develop and administer formal programs, so that the programs address the needs of businesses of varied size and type.
Manufacturers know that they can provide young people with great careers, but unless students have family members who work in these jobs, they have no idea what the day-to-day work will be like. Get to know the trades teachers, parents, and youth in your area, and use every informal opportunity to give them insight into the advantages of a career in manufacturing. Send representatives to school career days and hold open houses for scout and explorer groups at your plant. Sponsor and attend youth programs. Reach out to those students who show interest. Any opportunity you can give them to experience and understand real world manufacturing operations will help them make an informed career choice and give you a chance to see if they are a good fit for your company.
After securing the young end of your talent pipeline with apprenticeships, make every effort to retain employees as they grow within your organization. Accelerated Manufacturing Brokers, Inc. president, Fran Brunelle, "Manufacturing companies that take measures to ensure a pipeline of skilled workers are not only more successful than their competitors, they are much more attractive to quality acquisition candidates and therefore easier to sell."
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