At first glance, the numbers and trends defy common sense. The manufacturing industry, as a whole, has reduced its workforce in the United States by an estimated three million workers since 1998. Yet -- assuming that at least a portion of the three million workers are still looking for employment -- manufacturers claim they can't find qualified workers. Where have all the workers gone?
While many of the same workers are still here, the plants, factories and manufacturing facilities are constantly changing. Many of the low-skilled jobs have been moved to Mexico, India, China and other low-cost locations. The jobs that remain require computer knowledge, math and science skills and advanced knowledge of modern manufacturing techniques.
The trend toward advanced manufacturing facilities that need operators with the skills to run multimillion-dollar machines, however, did not suddenly appear on the U.S. manufacturing landscape. For years manufacturers have been increasing their use of automation technology. Manufacturing workers, however, have not kept pace -- in many cases through no fault of their own.
"Manufacturers are willing to invest millions and millions in technology and machinery, but they usually forget to invest a few hundred dollars to get an employee up-to-speed on how to run the technology," says Jack Schron Jr., president of Jergens Inc., a Cleveland-based tooling components manufacturer. "When you ask any executive what his most valuable asset is, 'people' is the answer. But if you ask how much is being invested in education for the employees, the answer many times is zero. The skills shortage is one of the largest problems facing manufacturers."
In many cases, training and education budget lines are the first to get cut when times get tough. When business improves, the budgets are rarely funded to where they were before cost cutting decisions were made -- and many times training and education dollars never return at all, says Dick Hill, vice president and general manager, manufacturing advisory group, ARC Advisory Group (Dedham, MA). "I came from the process industry where training was very important, but only when there was a start-up or new machinery," Hill says. "After that, training is forgotten about. Manufacturers do understand that the lack of skills and ongoing training is a major problem, but whether they are responding to it is really on a case-by-case basis."
However, the skills crisis isn't confined to highly technological and specialized disciplines, such as IT or engineering. Softer skills are lacking as well, according to Gene Nelson, the 2005 president of the Society of Manufacturing Engineers (SME, Dearborn, MI), an industry organization that, through its Education Foundation, has numerous scholarships and grants promoting continuing education and careers in manufacturing. "There are losses all across manufacturing and there are a number of reasons that people will debate about. But the one thing that everyone agrees on is that education is a problem," Nelson says. "You'd think the competency gap would be limited to circuitry, engineering, electrical work and computer skills, but some of the top things that manufacturers say is lacking in the workforce are basic skills -- writing, mathematics -- and softer skills like communications and teamwork."
The SME isn't the only manufacturing industry association concerned about training and education in the manufacturing workforce. The National Association of Manufacturers (NAM, Washington D.C.) and the National Council for Advanced Manufacturing (NACFAM, Washington D.C.), to name a few, all have launched training and education programs.
Looming Skills Shortage
NAM continually points to the lack of trained workers as a major problem. In fact, recently, both the outgoing 2004 NAM president, Jerry Jasinowski, and the incoming 2005 president, John Engler, highlighted the skills gap. "We face extraordinary challenges including an educational system that is failing to produce the skilled workers needed for the 21st century manufacturing workplace," Jasinowski said in a statement.
Engler, the former three-term governor of Michigan, added, "A key priority should be to do a better job at every level educating and training the next generation of manufacturing workers. The looming shortage of skilled manufacturing employees is a real and growing threat to our ability to compete in today's high-tech global economy."
Other industry groups have been working to improve skills across a number of disciplines. NACFAM established the Manufacturing Skill Standards Council (MSSC) in 1998 to develop a skill standards system for manufacturing in response to the industry's need to find skilled workers. The MSSC system is designed to give manufacturers a yardstick to measure, improve and profit from a workforce trained in cutting-edge manufacturing skills. Likewise, MSSC certifications will give employees a competitive edge: a certification that they meet industry standards for excellence that is recognized by current or prospective employers.
Wanted: Blue Collar Training
Still, manufacturing's record on training and education is spotty at best. Large Fortune 500 companies commonly have MBA and executive level programs, but many lack robust "blue collar" training courses, notes Jergens' Schron. "Many more manufacturers have programs for white collar training. We have people who are running million of dollars worth of machinery on the floor. It is much harder to replace [a plant floor] person than it is to find a kid with an MBA who wants to be in marketing," Schron says. Meanwhile, smaller manufacturers lack the resources to invest in full-blown training programs for their typically smaller number of workers, forcing employees to invest in their own training through community colleges -- something that may not be practical for many workers given financial or scheduling situations.
Luckily, newer technology may provide a path for a manufacturer of any size to control its own destiny when it comes to the skills of its workforce. Online training courses are gaining popularity as manufacturers search for ways to train existing workers and attract new ones. While it's not new (high-tech companies, financial services firms and universities have been using the technology for a while), the content and curriculum for manufacturing disciplines is finally catching up.
In 1999, Jergens realized that in order to keep its workforce up to date on the latest technologies it needed a way to find efficient and convenient ways to train factory floor employees. Since the manufacturing industry lacked any online training resources at the time, Jergens decided to not only write its own curriculum but to also develop its own online learning management system (LMS). The result is Tooling University (www.toolingu .com). The online training program offers 125 different classes (48 of which have been translated into Spanish) on topics such as computer numerical controls (CNC), CAD/CAM, electrical maintenance and circuitry.
