Manufacturers that invest in the right training and employee development will gain competitive advantage.
By Jason Tuma, Senior Manager, Assurance Services, BCG&Co.
Economic news tends to focus on layoffs and job cuts these days, especially when it comes to plant closings and production slowdowns. While job loss certainly is a harsh reality for millions of former production workers, U.S. manufacturers themselves are dealing with a much different reality: They can’t find enough qualified employees to fill thousands of high-paying, high-skill jobs.
“This is certainly an employer’s market, but not as much with manufacturers,” Mark C. Tomlinson, executive director and general manager of the Society of Manufacturing Engineers (SME), said in November 2009 when addressing the shortage. “Manufacturers are looking for employees who are the opposite of the stereotypical factory worker doing repetitive, assembly line work. They are in need of 21st-century workers with specialized technical training such as machinists, operators, and technicians.”
The manufacturing skilled-worker shortage predates the 2008–09 Great Recession by at least a decade and is the result of combined demographic, technological, and societal changes. Groups such as SME, the National Assoc. of Manufacturers (NAM), and the nationwide Manufacturing Extension Partnership (MEP) network have been addressing the shortage with research, training partnerships, and outreach programs for years.
But these alone won’t solve the skilled-worker shortage, particularly with the sting of last year’s economic collapse still lingering. While many manufacturers have not laid off workers or closed plants, high-profile companies in industries such as autos did so in droves, and this has furthered the notion that manufacturing is no place for stable, rewarding employment.
Manufacturing companies will need to address this shortage head-on by taking a dedicated, innovate approach to training and labor management, and by working to reverse the negative image that continues to plague goods-producing industries.
Investing for the Future
One of the most insidious causes of the skilled-worker shortage is the corporate propensity to target labor and labor-associated costs (i.e., training) as an immediate reaction to a drop in revenues or profitability. While there are many good reasons to eliminate positions that no longer add customer value, manufacturers need to recognize that they are no longer simply providers of one-size-fits-most products. The most successful manufacturing companies are solving customer problems, and this type of value is directly tied to daily employee performance. What employees do – to say it another way – has become more important than what they make, and so production workers should no longer be seen as expendable, easily replaced resources. Companies that have recognized this and have invested in their workforces are solving their skilled-worker shortages.
For example, Ron Bullock, chairman of Bison Gear and Engineering Corp., said recently during a TV news segment about the company that Bison “has invested in building two balance sheets: a financial balance sheet and what we call a ‘human capital’ balance sheet.”
Bison, of St. Charles, Ill., recognized that in order to stay competitive in a global marketplace, it needed a briskly flowing pipeline of highly skilled employees. So the company implemented the nationally recognized Manufacturing Skill Standards Certification (MSSC) program. MSSC awards Certified Production Technician certificates for completion of training modules in safety, quality, practices and measurements, and manufacturing process and production. Bison awards employees financially when they complete a module.
SME, NAM, and community colleges also have developed various manufacturing certification programs, some of which focus on skills tied to growing markets and management practices, such as the merging of “lean manufacturing” techniques with environmental sustainability.
In addition to certification, manufacturers can create performance incentives to encourage employees to cross-train for other in-house production jobs. Having employees with multiple skills increases a manufacturer’s flexibility, which in turn increases its ability to serve customers and efficiently deploy resources. The U.S. steel industry came back from near-devastation early in this decade in part by working with its unions to rewrite contracts to encourage cross-training instead of rewarding employees based mostly on years of service. Union members at some companies now receive incentives tied to company performance, which tends to improve as the workforce becomes more flexible and efficient. Read more…
