Pearson on Excellence: Manufacturers need to address the talent supply chain

According to a recent Accenture survey of manufacturers, 82 percent plan to increase U.S.-based production, 75 percent report a significant shortage of skilled resources, and 11 percent say that they estimate an average percentage drop in earnings due to increased production costs and revenue losses resulting from skills shortages.

So yes, American manufacturing companies may have a people problem. Anticipated demand for goods is strong enough to drive optimistic production projections. But there may not be enough qualified people available to make those plans a reality.

Part of the problem is that an increasing percentage of U.S. manufacturing roles require skilled workers who need months or even years of training. According to one survey respondent, “Eighty percent of the jobs in this company require a higher skill level, and the other 20 percent are probably semi-skilled. There are no unskilled jobs here anymore.”

Another concern is demographic: The U.S. Department of Labor reports that the average age of manufacturing labor was 44.1 years in 2011. In other words, a large number of workers are nearing retirement age.
It also should be noted that companies’ commitment to training is generally not the issue. More than 80 percent of survey respondents have training programs that go beyond the informal. Nearly 10 percent spend more than $5,000 annually per employee on skills training.

So if manufacturers accept the importance of training, a lasting solution to the people problem must be more multifaceted: Spend training dollars more wisely; support external skills-building programs; and think differently about to ways to attract and retain the best people. Here are some specific strategies for tackling the skills gap.

Offer learning experiences anytime, anywhere. More and more manufacturers are using remote, self-paced skills training, available 24/7, and delivered in ways that best suit the learner and the learning objective. A good resource is Tooling U, an online service that offers remote training for engineers, machinists, and press operators.

Take a certification approach to skills building. There are many programs to help manufacturers build certifiable skills. The Manufacturing Institute’s Skills Certification System offers certification in 14 different manufacturing skills. The National Institute for Metalworking Skills offers nationally recognized certifications in key metalworking areas.

Use an apprenticeship training model. One interviewee noted that “quality and expertise play an important role in the design and manufacture of [our] products. What better way to ensure that quality and build that expertise internally than through an apprenticeship program? Our apprenticeship program gives us the opportunity to invest in and grow our own workforce.”

Partner with community colleges and high school vocational programs to train existing talent and build a pipeline of future skilled workers. Manufacturers also can collaborate with colleges and universities to review curricula and provide ideas for revising them. Northeast Wisconsin Technical College, Lakeshore Technical College, and the University of Wisconsin Marinette collaborate with the area’s ship and yacht building industry to attract and train employees using a specialized curriculum.

Help change perceptions. The clearest illustration is an existing program called “Dream It. Do It.” It’s sponsored by members of The Manufacturing Institute and seeks to influence young people’s perceptions about manufacturing careers. Working at the local, grassroots level, the organization educates high school students and others about opportunities in manufacturing.

Expand the candidate pool. Companies with people problems may need to loosen their “perfect candidate” objectives—lengthy lists of optimal skills, education or experience. Instead, they could look for more general skills (including those gleaned outside their industry) or for people with somewhat overlapping skill sets that might serve as good starting points. Employers also can identify their best performers and up-skill motivated employees from their pools of unskilled workers.

Lastly, companies may be able to minimize their people problems with technology by using data analytics to correlate training and recruiting programs with key business and operational metrics. In effect, you’re addressing the people problem by taking an advanced supply chain approach to talent management: the “talent supply chain.”

You’re looking at what you have today and what you need tomorrow, and then using advanced processes, programs, and technologies to address long- and short-term needs.