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Manufacturing's Youth Problem

July 24, 2015
Manufacturing is one of four "promising" sectors for younger workers, but employers aren't doing enough to train and recruit them, a new Brookings study finds.

On Easter weekend in downtown Greenville, South Carolina, with all the gleeful grade-schoolers streaming into the streets, “you would have thought they were giving away free puppies,” says Jennifer Miller. But the puppy handout was actually a STEM fair, featuring friendly drones and a hovercraft that kids could ride made out of a blower, a hula hoop and a lawn chair.

Miller, the vice president and chief operating officer for the business development organization Upstate SC Alliance, says that only recently--in the past year--have manufacturers in the region made outreach to young people a priority.

According to a new Brookings Institution study, that newfound outlook is a baby step, at least, in the right direction. Rather than just relying on word of mouth and the occasional booth at the local job fair, manufacturers need think more deeply about engaging younger workers--and develop more sophisticated strategies to train and recruit young people for the skilled jobs manufacturers will need to fill.

The study, “Unemployment Among Young Adults,” named manufacturing as one of four “promising” industries that has not tapped into the potential of the younger workforce, to the detriment of both employers and workers. The other industries were transportation, logistics and healthcare.

The study focused on two cities, Louisville and Chicago, comparing the sectors where workers under 30 are getting hired with the sectors that offer them the best opportunities, like good wages and career advancement. Researchers, led by Brookings Fellow Martha Ross, compared employment and earnings data and conducted interviews with local employers on their workforce needs and strategies.

The study noted that workers under 30 aren’t seeing the benefits of economic recovery like older workers are.  Although unemployment has gradually fallen for the general U.S. population since the Great Recession (to 5.5% in March 2015) it has actually increased for younger workers—to 17.1% for 18- and 19-year-olds and 10.4% for 20- to 24-year-olds.

Younger workers tend to be concentrated in low-wage industries like restaurants, retail, and nursing care facilities, according to the study. Manufacturing, on the other hand, is showing more post-recession growth and paying higher than average wages for under-30s without a bachelor’s degree, but it isn’t attracting a proportionate number of young people.

Manufacturing subsectors deemed most promising for young people are fabricated metal, machinery, plastics and rubber products and primary metals.

The study mentioned 2014 research from Harvard Business School on school-to-work transition that found that employers being involved in education/training “beyond ‘light touch’ activities such as career days and occasional student visits” significantly improve hiring outcomes.

“Employers need to identify more clearly the skills necessary to execute their business plans and improve their strategies to recruit, assess and train for those skills,” the Brookings study noted. Employers also could benefit from a closer relationship with schools to increase credentialing and expand work-based learning.

Interviewees who took part in study, including plant and HR managers at manufacturing companies large and small, shared some thoughts on how to improve things. They advised that employers evaluate their in-house HR practices to determine “what skills are truly necessary and how to assess for them, and how to build their workforce from within as well,” Ross said in a phone interview.

“There was a manufacturer in Louisville who said, ‘The employers were such a part of the problem for so long—all we did was complain, but we never jumped in to tell people what we needed.’”

Another interviewee, a plant manager, described how his company changed their hiring and workforce. “He said initially when he joined, if you had a pulse and could pass a drug test, you were hired,” says Ross. “And he said they were doing their strategic business planning about how they wanted to grow and realized they could not do it if they didn’t have the talent they needed, so he started building strong relationships with area schools and training programs.”

Ross asked him if he had time for that, “and he basically said ‘If it’s a priority, you will make time for it.’”

An HR manager of a Chicago precision machining company that makes large durable metal parts told Ross that when she first came on, “she was very unsatisfied with their recruiting and hiring policies. They tended to use word of mouth and they tended to keep hiring Polish people because that was their network, and she was like, ‘That is not going to get us the workforce that we need.’”

To improve the selection process, that company determined the skill sets of their top performers in various occupations, then developed, adapted or found assessments to test for those skills in potential hires. Candidates must now perform specific tasks on the shop floor, like reading blueprints and solving problems, and senior workers observe and assess them. The company also branched out from the Polish referral network to an “all of the above” recruiting appraoch, finding candidates from Saturday job fairs, advertising on foreign language media, Linkedin and Craigslist.

The under-30 workforce is also increasingly diverse, with racial minorities expected to become the majority in that age group by 2027. “Improving the educational and employment outcomes of blacks and Hispanics is critical to maintaining a skilled and competitive labor force,” the study notes.

Ross says that a less-diverse older generation’s reluctance to actively recruit a more racially diverse workforce can be a hindrance to finding good candidates. “I think there’s a couple layers,” she says. “There’s a general adjustment that needs to happen with the transfer of older and younger workers. And I do think the fact that younger workers are more likely to be of color adds another layer to it.”

On the plus side, manufacturers were the only group of employers in the study who were specifically interested in targeting younger people. “That’s because they’re facing an upcoming retirement wave,” says Ross. “Other employers are certainly interested in young people, but they wouldn’t say that they want to target them.”

One manufacturing HR person told Ross she was “petrified” about upcoming retirements. “Another one said—and I’m pretty sure it’s hyperbole,” said Ross, “that the upcoming retirement wave was going to have as big an effect on the industry as offshoring to China.”

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