THE BUSINESS OF VISCOSITY BLOG



    Will The Shrinking Workforce Get You? (Part 1)

    Posted by Rob Gladstone

    Dec 7, 2016 1:42:00 PM

    machinery-factory-work.jpgAbout five years ago, I visited one of our machining suppliers. During our tour, he told me that he could grow quickly if he could only find machinists. But, since he couldn’t find any, he was just raising prices and people were paying them.

    Last year, the Automotive Industry Action Group worked with Deloitte Consulting LLP to compile survey data in a report they called Quality 2020. In that report, the survey respondents identified the most critical issues impacting quality. In their top five was “Loss of Experience.” The report states:

    Over three-quarters of respondents rate their organizations, at best, moderately capable of preserving and transferring knowledge. However, over one-third of OEM respondents report somewhat or no capability.”

    Now, in the August 2016 edition of FLEXO Magazine, there were two references to the shrinking workforce. The first one I saw was in the article "Preparing Tomorrow’s Workforce." The article stated, “A key focus is preparing for a shrinking Generation X workforce that is retiring or moving on faster than it can be replaced.”

    The second reference was in the article "Pressing Forward." The magazine interviewed key personnel from Poly Print. The question was, “What is the biggest obstacle you face as a package printer in 2016?” One of the two issues they identified was “finding talented people.”  The Poly Print team added, “Finding good people continues to be an issue. I do not believe this is unique to Poly Print.”

    Let’s look a little bit at some causes of this “shortage” and then some possible actions we, as manufacturers, can take to help ensure a supply of good talent to support our companies.

    Cause #1 - The Stigma of Skilled Labor

    I found a paragraph that summarizes this problem better than I could. It comes from The Pete The Planner Blog:

    “As Americans, we are obsessed with college. Hell, I’m as guilty as anyone. I mention saving for college at least once a week on this blog alone. College is a great opportunity that can lead to many exciting and lucrative career options, but it doesn’t always. A degree doesn’t guarantee a job, just as not having a degree doesn’t guarantee low wages and poor job satisfaction. Skilled trade jobs make up a huge sector of jobs in the US, yet training for these jobs has gone out of style in the last couple of decades. Which is causing a huge problem. 53% of skilled laborers were over the age of 45 in 2012. And even though “middle skill” jobs account for 54% of the US labor market, only 44% of US workers are trained to the level required for the jobs. Herein lies the skilled laborer gap.”

    (emphasis added)

    Cause #2 – Misalignment Between Education and Business

    According to an article in The Atlantic, “a recent survey of college and university chief academic officers revealed that 96 percent believed that their institutions prepared students effectively for the workforce; in a separate poll only 33 percent of business leaders agreed with that judgment. That difference in perspective is unsurprising considering how poor the line of communication is between the worlds of business and education.” Later the article says, “Nor is a four-year college degree a guarantor of good prospects. A Federal Reserve Bank of New York analysis indicated that about 45 percent of recent college graduates are ‘underemployed,’ holding jobs that typically do not require a bachelor’s degree.”

    (emphasis added)

    Cause #3 – Manufacturers Aren’t Taking Action

    A key part of that same article in The Atlantic stated:

    “And, on the other side of the equation, employers are doing little to bridge a skills gap they decry as a threat to their competitiveness. In a survey of Harvard Business School alumni, roughly 25 percent indicated their employers had an active recruiting relationship with local educational institutions. Other avenues for cultivating sources of talent are also waning. Apprenticeship programs, for example, have declined by 40 percent between 2003 and 2013.

    Companies no longer seem to view themselves as responsible for addressing their own need for skilled workers; if anything, they appear to be resigned about remedying the situation, as an increasing number of companies view hiring a full-time employee as a solution of last resort.”

    (emphasis added)

    So, a shortage of skilled workers is clearly a problem. While the causes identified above are by no means the only factors contributing to the shortage, they are something we in the business community may be able to address.

    See part two of the "Will The Shrinking Workforce Get You?" blog for a discussion of ways to protect yourself from the impact of our shrinking skilled labor pool.

    With the difficulty of finding qualified labor in the current market, your processes need to be lean and efficient. Get your free ROI calculator to see where your system could be costing you. 

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    Topics: Manufacturing

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