"We found that the skills shortage was a major issue," says Greg Jones, marketing director, Tooling University. "We are different than some companies in the LMS area because we develop the content and the system. When we started, Tooling University was for our own employees. But we found that, as e-learning began to grow and as we continued to develop the LMS and the content, it made sense to make the training available to the outside world." In 2001, Tooling U was offered to the industry.
There are many advantages to LMS-based training, according to Judy Sweeney, research director at Boston-based AMR Research. "A lot of companies are turning to newer techniques for training," Sweeney says. "E-learning is a popular way to keep people's skill sets up to date." However, while e-learning and LMS technology have advanced to the point where they are practical, sometimes the advanced content is lacking, warns Sweeney.
Content Needed for LMS
LMS providers are working rapidly to overcome this perception and increase the content in their offerings. By late 2005, 220 different courses will be offered through Tooling U and an estimated 10,000 users will have completed classes, according to Jergens' Schron, who is also the founder of Tooling University. Most of the users will be from outside of Jergens' employee base, including from other manufacturers, community colleges and high schools. Tooling U has active training programs through partnerships with the SME, Precision Metalforming Association, National Institute of Metalworking Skills, American Machine Tool Distributors' Association, Lincoln Electric, Haas Automation Inc. and GE Fanuc Automation, to name a few.
"We have five professional [curriculum] writers, and we could easily hire five to seven more and we would never catch up," Schron says. "Technology is constantly advancing and changing."
More importantly, LMS gives manufacturers the ability to track and document which workers complete training and also test workers on the courses they have taken. LMS "gives back-end documentation so a manager or supervisor can verify that a worker has gone through the training," Jones says. "It's more than having an employee sit in a room and watch a video. Testing can be done to make sure that the employee understands the information."
Most recently, Tooling U launched the Career and Apprenticeship Learning Management System (CALMS). CALMS expands the functionality of the Tooling U LMS, allowing training administrators to keep track of offline training programs, like apprenticeship programs, along with their online training program within their corporate Administration Center account at Tooling U.
Manufacturers are also using learning management systems to train geographically dispersed workers on new software updates or new applications. Alltech (Lexington, KY), a biotechnology manufacturing company that provides natural solutions to animal feed and food industries, has 1,500 employees in 63 countries with annual sales of $250 million. Training such a remote workforce on new software, sales practices for new products or simply to reinforce the company's strategy was causing headaches, reports Tim Arthur, global director of management information systems at Alltech.
Corporate Training Culture
Luckily, Alltech has a tradition of training workers. "Alltech is all about training," Arthur says. "We have 50 Ph.D. students and our goal is to up that to 100 students. We have a mini-MBA program for executives that is based in an e-learning environment." Alltech's MBA program is through University College Dublin's Smurfit Business School. (Alltech's choice of Smurfit is due partially to its close ties to Ireland. The company's founder is Dr. Pearse Lyons, a yeast biochemist from Ireland, its European Bioscience and Marketing Center is in Dunboyne, Ireland and, not coincidentally, the Lexington, KY, headquarters has an Irish pub where 5:00 p.m. happy hours encourage employees to meet and exchange ideas.)
But in order to train such a diverse workforce, Alltech relies on a three-tier priority model that, interestingly, has technology at the bottom. Culture, Arthur says, is the number one issue because Alltech needs to understand the employees' needs and how they work and learn in different parts of the world. "Skills are the second priority because just having the workers is not enough. Workers need to be educated on technology," he adds.
"Sound technology, while important, is the third priority and it is sometimes the easiest part," admits Arthur. "MIS can change technology literally overnight. But we can't train people fast enough. Training is a much larger issue than most companies realize."
Alltech relies on an e-learning application from ReCor Corp. (Evanston, IL), a provider of technology-based training products and services for desktop software applications. "It allows us to break-down chapters and have a quiz at the end of training. Based on that quiz, you either pass of fail," Arthur says. Over 1,000 users have used the e-learning technology so far. Employees have received training for Exact Software's (Andover, MA) Macola and e-Synergy ERP technology, Saleslogix's (Scottsdale, AZ) CRM software and IBM's (Armonk, NY) Lotus Notes, among others.
"It's not efficient or practical for us to send our people all over the globe when we need to train" employees on new versions of software, Arthur says. "We can collaborate with our office in Thailand in an interactive conference and on new training modules."
However, despite e-learning technology and the acknowledgement by manufacturers that there is a growing skills gap, the numbers remain ominous. According to a 2003 study by NAM taken after the most recent recession ended, 80% of manufacturers say they have had trouble finding qualified applicants, including engineers, IT workers, production workers and machinists. NAM and its research and education affiliate, The Manufacturing Institute, have launched the Manufacturing Careers campaign to help solve the problem. The goal of the campaign, which is geared toward young adults, is to make manufacturing a preferred career choice by 2010 through integrated awareness, career-planning and public-education programs.
From now until 2010, however, manufacturers are faced with a growing skills gap partially caused by retiring baby boomers. The ultimate solution, say experts, is a combination of grants and scholarships that promote engineering and manufacturing as a viable and interesting career, an increased focus on math and science in elementary and high schools and, most importantly, manufacturers helping their own cause with training programs, continuing education and partnerships with universities, community colleges and technical schools.