Darlene Miller's long search is over, for now. About a month ago, her company, Permac Industries, hired an off-shift programmer for its Swiss-style CNC machinery, the culmination of a recruiting effort that surpassed two years.
"Finding skilled and trained workers is almost impossible," says Miller, president and CEO of the Burnsville, Minn., custom manufacturer of precision parts. "I used employment agencies. Our people used Craigslist, the workforce centers, state boards, college boards, technical schools, every concept you can think of, and still [we] could not find that trained person," she says.
"And the more advanced technology we get into, the tougher and tougher it is."
Toyota's Dennis Dio Parker shares similar concerns. Parker, who is assistant manager, North American Production Support Center, at Toyota Motor Engineering & Manufacturing North America, points out that a significant number of retirements are looming among workers at Toyota's Georgetown, Ky., plant, which at 26 years is the automaker's oldest U.S. facility. Its workforce includes about 600 skilled maintenance-technician positions.
He sees a dearth of career-ready candidates able to step into those slots as well as fill similar positions at Toyota's 14 other directly owned facilities.
"It is a huge problem," he says.
The dilemma facing Miller and Parker will come as no surprise to most manufacturers in the United States. Alarmed conversations about a skilled worker shortage in manufacturing are commonplace -- particularly a shortage of skilled production jobs such as CNC programmers, electrical and mechanical technicians, machinists and other crafts people. Indeed, 67% of respondents to a 2011 survey by Deloitte and the Manufacturing Institute reported a moderate to severe shortage of available qualified workers, with 56% anticipating a worsening shortage over the next three to five years. Moreover, those percentages climb to 83% and 76% for skilled production positions.
"Manufacturers are having the hardest time filling skilled production jobs that fuel their ability to innovate and grow," the report notes.
Not all manufacturers are merely sounding the alarm, however. Some -- and perhaps a growing number -- are like Permac Industries and Toyota (IW 1000/5). These two manufacturers, as well as steel giant ArcelorMittal (IW 1000/40), machine tool maker MAG IAS and others, have stepped off the sidelines and into actively participating in the development and training of the skilled production workers they need to remain competitive. To be sure, they are not doing it alone. Instead they are engaging partners like community colleges, manufacturing organizations, training providers and government resources.
Right Skills Now For Fast-Track Machining Needs
For Permac Industries' Miller, future hires may be easier to come by. Miller is a key player in the development of Right Skills Now, an accelerated training program aimed at helping smaller manufacturers find the skilled precision-machining talent they need -- and quickly.
Many smaller manufacturers, like Permac Industries, have the same skilled-workforce needs as larger firms but not the same resources to either obtain that talent or train them, Miller says. Coming out of the recession put an added damper on training because operations have been pared back, "and orders are fast and quick when they do come."
"It isn't like it used to be when you had lead time," she says. "You need to be able to jump, so your people have to be very efficient, and you don't really have a lot of extra hours to do training."
Miller is a member of the President's Council on Jobs and Competitiveness. That affiliation opened the door for a message she delivered to President Obama, who had been touting the message that all kids need to go to college, and then a continuing conversation that led to the launch of Right Skills Now.
"I said, 'Excuse me Mr. President, but all kids do not need to go to college. All kids need advanced training of some sort, but they do not necessarily need college,' and then I explained about the openings in our industry," she said.
Not only has Miller's industry been challenged by high schools that cut back or dropped technical training, but also by two-year community colleges whose programs were too generic or irrelevant to aid precision-machining firms like Permac Industries. Or the programs simply took too long to complete.
Providing An Antidote
Right Skills Now is an antidote to those challenges. The program launched last year as a pilot in Minnesota at Dunwoody College of Technology and South Central Community College. It is a 24-week program, broken down into 18 weeks of class and lab work, followed by a six-week paid internship, and prepares graduates to become CNC operators. Built on the National Association of Manufacturers-endorsed Manufacturing Skills Certification System, Right Skills Now's core partners include the NAM-affiliated Manufacturing Institute, training organization ACT Inc., the National Institute for Metalworking Skills and the president's Jobs Council.
Miller says she and others in her company, her industry's trade association, the Precision Machined Products Association and others in the industry collaborated with the partnering colleges to develop the training program.
