American manufacturers are missing out on serious revenue due to talent shortages. Last year, the research firm Korn Ferry predicted that unrealized output from manufacturing talent shortfalls will grow to more than $607 billion by 2030. Ouch.
Manufacturing leaders struggle daily deciding which levers to pull to attract and keep talented workers. As an industry, it’s clear that to close the gap, we’ll need to better engage a broader cross-section of the population. As it currently stands, the industry is 79.5% white, and only 29.2% of its employees are women, according to 2021 U.S. Bureau of Labor Statistics data. We will never close the gap unless we figure out how to put the whole talent pool to work.
We need to pay better, too. Salaries will naturally rise as technology innovation continues to spread throughout the industry, creating more advanced skills positions. But manufacturers struggling to staff their shifts should consider taking a leap and pumping more money into pay and benefits, trusting that the cash will come back to their bottom lines via output. If our work at nonprofit MAGNET (part of the Ohio and NIST Manufacturing Extension Partnership) is any indication, it will.
Yet, I find that these macro level discussions only go so far. We need to get more granular, to talk solutions. Sometimes the best solutions have been developed by companies looking to serve their own unique needs, something innovative they’ve come up with to feed their pipeline. We can all learn something from their successes.
Sharing our wins can help spark ideas across the industry. Here are three innovative ways that manufacturers are supercharging their talent funnels.
Developing an In-House Training Academy (and a Robust Talent Pipeline)
Two decades ago, finding talent was easy for National Safety Apparel. The Cleveland-based company makes protective apparel for industrial and electrical utility workers, the U.S. militaryand the postal service. When leadership needed to bring in a new batch of sewing personnel, they’d simply put out an advertisement in the Cleveland Plain Dealer. The applications would come pouring in.
Through the years, though, the candidates dried up. There simply weren’t as many people with sewing or manufacturing skills. So, National Safety Apparel found a way to attract and train talent. First, NSA engaged refugee resettlement agencies that were helping bring immigrants to the area. The company created training programs for these groups that helped feed people into full-time positions.
In 2018, NSA went a step further, establishing an in-house sewing school. Trainees get paid to learn how to sew, and graduates are placed in positions within NSA. “We’re able to bring in people with even moderate to low-level sewing skills, but with a desire to learn,” says Sal Geraci, the company’s chief operating officer. The school runs six weeks, with the first two weeks devoted to getting acclimated on the machines and the next four weeks spent working within a team, learning the ins and outs of lean manufacturing in a modular environment.
“By the time they graduate from the school and come over to our main sewing factory, they’re so much more advanced than when we would provide accelerated training on the factory floor and immediately introduce them into a production team,” Geraci says.
The lesson for manufacturers? Investments in talent development—not just recruitment—can create a two-fold win. Not only does it increase the baseline skills of the workforce, but it broadens the talent base available to a company by allowing manufacturers to cast a wide net and then train for their specific needs.
Giving Second Chances to People Rebuilding Their Lives
Elsons International, too, has felt the sting of a shrinking talent pool. But the corrugated box maker has taken one step that CEO Andrew Jackson calls his greatest competitive advantage: hiring people who were previously incarcerated.
Jackson says he came from humble beginnings and never forgets what it’s like to be down in life. Many people struggle to overcome a criminal record as they search for jobs and a new life after their release. But Jackson believes in second chances. Before bringing them aboard, he works to understand what the applicants did, how they spent their time behind bars, and ultimately how they’ve changed during that time. “You know they’ve made a mistake, but I want to know: while you were incarcerated, what did you do to change your trajectory?” he says.
Of course, the hiring approach is about strategy as much as it is empathy. “If you know anything about an ex-offender who is really determined to change their life, you know they’re going to be a better worker than the average,” Jackson says. “I know they’re going to show up on time, they’re going to work a little harder, and they’re going to be a great employee because they’re invested in making their life better.”
No surprise, then, that about half of Jackson’s staff are now people who were previously incarcerated, and that many have moved up the chain of command. One worker spent 19 years behind bars before joining Elsons – he’s now a supervisor. Another staffer recently suggested the company institute assigned parking spots. After years of having his choice in the lot, there is now competition from many more workers who’ve saved up and bought cars, giving up the bus. “I said, ‘No, you’ll just have to get here a little earlier,’” Jackson says.
To Jackson, that’s a sign that his efforts have worked, that the folks he’s hired are sticking around and improving their lives. And he’s reaping the rewards of a talent pipeline that can keep up with the market.
Training High School Students to Be the Advanced Workers of the Future
Manufacturing-rich Northeast Ohio currently suffers from a shortage of between 10,000 and 12,000 workers. To get the problem under control, we need creative solutions like those presented by Elsons and National Safety Apparel. But we also need initiatives that create enthusiasm and incentives early in life, getting young people to choose careers in manufacturing.
MAGNET’s Early College, Early Career (ECEC) program gives high school students the chance to do paid apprenticeships at local manufacturers, working 1-2 days a week while earning college credit as they train. When they graduate, they’re eligible for offers that can include full- or part-time employment, plus college tuition reimbursement. The program also equips students with support services—from transportation to mentorship—that lower the barriers to entry, allowing more people from more socioeconomic backgrounds to apply and succeed.
Deonia Duncan, who enrolled in ECEC at age 16 and scored a paid internship and then a full-time job at Lincoln Electric, credits the program’s financial classes for helping her learn how to manage her money.
All in all, since the ECEC program began five years ago, 92 students have successfully graduated. Eighty-seven percent went straight into a manufacturing career, straight into college or a combination of both.
“My proudest moment,” says Duncan, “is being able to help everyone as much as possible. My mom, she’s pretty happy. And my dad, he’s also happy. They’re not used to things like that. They don’t have these kinds of jobs, and they weren’t offered these opportunities.”
Northeast Ohio is still a long way from filling all 10,000 or more open manufacturing jobs. But these are encouraging signs of progress, and proof that overcoming the talent shortage is possible with innovative thinking and smart investment.
Ethan Karp is president & CEO, MAGNET (the Manufacturing and Growth Network), an Ohio Manufacturing Extension Partnership.