John Rauschenberger of Ford Motor Co. (Dearborn, MI) has seen the writing on the wall. The future imperative for Ford's workforce -- like that of every other U.S. manufacturer -- will be to do more with less. As the wave of baby boomer retirements intensifies, the U.S. workforce will lose millions of employees, and price pressures from low-cost labor centers offshore are not expected to abate anytime soon.
So, Rauschenberger is thinking ahead. Though the $171 billion automaker is not currently experiencing major shortages, Rauschenberger isn't sitting idly by.
"We have to be more productive, and the way to do that is to have smarter people using good technology. That's the only way you can compete against cheaper, unskilled labor," says Rauschenberger, manager of personnel research and development for Ford. His professional mission is to ensure that Ford's workers will have the advanced skills they need to thrive throughout this century.
Toward that end, Rauschenberger has spent the past seven years working on creating skills assessments and a certification program for production workers with the Manufacturing Skills Standards Council (MSSC) of the Washington, DC-based National Council for Advanced Manufacturing (NACFAM). The MSSC certification system was finalized last November and 44 assessment centers nationwide have so far been certified to administer the program.
A Long Road to Mastery
In December, Rauschenberger presented the program, which includes four modules in foundational skills for production personnel, to Ford managers in Grand Rapids, MI. He has high hopes that the company will embrace the MSSC program over time, both as a way of giving its production workers desperately needed credentials and as a way to ensure that Ford will have the skills it needs for the foreseeable future.
"We are just starting. The effort [to create a certification program for production workers] is seven years old and yet absolutely brand new. We are trying to get some momentum going. It doesn't just happen by itself and it doesn't happen overnight," Rauschenberger says.
Although Ford is not currently experiencing significant labor shortages in skilled production workers, many manufacturers are. According to the 2005 Skills Gap Report sponsored by the National Association of Manufacturers (NAM) and Deloitte, 90% of the 815 NAM members surveyed indicated a "moderate to severe" shortage of qualified skilled production workers, with 83% reporting that the shortages are hurting their ability to serve customers. Nearly half said their current employees had inadequate problem-solving skills.
For the first time in the survey, manufacturers cited a "high-performance workforce" as the top driver for business success. Unfortunately, most manufacturers are not ready, willing, or able to put enough resources behind training to get that workforce where it needs to be. "There is a very serious gap between what manufacturers see as their success in the future and how they are supporting that success around training and development," says Stacey Jarrett Wagner, director of workforce initiatives for the Center for Workforce Success, NAM's research arm.
Steps to Take
According to Wagner, skills that are lacking among current manufacturing personnel are: analytical capability; written and oral communications; problem solving; collaboration; and technical expertise (including the ability to operate advanced manufacturing systems).
"Manufacturers are not doing what they need to do to achieve the high-performance workforce," Wagner says. So, what should you be doing to avoid falling behind? Following are a variety of best practices for training and education for manufacturers and the community at large:
- Get more training for current employees. Training and development is neglected in many organizations; it is often one of the first areas to be cut back when times get tough. That approach is extremely shortsighted, Wagner says, because when business conditions improve, a company could be caught without enough skilled workers to satisfy customer demand.
Another common pitfall is to provide a career path and/or training only for certain groups of employees. "Manufacturers are not training their entire workforce. They're training only production workers on job-specific skills. We would like to see it be pervasive across the organization," Wagner says. The training or human resources department should put together well-thought-out strategies for where they want to be in the next few years as well as an organizational skills road map for meeting that goal.
That doesn't mean adopting a knee-jerk recommendation such as spending 3% of your total payroll on training -- a reaction Eric Mittelstadt, CEO of NACFAM, has seen. "I'm suspicious of an across-the-board number like that. What you should spend on training depends on the company, the characteristics of its workforce, how successful they have been at attracting the right people," Mittelstadt says.
- Reevaluate -- and, where necessary, revamp -- recruitment and HR policies. Many people looking for work in the manufacturing sector report anecdotally that there is no current shortage of skilled employees. Many tell stories of having years' worth of relevant experience but not being a candidate for a particular job due to some minor variance from the way HR wrote the job description. Wagner agrees that can be a problem. "HR policies and practices really do need to be looked at. Manufacturers have been able to get by without reevaluating their hiring practices. They can't do that anymore," she says. Companies can't afford to overlook good people on a technicality.
- Take action to help improve the pipeline. The training/education problem is larger than any individual manufacturer. The number of math/science/engineering students graduating from U.S. institutions has been dwindling in recent years, with deleterious effects on the number of young people ready and willing to work in manufacturing. Part of this is due to people's perceptions about manufacturing jobs. "Everyone thinks manufacturing is a dirty, dumb, dangerous, and disappearing job," Mittelstadt says. "But there is a whole new set of requirements for running things and making decisions on the factory floor that is much more demanding than it used to be." Parents help foster a negative attitude toward manufacturing when their kids are coming up through the K-12 ranks by steering them to other types of careers. "Kids today still talk about the same careers that were talked about 50 years ago -- doctor, lawyer, teacher. But the manufacturing jobs are changing," Wagner says.
In addition to chipping away at the perception problem, "Math/science education needs help at all levels," Wagner says. Many manufacturers have turned to philanthropic efforts to support public schools, community colleges, and universities in their efforts to make math and science more compelling for today's students. Elementary schools, parents, community colleges, universities, governmental bodies, and industry -- "everyone needs to do a full-court press on this. There is no easy answer to this. There is no silver bullet," Mittelstadt says.
- View human capital as an investment, not a cost. Training/education is a difficult area because it has to do with people, who have their own brains and agendas. "This is hard. But most companies view people as an expenditure rather than an investment. Very progressive organizations have leaders who understand human capital should be viewed as an investment. It's an investment in your future ability to serve customers," Wagner says.
What is also needed is a change in perception about the continuous nature of education. "It's all about life-long learning," Wagner says. "None of us can afford to sit back and say, 'What I learned in college I can sit on for the rest of my life.'"