"The colleges really worked well with us in adapting a curriculum that is what we, the manufacturers, wanted," she says.
Several students from the Right Skills Now program are slated to start internships soon at Permac Industries, and Miller says she hopes eventually to hire them -- and provide even more training opportunities.
"We don't want to just keep people at [CNC] operator levels," she says. "We want them to go to the next level."
Right Skills Now is already advancing to the next level, having expanded outside of Minnesota into Nevada. And Miller describes it as a nationally replicable template for technical training of any sort.
ArcelorMittal:'We Need to Do Something'
Last November, ArcelorMittal's Mark Langbehn stood in a United Steelworkers union hall in Cleveland and announced the local launch of the steel giant's Steelworker for the Future workforce development program. The effort's aim: to develop the next generation of mechanical and electrical technicians.
It wasn't the first such announcement by Langbehn, ArcelorMittal USA's manager of hourly employee training, or even the second. The company has 11 such programs in place in collaboration with community colleges in five states, with the first pilot launched in mid-2008. To date, the company has hired 16 of 22 graduates.
Combine baby-boomer retirements, increasingly sophisticated technology and a significant misperception by the general public about manufacturing as a career choice, and signs of impending trouble become difficult to miss. The ArcelorMittal training manager estimates that over the next three to five years the company's U.S. workforce will lose 200 to 220 craft people (mechanical and electrical technicians) per year by attrition alone.
"We knew and we had enough foresight three or four years ago to say, 'We are going to lose x amount of our workforce, and we need to do something about it. We have to grow our own,'" Langbehn says. "The way we decided to grow our own is through the two-year associate degree program with internships, so that we could evaluate the people in the program, and they could evaluate us as a company."
Like Permac, ArcelorMittal has collaborated on curriculum development at the schools with which the manufacturer partners. Unlike Right Skills Now, however, the Steelworker for the Future is two-and-a-half-year program, which includes four semesters of classroom training, plus two paid internships, one after the first semester of classroom training and another after the third semester.
Students shadow an electrical or mechanical technician during the first internship to gain a better understanding of the field they choose to pursue. During the second internship they perform hands-on work. Students earn an associate's degree upon successful completion of the program. Graduates who are hired as full-time employees then enter a one-year training effort at ArcelorMittal.
In Critically Short Supply
Nearly every level of manufacturing workforce development is experiencing some level of worker shortage, according to a skills gap study presented last year by The Manufacturing Institute and Deloitte. Nowhere is the need greater than among skilled production workers. More than 80% of U.S. manufacturers report a moderate to serious shortage.
Availability of qualified skilled production workers (machinists, operators, craft workers, distributors, technicians):
No shortage -- 5%
Low shortage --12%
Moderate shortage -- 38%
Serious shortage -- 45%
Source: Deloitte, The Manufacturing Institute, 2011 Skills Gap Study
There is no commitment by ArcelorMittal to hire a graduate of the Steelworker for the Future program. By the same token, graduates are not obligated to join the steelmaker as a full-time hire. They may even go to a competitor, which is okay, says Langbehn, because the program is meant to support manufacturing as a whole, not ArcelorMittal exclusively.
"Our job is to provide opportunities for young men and young women in our community, and make them more employable," he says. "On the other side of that coin, it's our job also to sell our company during that two-and-a-half-year program."
"We feel very comfortable that the majority of the students that go through the program, that make the grade, will come to work for ArcelorMittal when they're done," he says. "Up to this point, we've been very, very successful."
Always Be Training
"We always need to keep educating our workforce, whether they are new employees or have been in the workforce for years," says Bill Horwarth, president, MAG Global Services.
Machine tool manufacturer MAG Industrial Automation Systems has a comprehensive talent management program to make that happen, including engineering cooperatives, internships, leadership programs and more.
The skilled trades are the company's area of greatest concern, however. Like ArcelorMittal, MAG recognized several years ago the toll retirements eventually would take on its skilled production workforce, the "strong majority" of which are in the 55 to 65 age range.
"The reality is if you don't do something proactively, you're [eventually] not going to be able to produce your product," Horwarth notes. "The reason we did something about it is because we realized it would affect our future."
