U.S. manufacturers face an "extreme talent gap" but a report from ToolingU-SME finds too many companies are procrastinating rather than taking action to bolster their workforce.
In 2011, I attended the imX Expo (interactive manufacturing eXperience) in Las Vegas when Tooling U-SME " announced their Mission Critical: Workforce 2021 initiative and "sounded the alarm that the future success of manufacturing is at risk by the end of the decade if industry does not address the growing skills gap." The event was sponsored by SME (formerly the Society of Manufacturing Engineers) and the American Machine Tool Distributors’ Association (AMTDA).
At that event, Tooling U-SME, "the world's leading provider of training and workforce development solutions for manufacturing companies and educational institutions," introduced a free one-of-a-kind “Workforce 2021 Assessment” tool for companies to use to assess and gauge their company’s performance because they had identified that there would be a critical shortage of skilled workers by 2021 that would threaten the future of manufacturing in America. "By answering a short series of questions about a company’s knowledge retention, readiness of future skill requirements, and the status of employee development programs, a company is able to assess their ability to meet current and future workforce challenges."
In a September 5, 2016 commentary in The Hill contributor Grant Phillips wrote that the National Association of Manufacturers found there are "600,000 unfilled jobs in manufacturing primarily due to a lack of skilled labor. It is this skills mismatch that plagues the US labor market…"
On September 8, 2016, ToolingU-SME, released a report that showed the progress towards achieving the goal of the Mission Critical: Workforce 2021. Based on five years of insights from the Workforce 2021 Assessment tool, the report states, "The results are not encouraging. Responses show there has been little advancement. While it’s not too late, companies must take action now to ensure a healthier next decade." The report quotes from the report, "The Skills Gap in US Manufacturing: 2015 and Beyond" by Deloitte and The Manufacturing Institute, which states, "Over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled. The skills gap is expected to result in 2 million of those jobs remaining unfilled."
ToolingU-SME Vice President Jeannine Kunz wrote in the cover letter, "Only a very small number of worldclass organizations are prepared for the extreme talent gap predicted by the year 2021. Some of these companies started planning years ago to address the coming labor shortage. Others were forced to take reactionary steps when faced with a shrinking employee pool. Regardless, they started formal training programs, introduced apprenticeships, built relationships with educators and more…At Tooling U-SME, we are concerned that more manufacturers aren’t taking action since this has a big impact on the long-term health and competitiveness of the industry as a whole. There is a false sense of security among many manufacturers who are not recognizing these future challenges or investing in the development of their workforce today."
There is a false sense of security among many manufacturers who are not recognizing these future challenges or investing in the development of their workforce today."
—ToolingU-SME Vice President Jeannine Kunz
The companies that responded to the survey fall into five categories: procrastinator, strategist, role model and visionary.
The procrastinators nearly make up the majority of the respondents because 49% said that "their company has not begun assessing their manufacturing employee's current skills against skills they will require in the future." In fact, only "1 out of 20 (5%) acknowledge conducting a complete assessment of all staff." Since "nearly 9 out of 10 respondents (88%) said their company is having problems finding skilled workers in manufacturing," you would think there would be more urgency to address this problem. This problem will only get worse because "14% of respondents say they will lose a full quarter (25%) or more of their workforce to retirements in the next five years"
The highlights of the report are:
- "Key findings from responses to the survey from manufacturers of all sizes
- Insights on business pains, such as hiring needs, training resources, mentoring and talent development
- Best practices to immediately start ensuring your workforce is ready for the next decade"
The key findings are:
- "Less than one-third (29%) of respondents would characterize their company's talent development as good or excellent"
- "30% say their company has no community involvement (internships, co-op, etc) to help develop the proper skills of their incoming workers."
- "54% don't budget for employee development"
- "33% say their job-related training options are minimal"
- "88% say their company is below average when it comes to offering outside resources to upgrade the skill sets of employees"
While 74% agree that training needs in the organization impact a wide range of levels throughout the company…3 out of 4 (75%) say their company does not offer a structured training program on manufacturing skills. In addition, "less than half (45%) say their company has personnel designated to manage training and employee development."
The report identifies issues related to the skills gap that need to be addressed immediately:
1. Incoming employees — finding them
2. Incoming employees — training them
3. Incumbent workers — upgrading their skills to keep up with changing technology
With regard to finding manufacturing employees, I commented that we need a national manufacturing database of skilled workers when I gave my presentation on how to solve the skills shortage to the Cincinnati Chamber of Commerce. Many workers that have been laid off due to transferring manufacturing offshore or plant closures have no idea where to go to find a new job in manufacturing. They take lower-paying jobs outside of manufacturing because they can't uproot their family on the chance they could find a job at a manufacturer in another city.
The ToolingU-SME report urges manufacturing to establish training programs for both incoming workers and incumbent workers to upgrade their skills. The report identifies the following six steps for companies to take to get started immediately:
- "Build a business case for learning with senior management. Involve the right stakeholders in discussions and tie learning to performance so you can measure the results later. It is important to set expectations, get buy in and gather support for the program early on.
- Define and update your job roles with the required knowledge, skills and abilities needed to build strong performance on the job. This competency-based learning approach will lead to the positive return on investment (ROI) your stakeholders expect.
- Build career progressive models, showing growth from entry level to more senior levels. This modeling effort will improve employee engagement and retention, and allow the alignment of skills to pay.
- Benchmark incumbent employee competencies through knowledge and skills-based assessments to determine gaps in performance and build a training strategy to address them.
- Design a custom competency-based training curriculum using blended learning that consists of online and on-the-job training as well as other performance support.
- Ensure performance standards are measurable and trackable. These standards will validate you ROI investment."
What struck me is that all of these steps are integral to a company becoming a lean company. They are nearly identical to the requirements of "talent development" that are incorporated into the journey of transforming a company into a lean company. It would appear from this survey that the majority of manufacturers have not begun their journey to becoming even a lean manufacturer, much less a lean company.
My recommendation is to start by using the free Assessment tool of ToolingU-SME. Then you can decide what steps to take next. If your workers need specific manufacturing skills certification, then check out the classes offered by ToolingU-SME, either online or on-site.
Another source for training is the Manufacturing Extension Partnership Program (MEP), which is "a national network with hundreds of specialists who understand the needs of America's small manufacturers. The nationwide network consists of manufacturing extension partnership centers located in all 50 states and Puerto Rico. MEP provides companies with services and access to public and private resources to enhance growth, improve productivity, reduce costs and expand capacity." Locate your nearest MEP here. The MEPs have a variety of training programs that are available at reduced cost to manufacturers. California Manufacturing Technology Consulting (CMTC) is the designated MEP for California, and they offer training in lean manufacturing and many other subjects that would incorporate the above steps.
In California, companies can apply directly for a training grant from the Employment Training Panel (ETP) to help defray the cost of training or they can join an active ETP Multiple Employer Contract (MEC).
Many community college systems around the country offer training in specific manufacturing skills. California also has nine Centers for Applied Competitive Technology funded by the Chancellor's Office of the Community College system, which provides training in specific manufacturing skills as well as Lean Manufacturing.
A number of community colleges actually use the ToolingU-SME courses instead of developing their own curriculum. I have discussed some of the training offered at community colleges in California and other states in previous articles I have written. You can peruse these articles under the Training and Workforce Development categories on my website: www.savingusmanufacturing.com.
As more manufacturing is reshored to America, it will be even more critical to have the skilled workers we need to make American manufacturing great again. Do not procrastinate any longer on addressing this important problem.