Jeannine Kunz Managing Director Workforce & Education SME
FOCUS ON THE
WorkForce A
new year is upon us, bringing great optimism and op- portunity for the manufacturing industry. The ticking clock, however, reminds us we are closer to the end of the decade when a perfect storm of a limited employee pipe- line, a retiring workforce, reshoring and the changing pace of technology is expected to place even greater labor demands on manufacturers, challenged by an already slim supply of skilled workers.
While there are positive signs that manufacturers are starting to take action, there is much still to do to ensure the industry and our nation remain competitive. After all, keeping the manufacturing engine going and growing is an important driver for the US economy and for the country to remain competitive. With nearly 12 million Americans (or 9% of the workforce) employed directly in manufacturing according to the National Association of Manufacturers, the industry is a strong job creator and generates jobs in other industries. For continued growth, manufacturers must have ac- cess to skilled labor, an area where the industry is severely challenged. According to a recent SME survey, 9 out of 10 manufacturers are having difficulty finding skilled workers and they say this is directly hurting their bottom line. The same survey showed that not having access to a talented workforce is impacting production, quality, innovation and growth. With businesses success on the line, focusing on training and development should be the clear choice. However, while employers invest in equipment, tooling and materials, they of- ten neglect to make a similar investment in their employees. If workers don’t keep up with technological advances, the whole structure moves out of balance. A well-trained employee will more effectively utilize the capability of new equipment, lead- ing to increased innovation and productivity.
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ManufacturingEngineeringMedia.com | January 2014
Trends in Workforce Development: Some Manufacturers Are Minding the (Skilled Labor) Gap
Three Workforce Development Trends
There are positive signs that manufacturers are begin- ning to understand the importance of addressing this skilled labor gap now before it’s too late. Tapping into these three workforce development trends can help organizations commit to making 2014 the year of change when it comes to training and development.
1. Manufacturers are taking ownership of training and development programs
The good news is that, according to our SME survey, nearly half of manufacturers say they have a plan in place to address their need to find skilled workers. That is progress. However, that means that the other half (54%) still don’t have a plan. Finding and developing a strong pipeline is not an over- night fix and, fortunately, some prescient manufacturers such as SGS Tool Company in Munroe Falls, OH, are great models for addressing this. The 62-year-old manufacturer of round, solid carbide cutting tools started looking at the growing skills gap issue a number of years ago and made a commitment to continuous improvement and developing its associates. SGS began working with area schools, from junior high through college level, to establish a pipeline of future as- sociates. It also adopted an internal training program, which included online training from Tooling U-SME. Today, SGS’s strategy is paying off with metrics related to retention and engagement well above industry average, all helping address the skilled labor shortage. The company has just 5% turnover when many manufacturers are seeing turnover rates of 23–30%. In fact, the average SGS associate has worked at the company for 15 years.
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