Imagine a room full of owners and executives from the manufacturing community gathered to hear a presentation on the topic, “Skilled Labor Gap in Today’s Work Environment.” It certainly wouldn’t be news to the aforementioned participants. On stage is a group of stakeholders who are discussing various solutions to the issue. Frustration mounts until finally one executive rises from his chair and asks, “How does this help me fill the 10 positions I have open right now?” He is quickly followed by others with a similar plea.
It’s no secret that manufacturing long stood as the road for non-college graduates to achieve a middle-class lifestyle. That lifestyle has become more difficult to achieve as manufacturing careers stateside have been declining for decades due to the migration of manufacturing jobs overseas and continuing automation on the factory floor.
As the demand for these positions dwindled, America’s educational system responded by eliminating traditional vocational training programs in the high schools and began focusing on academic paths geared toward preparing students for college. That trend was exaggerated when the Texas legislature mandated a high school academic program that left virtually no room for vocational training. With the new HB5 law, schools now have some flexibility in creating different academic programs better suited to the aptitude of the student, rather than a force-fed, one-size-fits-all track. Bringing vocational training back into high schools is an expensive proposition. It will take some time for “shop class” to return to high schools.
Aside from the cost of bringing such education back into schools, the image of manufacturing needs a new branding campaign. The misperception that manufacturing jobs are dirty or physically challenging has turned many teenagers off. Manufacturing is far more technical today than it ever was.
In addition to the lack of qualified candidates graduating high school, manufacturers are also dealing with the retirement of baby boomers. While many companies are poised and ready to grow, executives find themselves constrained by the inability to hire individuals with the required skill sets. The sheer quantity of boomers retiring over the next decade will continue to place more pressure on filling skilled positions.
The impact of this social and academic change is acutely felt across America now as a result of the renaissance in domestic manufacturing. With the rise of middle-class standards in less expensive labor countries and the advances in technology that have made cheaper energy available domestically, the shift in bringing jobs back to the U.S. is accelerating. A recent example is Flextronics LLC, which manufactures and assembles the Apple Mac Book Pro in Austin. The Taiwanese-owned company rapidly expanded from 800 employees locally to more than 4,000 and contributed to an already competitive market for skilled positions. Smaller companies have a difficult time competing with the pay and benefits offered by companies with a larger economy of scale.
In response to the skilled labor shortage, a collaborative effort between private industry, government, and education is taking place and mutual communication between industry and stakeholders is critical in addressing the issue. Manufacturers need to identify specific training they require so educators can design specific courses around this need. The demand for machinists and CNC operators is critical. Welders are also scarce due to the growth of the oil services industry.
The collaboration doesn’t necessarily end with identifying a specific course agenda. Many community colleges lack the specific equipment for specialized training. By working with local manufacturers to develop internship programs or offer the use of their facilities, hands-on training can take place. Once college administrators see the real demand and can show the placement of graduates, funding for the build out of on-campus training facilities can begin.
With so many veterans leaving service annually, there is an ample workforce available for hire. The military may be the largest vocational trainer in the country, but the skill sets veterans gain in the military often do not align with private industry. They have a basis and aptitude for filling the void, but may require additional training or refinement of the skills they acquired while serving.
Skills for Veterans, a program offered by the Texas Workforce Commission (TWC) is available to assist with the training and transition of veterans into the civilian workforce. The program offers tuition for training at local public community or technical colleges or the Texas Engineering Extensions Service. Employers can work with the college to designate the specific training in order to upgrade the skills of newly hired veterans.
To address these issues, all vested parties need to coordinate with each other. The resources are available and manufacturers should have an active voice.
And the 10 positions that needed to be filled? That evening TWC, manufacturers, and Austin Community College began designing training courses and funding avenues in order to fill them. Collaboration does produce results.
Kevin Fincher, CPA, is Treasurer of ARMA, the Austin Regional Manufacturers Association, and a tax advisory partner with Padgett, Stratemann & Co., LLP. Edward Latson is the Executive Director of ARMA.
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