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Monday, July 28, 2014

A Machine Maker Invests to Close the Skills Gap

Does a skills gap exist in North American manufacturing? The answer appears to depend on perspective.

Those who analyze manufacturing are skeptical, saying that, except in extraordinary cases, low-growth data on jobs and wages do not signal a crisis, much less a reason to be concerned about workforce skills. Manufacturers say there is one, explaining that they have a difficult time finding workers with the skills to operate advanced machinery.

The notion of a skills gap, however, has attracted a lot of attention, notably from educators, who seek more money for STEM (science, technology, engineering, and math) courses and other resources; politicians, who see a worthy cause to champion; and unemployed and underemployed workers who view manufacturing as a viable career but are often shut out from jobs due to a lack of job-specific training.

What’s playing out on many shop floors right now is aging journeymen that are near or at retirement age and uncertainty whether younger workers will be available to replace them.

Here and in upcoming articles, I will look at the issue of manufacturing skills, how it is being addressed, and how it could evolve for companies and workers. First up: the manufacturer’s perspective.

Fives Cincinnati, of Hebron, Ky., is a major OEM of advanced metal and composite machining systems. William Weier, the company’s human resources director, said regional manufacturing jobs in northern Kentucky and southern Ohio often go unfilled due to a lack of workers. The Northern Kentucky Industrial Park (NKIP) Industry Partnership estimates that there are 680 unfilled manufacturing jobs in that part of the state, and this could reach 2,500 in three years and 6,250 in 10 years.

Bill Weier

Bill Weier

Fives Cincinnati started a four-year apprentice program in 2007 to address the worker shortage. The program trains four to six new employees per year and currently has eight apprentices in various stages of training. “We’ve gotten some tremendous talent from that program,” he said.

The machinery supplier works with Gateway Community & Technical College, a local school, to develop classes for its apprentice program and provides extensive on-the-job training. Apprentices work 40 hours (or more) per week at Fives Cincinnati and then attend classes at night. They earn associate degrees and state certification in electrical technology, machining, mechatronics, and related areas and can pursue more education, including four-year engineering degrees.

Weier estimates that each apprentice costs the company $200,000 for education and training, but the ROI takes only a year, as measured by increased productivity and its impact on operations.

MORE ON THOMASNET NEWS: Has Manufacturing Productivity Been Squeezed Dry? 

When apprentices graduate, their pay increases to $42,360 per year, which rises with overtime and promotions. Apprentices agree to work at Fives Cincinnati for two years after graduation.

Salaries can increase significantly over time and with greater skills. Apprentices who eventually learn how to assemble the machining systems that Fives Cincinnati builds (some are as big as a house, Weier remarked) and validate them for customer acceptance in plants worldwide can attain six-figure incomes, he noted.

Graduates can move off the shop floor and into management, notably sales, technical support, supply chain management, and engineering — all of which require broad skills. “Everything starts on the shop floor,” Weier said. “It’s amazing where they can go from there.”

Of note, program graduates offset the shop-floor age range. Weier noted that 70 percent of Fives Cincinnati’s workforce are over 50 years old; on their effective hire dates, the apprentice graduates have ranged from 19 to 35 years old, which means that the Millennials — the 18- to 30-year-olds who make up the largest segment of the national workforce — are well represented.

Along with injecting youth onto the shop floor, the apprentices develop working relationships with older industry veterans, who pass their insight and knowledge they have acquired. “A lot of the knowledge about our machines is not in books, it comes from senior employees,” Weier explained.

Fives Cincinnati is spreading the word about the benefits of manufacturing to local high schools, students, and teachers through a NKIP ambassador program. Through peer-to-peer contact, it informs students about the opportunities manufacturing offers while changing misconceptions that might exist about the work. Two ambassadors from each school tour facilities to see what advanced manufacturing is like and learn about pay and promotion opportunities. They report to a designated teacher and inform their peers about what they learned.

These initiatives, while successful, are expensive. Which is why more support from the federal government would be welcome. “Manufacturing can’t continue to eat the full cost of all this,” Weier said.

The federal government has increased funding for STEM initiatives in K-12 and college to $3.1 billion in fiscal 2014, arguably a minor amount for a pivotal sector. While more money could be forthcoming, manufacturers will likely have to rely on their own enterprise to find good workers.

Next, I’ll look at what a smaller company is doing about the skills gap.

 

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