VMA, Manufacturers Work to Bridge the Skills Gap

The Problem

In a 2014 Deloitte Skills Gap study, 84% of executives surveyed at more than 400 manufacturing companies agreed there is a talent shortage in the U.S. manufacturing. They indicate that six out of 10 open skilled production positions are unfilled due to this shortage—even when 80% of manufacturing companies are willing to pay more than the market rates in workforce areas reeling under the talent crisis.

Ben Dollar, a principal at Deloitte, specifically addressed this issue at VMA’s 2016 Market Outlook. Dollar cited survey results that indicate it takes 90 days or more to recruit engineers, researchers and scientists, 70 days to hire skilled production workers and 48 days to hire clerical and office help. “A good benchmark for hiring lag time is 45 days,” said Dollar. “Think of double that time for a researcher/scientist or engineer. That is a lot of lost productivity.”

Between 2004 and 2012, the U.S. manufacturing industry lost $9 billion to $25 billion per year of output because of open positions that went unfilled. A vast majority of the surveyed executives believe the skills gap will negatively influence operations, company growth and the bottom line by impairing the ability to meet customer demand and provide effective customer service, to implement new technologies, innovate and develop new products, expand internationally and increase productivity.

Executives fear that over the next decade, of the nearly 3.5 million manufacturing jobs that will need to be filled, the skills gap is expected to result in 2 million of these jobs going unfilled. This is due, in part, to the 2.7 million baby boomers who will be retiring and the 700,000 jobs expected from economic expansion. Beyond that, though, is the very real problem that manufacturing is not considered a glamorous or “attractive” industry.

“Manufacturers spend a lot on people, on basic labor costs,” said Dollar. “But the amount of time and money spent systematically managing talent is very small compared to supply chain and other costs.” He referenced a study in which 70% of executives indicated current employees do not have sufficient computer and technology skills, 67% do not have enough basic technical training, 69% lack problem solving skills and 60% are missing basic math skills.

Dollar pointed out two fundamental categories that are especially important for manufacturers:

1) STEM: Science, Technology, Engineering and Math. There is a shortage of engineers, researchers, scientists-- people who get degrees and apply those skills in the workforce.

2) SKILLED production workers: C and C machinists, welders, sheet metal workers, etc. While they don’t need a four-year degree, these people do still need good training.

Part of the problem, according to Dollar, rests with the education system: the U.S. is ranked 23rd in the world in reading, 36th in math and 24th in science. “There is a need for collaboration between business, education and government,” he stressed. “Everyone has to work together to fix this. There are many talented, hard-working people in the industry; the problem is that manufacturers have not always been able to figure out how to maximize the talent inside the walls of the factory.

“A holistic approach is needed in order close the gap and remain competitive. Start by developing and retraining the current workforce with internal employee training,” he advised. “Get involved with local schools and community colleges to help with training before and after hiring. Send employees to external training and certification programs. Create new veteran hiring programs. There are many steps that can be taken.”

Breaking the Stereotypes

While Americans are generally supportive of the importance of manufacturing, believing it is important to economic prosperity, they don’t want to work in it. Dollar referenced the fact that only about 30% of American parents say they would encourage their children to pursue a career in manufacturing. “Why?” he asked. “Because they’re worried about job security and stability and limited career prospects. And even though there is tremendous opportunity in this sector, people believe that manufacturing jobs are the first to be moved to other countries so they don’t want their kids to do it.”

According to Dollar, another part of the problem with recruitment to manufacturing is the perception that it is dirty, dumb and dangerous, but anyone who has actually spent time in a factory knows it is not that way. Familiarity with manufacturing increases a positive perception. Those familiar with it are twice as likely to encourage a child to pursue manufacturing, and once people actually see what it is, they are more likely to accept it. “There are many opportunities for ‘wow’ moments in manufacturing,” said Dollar. “High tech is there, so once possible recruits see that, it can easily change their perception.”

Once potential recruits have a sense of the many possibilities in manufacturing, another problem exists because many companies are outdated in the way they manage talent and lead. “There is a tendency to have command and control management styles,” said Dollar, “But millennials respond more to integrative types that put networks together. The new leadership paradigm must be able to bring different capabilities together rather than running plans and making sure people are doing the work.”

One Solution Offered by VMA

Over the next year, the Valve Careers program will expand to include:

• Visits to technical schools and universities to continue educating students about career paths.
• Partnerships with economic and community organizations to promote careers within the industry.
• A strong presence on social media sites such as LinkedIn and Twitter, which are known to be integral in garnering the attention of college-aged job-seekers.

The two-fold Valve Careers program also aims to direct these young people to VMA’s member companies—specifically to their careers pages—via a comprehensive contacts list on its website, ValveCareers.com. Additionally, the website features a resumé submission form, and all submitted entries are shared with VMA’s member HR reps.

In another effort to provide tools and resources to VMA member companies, the first-ever VMA HR Workshop: Promoting Valve Careers to the Next Generation, will take place Nov. 9-10 in Washington, DC, and will allow HR personnel to network, share best practices and learn about new ways to recruit young people to work in the valve industry—and for their companies.

VMA recognizes the need for bridging the talent gap, and it hopes that through the Valve Careers program, its member companies will be connected with a whole new talent pool who are eager to jump into the industry and begin their careers in industrial valve manufacturing.

Summary

Manufacturing companies know the human resources issue is a growing problem, but fixing it is much more than just posting jobs on Monster.com. Understanding the new work paradigm and making growth, flexibility and training as big a part of the culture as high wages is important to attracting the right talent. And even when the right talent is found, they are not necessarily trained for the positions you are trying to fill. It is essential to work with the community, trade organizations, government and education to attract and train potential skilled workers.

Kate Kunkel is senior editor of VALVE Magazine. Reach her at kkunkel@vma.org.

Jessica Bello is careers program coordinator at Valve Manufacturers Association, and is happy to answer any questions about VMA’s Valve Careers Initiative. Reach her at jbello@vma.org.