Our business revolves to a large extent around manufacturing – we implement business management software systems for companies who make and distribute a wide range of products – and have for nearly 30 years. So of course, the topic is bound to come up in this blog from time to time…
In spite of the concerns about a modern day downturn in manufacturing, the truth is that thousands of factory jobs are going unfulfilled across the U.S., according to Anna Sussman in the Sept. 2, 2016 Wall Street Journal. In fact, the number of unfilled jobs has been rising since 2009 and stands today at its highest level in 15 years according to the Labor Department.
The reason? Factory work has evolved tremendously during that period, and today’s new advanced machinery and automation systems require a new set of skills. Those lower-skilled jobs of workers laid off in recent decades due to recession, offshoring and technology aren’t coming back, and the ones that have replaced them are causing a mismatch and a growing problem for the economy, limiting some companies’ ability to boost productivity while weighing on growth.
At Ohio’s Kyocera Precision Tools, production is now twice what it was 25 years ago with just half the staff, thanks to higher-skilled workers and expensive new CNC machine tools. There, managers struggle to find workers with the electrical and mechanical skills required to run their complex machinery.
The Journal notes that this is mirrored in manufacturing jobs across the country, where openings have averaged 353,000 jobs per month, up from 122,000 in 2009.
In 2000, 53% of manufacturing workers had no education past high school. 15 years later, that figure was just 44% while the share with a college (or higher) degree increased by 8%. Increasingly, factory jobs are high-skill jobs, and such ‘upskilling’ in manufacturing “mirrors a broader bias in the economy toward more educated workers,” notes the Journal.
But companies say education and training systems have not kept up with industry needs, and therein we think, lay both the problem and the opportunity. As the Journal points out… “As manufacturing lost jobs to technology and outsourcing, young people pursued college degrees or jobs in the growing services sector. Colleges and high schools reduced their focus on technical education.”
Yet 8 in 10 manufacturing execs say the growing skills gap will affect their ability to keep up with customer demand according to a recent study by Deloitte.
With workers and educational institutions slow to adapt, companies can spend months searching for appropriate candidates. And these are good jobs, paying about $25 per hour or more. The solution is not the simple one of “pay more” experts say. As the president of Akron Tool & Die succinctly noted when interviewed, he would only lose a bidding war to bigger firms in his area and it won’t solve the problem of too few skilled workers.
We would add that it’s high time to look at the apprenticeship models of countries like Germany, where they recognize that not everyone is, nor should be, destined for college. And company/school educational programs are showing promise in many communities today.
But it will take all these and more in a concerted effort to solve the problem, and we can’t start moving soon enough.