How to train U.S. workers back into manufacturing jobs

June 29, 2011: 10:35 AM ET

Despite gloomy job prospects, many American manufacturers are on the prowl for top talent, but say that not enough workers are trained for the tasks.

By Elizabeth G. Olson, contributor

President Obama speaks on the economy following a tour of Cree, Inc, a lighting manufacturer in Durham, N.C. on June 13

FORTUNE -- When machine shops were in almost every American high school, students could learn the mechanical basics that could prepare them for an entry-level manufacturing job.

Applicants today, manufacturers complain, often do not have such elementary shop skills, let alone the computer skills and other knowledge required for more complicated and sophisticated manufacturing processes. And, some acknowledge, manufacturing needs to overcome its down-market image as menial and monotonous work.

"It's not drudgery," says Collie Hutter, co-founder of Click Bond, Inc., a Carson City, Nev., company which makes industrial fasteners for airplanes and other transportation markets. "People sometimes think that way about manufacturing.

"But we have 125 computers on our floor. We have complex machines. Workers have to know how to enter data, how to do the math, how to measure and also to write and communicate, among other things."

Otherwise, Hutter and other manufacturer employers say that jobs go begging, despite the country's current 9.1% unemployment rate.

Whether that's due to inadequate education and training, outsourcing jobs overseas, or corporate failure to create U.S.-based jobs is vigorously debated. There are as many culprits as there are economic commentators and, given the roller-coaster economy, there is no one solution that will create masses of jobs.

Manufacturing industry hiring has been a bright spot in the overall employment picture. Hiring rose for 20 straight months until it dipped in May. And over the next decade, the 20 occupations in the manufacturing industry that are expected to need the greatest number of workers will require at least some post-secondary education, according to the Manufacturing Institute, which is part of the National Association of Manufacturers. At the top end, they include managers, who earn an average annual wage of $107,970 and industrial engineers, who earn $75,740.

Those 20 occupations, according to data from Chmura Economics & Analytics and the U.S. Department of Labor, will provide more than 1 million jobs over the decade -- more than half of which will be in high-tech industries. And such jobs pay higher average wages than all other jobs except for those in health care and social assistance.

But skills requirements for these jobs are ramping up, with 12% more jobs this year requiring a higher level of skills than what similar jobs required in 2003, according to Institute data.

One credential to rule them all

Manufacturers agree that the first step toward helping under-qualified applicants fill current and future openings is to ramp up training that will prepare job candidates for the factory floor. More than 30 states, with the backing of industry and the federal government, are introducing a new national credentialing system for community college students and employers across manufacturing sectors.

The Manufacturing Institute developed a credentialing system to coordinate programs in community and technical colleges with skills certificate-granting associations like the American Welding Society to assist people seeking a certificate or degree, or both.

The Manufacturing Skills Certification system offers more uniform credentialing than current state or academic efforts, and it won the support of President Obama, who, earlier this month, said he would back an effort to help 500,000 community college students obtain industry-recognized credentials.

"So if you're a company looking to hire, you'll know exactly what kind of training went into a specific degree," Obama said in an appearance earlier this month at Northern Virginia Community College. And graduates will know that the community college diploma they earn "will be valuable when you hit the job market," he added.

The White House also proposed a program to train 10,000 engineering students a year. Speaking earlier this month at a A lighting fixture and component manufacturer in Durham, N.C., Obama said that high-tech businesses are reporting a scarcity of applicants who have the necessary math and computer skills.

Is training really enough?

Critics like the American Engineering Association counter that there are plenty of American engineers ready to work but have been laid off by companies eager to replace them with less costly foreign-born counterparts. But businesses argue that U.S. colleges are graduating too few engineers to meet their needs.

Others say that such job training programs are too small to make a difference. "We need to triple and quadruple what we're doing at community colleges with retraining to really start moving the unemployment numbers," says William J. Holstein, author of the recently published book, The Next American Economy. "We need to think big, not incrementally."

Holstein agrees that the American workforce needs retraining, but "not all kinds of training and retraining are effective. Much of it is wasted effort.

The White House's new jobs council has offered familiar prescriptions to address the job conundrum like providing loans to small businesses, rather than proposing any cutting-edge solutions, underscoring just how difficult it is to create jobs.

The council has been tasked with coming up with broad fixes to create 1 million jobs in the next two years. And that would only account for a third of the jobs that have disappeared from American soil, according to U.S. Commerce Department data.

Some prominent industry giants, including food processor Archer Daniels Midland (ADM), have lined up behind the nationally recognized skills certificate program.

"We have trouble finding those with skills we need like electricians and welders," explains Mike D'Ambrose, the company's senior vice president for human resources.

ADM, which has signed on to help 30,000 high-risk teenagers earn credentials for high-demand jobs, routinely trains its new hires, but "that's not enough on its own," D'Ambrose acknowledges.

The Decatur, Ill.-based company works with local community and technical colleges, he says, but it endorses the broader certificate approach to make credentials portable and recognized across the manufacturing industry.

At the much smaller Click Bond, co-founder Collie Hutter argues that having such a coordinated effort could be key to forecasting what kinds of jobs are going to be created and ensuring that community colleges prepare students for new, as yet unknown, careers.

Emily DeRocco, president of the Manufacturing Institute, says that the certificate program "will create a bigger pool of highly qualified people with skills that are portable" and help offset the looming shortage of well-trained workers due to the 2.7 million Baby Boomers expected to retire this decade.

Gary Green, president of the Forsyth Technical Community College, in Winston-Salem, N.C., says his institution already has revamped its curriculum to align with the new manufacturing skills system.

North Carolina is facing a steep 9.7% unemployment, but, Green says, "Companies want workers with higher levels of machining and other skills to work on heavy equipment and other metal manufacturing that has moved to the state."

It all comes down to whether companies can find the workers they need. According to a Boston Consulting Group survey published in May, company executives say skilled workers are "the single most critical element of innovation success -- and the hardest to acquire."

Read more from this Fortune.com special report:

Made (again) in the USA: The return of American manufacturing
Lost in a sea of troubling economic data is one bright spot: America is once again competing for -- and winning -- factories and manufacturing operations.

The secret role of energy in bringing U.S. jobs back
How a reliable grid can trump cheap wages

Why we left our factories in China
Fed up with the poor quality of having their products made in China, American businesses like Sleek Audio are moving production back home.

Investors pile into the bet against China
Manufacturing jobs are leaving China and returning to the U.S. But many investors are betting that that may actually be the least of China's problems.

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