MAG addressed reality by reintroducing the apprenticeship, which once had been commonplace among machine tool makers. Indeed, one of the several machine-tool-making companies that came to comprise MAG is the former Cincinnati Milacron, which at one time had its own internal training school and educators for apprentices.
MAG's reinvigorated apprenticeship program mirrors some aspects of the training programs employed by Permac and ArcelorMittal. For example, the company now partners with a local educational institute, Gateway Community and Technical College, a two-year school that is part of Kentucky's community college system. In fact, MAG donated one of its products to the school so educators can train students on the manufacturer's own equipment. MAG also helped develop the curriculum.
However, the program differs in that students in MAG's apprenticeship program are full-time employees of the company, potentially enrolled in the program directly out of high school, but not necessarily. They receive wages and full benefits, and the company pays for their education. Because they work full time, participants typically need four years to complete their associate's degree.
Problem-Solving Skills Required
Where the apprenticeship is particularly useful, Horwarth says, is in developing trouble-shooting skills.
"It is one thing to be able to assemble a product and apply the electrical and all the elements to the product, but it is another thing when you build a product and it doesn't operate the way you want it to. To troubleshoot the product and understand why it is doing what it is doing, that takes a lot of skill and experience," he says. "You don't learn those in a classroom."
Horwarth says the company has been pleased with the quality of the apprentices. He knows of a single apprentice who turned out not to be a good employee and was let go. Horwarth then shared the story of a seasoned MAG installer who was doing a job in Russia, with an apprentice at his side. On his own initiative, the installer sent an email to MAG's human resources vice president to rave about the talent of the apprentice.
"It's those kinds of testimonials that say it's working," he says.
Costs Down: Capabilities Up
What's the gauge of a training program's success? One gauge may be its spreading deployment throughout an organization. That is what is happening with Toyota's U.S. Advanced Manufacturing Technician Program, a dual work/study program aimed at developing multiskilled maintenance technicians. It delivers an associate's degree to graduates upon successful completion as well as the potential for more advanced training, paid internships and full-time employment at Toyota.
The program, piloted at the automaker's Georgetown plant in 2002-2003, was set aside for several years before being reintroduced there in 2010. Since then it has spread to Toyota's West Virginia plant, which will welcome its first recruits this fall, and planning is under way to implement it at Toyota's Indiana and Mississippi locations.
Students in Toyota's AMT program attend classes two days a week at a partnering community college and work three days a week at Toyota, with pay. Not only do they receive training in such technical areas as fluid power, motors and controls, but their factory experience also includes a stint in production before moving into maintenance. As students progress through the program, they also learn problem-solving and lean-manufacturing practices, communication skills and desired work behaviors.
The Automotive Manufacturing Technical Education Collaborative has assisted in developing a curriculum for the program. AMTEC is a partnership among multiple automakers, including Toyota, Ford, General Motors and BMW, and several dozen community colleges.
"We may compete on the sales floor, but we can unite on developing people," says Toyota's Parker of the collaboration among competitors.
Parker says the first metrics coming in for the maintenance training program show promise: The costs to develop talent are dropping while the capabilities of the recruits are increasing. Training costs are declining, he says, because a) students pay their own college fees while pursuing an attractive educational program and b) the wages students earn are dollars Toyota would have spent for the work under any circumstance.
Seven of eight graduates who were offered full-time internships accepted the opportunity. Approximately 20 additional students were slated to graduate in early May.
Graduates of the AMT program are not guaranteed jobs at Toyota. Both business conditions and graduates' performances on additional tests factor in future Toyota employment. But Parker says, "Our anticipation is that our retention percentage will be very high."
More concerning to Parker is the dearth of recent high school students with the skills -- particularly in math -- needed to qualify for the AMT program. While the automaker would like its potential recruits to achieve a 23 on the math portion of the ACT college entrance exam to qualify for the Advanced Manufacturing Technician program, currently it does not ("or else we wouldn't have enough applicants," Parker says). Toyota set a purposely high math threshold, he notes, because analyses it conducted demonstrate higher math skills correlate to higher-performing workers.
While it may be an exaggeration to say higher participation by manufacturers correlates to better training outcomes, a growing number of manufacturers appears to believe that is the case.
Says Permac Industries' Miller: "Business really has to step out of their shells and get involved."