How to secure America's future in manufacturingJuly 25, 2012: 10:58 AM ET
American companies are struggling to find qualified candidates while training efforts cannot keep pace with technology. Here's what we should be doing.
By Amy Kaslow
FORTUNE -- Stubbornly high unemployment, skills shortages, and the age-split workforce: unlikely spurs for United States manufacturing growth? These challenges could finally push those on the hiring end to develop the talent they need to stay competitive.
American companies are scouring resume piles for qualified candidates while hit or (mostly) miss workforce training efforts cannot keep pace with new technologies. Absent an adequate pool of talented domestic workers, firms will continue to go offshore where skilled labor is both abundant and affordable.
So, then, what can American manufacturers do to secure their future?
Make the case for a career in manufacturing
Employers want to hire local, but to have the talent, they have to create the interest. While the headlines would suggest otherwise, manufacturing is a vital part of the U.S. economy, offering jobseekers the widest range of occupations, mobility, and earning potential. U.S. manufacturers made a $1.8 trillion difference in the GDP last year, representing roughly 12% of total economic output. They paid higher wages than employers in other U.S. sectors, employed 11.5 million Americans, and supported almost 7 million jobs in other industries. The U.S. Labor Department's Bureau of Labor Statistics (BLS) calculates that for every dollar of value created in manufacturing, $1.40 is created in other sectors.
Manufacturers account for nearly two-thirds of U.S. R&D expenditures and employ more engineers and scientists than any other private sector industry. The sector's output makes up over half of U.S. exports and drives more net wealth creation than any other part of the nation's economy.
That's why slippage in this sector is treacherous. Lacking talent and stuck in a sluggish economy, American manufacturing firms have focused on survival, satisfying shareholders, and the expedient answer to talent shortages: outsourcing or offshoring. While many firms remain at the forefront of technology, that lead is narrowing. The U.S. labor market lost 687,000 high-tech manufacturing jobs to overseas production -- that's a 28% decrease in the base of American talent capable of producing high-tech goods since 2000.
Communicate the severity of the problem
We all have a stake. The dearth of skilled workers threatens national infrastructure and industrial competitiveness. The nation is severely short on operations and maintenance workers who create, run, and troubleshoot everything from storm sewers to nuclear reactors. Ditto for the utilities, transmission, and pipeline workers.
Many of these shortages are in so-called "middle-skill" jobs: nuclear electricians, hydraulic engineers, and people who make and run what we use everyday -- from life-saving tubing hook ups in hospital rooms to the bridges we cross. These are not jobs that can be off-shored. And despite the spending on highways and smart grids, building more infrastructure is questionable if the U.S. cannot even maintain and repair what it already has.
Terri Kaufman, the executive director of the Harrisburg, Pa.-based South Central Workforce Investment Board (WIB), knows this well. "There's a huge shortage out there," Kaufman says of the five-county region she oversees, where employers range from small five-person shops to major construction equipment producers. Ms. Kaufman echoes what other WIB directors say around the country: "There is a shortage of entry-level people who can read basic blueprints; they lack basic math, machine set-up, basic design. Companies are at risk: they cannot find people to do the job, they lose business, and they move out."
Manufacturing: Not dumb or dirty work
Craig Giffi, vice chairman and consumer and industrial products industry leader at Deloitte LLP, says there is such strong bias against manufacturing work among adults who advise young people about career choices, and skilled workers are in such short supply, that over half of U.S. firms surveyed by the Deloitte/Manufacturing Institute "anticipate the shortage to increase in the next three to five years."
The industry itself must work to change the public's perception of manufacturing. Manufacturers are the best messengers, especially if they dispatch successful, well-spoken employees to spread the word. Bosses should advertise and send teams to schools, training centers, workforce development boards, local grassroots organizations, and places that draw jobseekers to convey the kinds of coursework, certifications, and just-in-time training that is available on the job, in the classroom, at training centers, or online. Better yet, manufacturers should invite the public to visit their facilities and see what they can offer to prospective workers.
Make friends with the education system
Manufacturers ought to find or help nurture vocationally oriented schools in their communities. Consider Tracy Learning Center in Tracy, Calif., which has 1,200 K-12 students wedged in a dilapidated one-story school, short on resources but long on creativity. Three-time California School Superintendent Keith Larick designed the team-based, inter-disciplinary school to turn out workforce-ready graduates.
The school's dropout rate is zero. Most students graduate with community college and university credits, some with a full year under their belt. Graduates seek careers in trade fields, or more education, significantly in the STEM fields. The school requires 200 hours of internship experience and students work with mature mentors in their chosen "fields" -- in science labs, on factory floors, in design and engineering firms, with patent lawyers, in medical technology centers. Larick has heard from hundreds of other superintendents who want to try the model in their districts.
Mentorship and collaboration
Manufacturers can develop connections with future employees and sharpen their current workers' tech and communications skills. They can ask county school superintendents and local school boards to award high school community service credit to students who train mature workers in technology. Students can teach their older counterparts how to create spreadsheets and use social media.
Firms can also offer supervised internships for high school graduates to connect with mentors. This could help boost completion rates for certificates and two and four-year degree programs.
Nationwide, over 12 million students are projected to drop out of high school in the next 10 years, taking a $3 trillion bite out of the GDP. Manufacturers can market themselves as part of the solution.
With the vast majority of manufacturers in or bordering urban areas, there are many mentoring partner options. Junior Achievement reaches some four million K-12 students a year in 120 urban and suburban areas countrywide, teaching business plans, management, product development, marketing, ethics and competitive advantages. JA's 2012 Teens and Careers survey of 14 to 18 year-olds is encouraging for savvy manufacturers intent on cultivating young talent. Almost two-thirds of the respondents said they plan to pursue work in a STEM field.
The future of American manufacturing hinges on our willingness to make much better use of people. And we need to move fast.