A More Vital Economy
A website devoted to strategies to revitalize the U.S. economy

Workforce Issues

Are Manufacturing Workers Hard to Find?

And What to Do

March 12, 2012

            Studies of the challenges facing U.S. manufacturers often highlight difficulties finding appropriately skilled workers. That was one of the main messages of Northeastern University’s study of the future of manufacturing in Massachusetts and also the New England Council-Deloitte study of advanced manufacturing in New England. It is also a refrain in various national studies and commissions cited in the Resources section of this website.

            At one time, I was skeptical of such claims.  Given the precipitous fall-off in U.S. manufacturing employment since 2000 and in New England manufacturing since 1990, it seems that there should be plenty of manufacturing workers available to fill any openings. Nevertheless, in recent years, I have become more sympathetic to the argument. The sharp decline in manufacturing employment may have discouraged workers with versatile skills from pursuing jobs in manufacturing.  Additionally, I think that the decline in manufacturing has resulted in a loss of critical mass and a disruption of networks that historically were a source of suitable applicants.  This breakdown has made traditional recruiting approaches, especially heavy reliance on referrals, less effective.

            Below are my impressions of challenges facing manufacturers seeking to find workers. The problems seem different for different categories of workers - executives and professionals, skilled production workers, and semi-skilled and unskilled workers. So the responses required probably differ as well.

Executives and professionals

            Surveys of manufacturing executives suggest that finding executives and professionals is not the most pressing hiring challenge.  Nevertheless, some manufacturers do report difficulties; and if U.S. manufacturing is to compete more effectively in global markets than it has in the past decade, it is important that manufacturers be able to attract top-quality executives and professionals.  Yet these are the individuals with the most options. In particular, young people with the education and skills to work in many fields are likely to find manufacturing’s recent history a deterrent to seeking a career in this sector.  Arguments that this time is different and that today’s manufacturers are much more competitive than those of the past are not all that persuasive; the same arguments were used before by firms that are no longer with us.  Nor should manufacturers take much comfort in the fact that the typical manufacturing plant is not the dirty, noisy place of the past; working environments in other industries have improved as well.

            While manufacturing’s image may be tarnished, manufacturing continues to have positive attractions. It offers the allure of making tangible products and it provides opportunities to solve problems in ways that can have concrete results in new and better goods and more efficient production processes.  

            In recruiting executives and professionals, I think manufacturers have to do more themselves to address the picture of an industry in decline.  This image is not something that government can fix. Either individually or through trade associations, manufacturers should be recruiting at colleges and universities and making the case that they see a positive future for manufacturing – both for their individual firms and the sector in general.  Trade associations and prominent manufacturers also have to strike a balance in their lobbying efforts on tax, regulatory and other issues between their characterization of the criticality of the issue in question and their portrayal of the health of the industry.  While conveying a sense of crisis may win votes, it may reinforce the picture of manufacturing decline.

One area where government, especially state and local governments, can be helpful is in ensuring that students in the k-12 system are well grounded in science, technology, engineering and math (STEM), and thus, have the foundation to pursue more advanced occupations in manufacturing.  My impression is that many states are seeking to do this already.

Skilled production workers

            Finding skilled production workers is the big challenge.   Further, since many of today’s skilled workers are close to retirement age, this is likely to become a greater problem in the future.  Manufacturers say that young people are not being trained to take the place of current workers.  Vocational education, now called career and technical education (CTE), carries a stigma; and young people are steered towards college even when their interests lie elsewhere and even when many college students are failing to earn their degrees. Among high school students who are concentrating on career and technical education, manufacturing-related occupational courses have fallen somewhat in popularity.   Some manufacturers also say that high school training programs are not state-of-the-art.

            I suspect that these difficulties have intensified in more advanced manufacturing activities, where skills are increasingly sophisticated.  The decline in manufacturing may be an aggravating factor.  With the loss of manufacturing clusters, manufacturers must look further and further afield for workers with the necessary skills.  And even when job titles are the same, a skilled production worker from, say, Syracuse may possess a somewhat different body of knowledge than what is typical for a skilled worker in, say, Worcester.  While jobs are likely to differ even for firms within the same industry and geographic area, one probably has a better sense of what a prospective hire who worked at the plant down the street knows than one from 200 miles away.  In an environment in which manufacturing has lost its critical mass, greater use of standardized manufacturing credentials appears to offer considerable promise.

            The Manufacturing Institute, an affiliate of the National Association of Manufacturers (NAM), has been promoting the adoption of manufacturing credentials that would provide employers with assurance that a prospective employee has acquired certain skills.  The basic credential is the National Career Readiness Certificate (NCRC) developed by ACT, Inc. – better known for its college admission tests. The NCRC provides an assessment of work-related mathematical and reading ability, the capacity to absorb and interpret information, as well as an evaluation of soft skills.  Building on the NCRC is the NAM-endorsed Manufacturing Skills Certification System, which provides certifications in various specific manufacturing competencies.  The Certified Production Technician certification ensures that employees are knowledgeable about such matters as safety, quality assurance and manufacturing processes, whereas more advanced certifications confirm that workers have both hands-on and theoretical knowledge in specific skill areas. Even when the certifications do not match exactly the needs of the recruiting manufacturer, they should make it easier to identify where additional training is needed. 

Widespread adoption of common standards is key to their effectiveness in matching workers and employers.  Many occupations currently require a formal credential of some sort, and many educational institutions offer credentials intended to show competence in those occupations.  But to the degree that these credentials differ – or seem to differ – from one another, comparing prospective credentialed employees is more difficult.  Accordingly, the Manufacturing Institute and ACT are trying to promote widespread use of their credentialing system among manufacturers in hiring and promotion decisions, while at the same time they are trying to persuade community colleges and vocational high schools to integrate the awarding of such certificates into their manufacturing-oriented programs.

            Realistically, firms’ best chance of success in finding highly specialized skilled workers may lie in training their own – starting with current workers with lower level skills but who have proved their reliability and intellectual capacity and offering those workers the training to take the next step.  In this they may be able to enlist the help of community colleges.  Clearly, larger manufacturers with more potential trainees have an advantage in doing so; but smaller manufacturers may be able to work with local industry associations to put together the necessary numbers and develop the appropriate programs.  On-the-job apprenticeships are also a time-honored approach that many companies still employ with success.   Firms can take some small comfort that the loss of manufacturing clusters means that they are less likely to lose their newly upgraded workers to a competitor down the street.

Semi-skilled and unskilled workers

            With respect to semi-skilled and unskilled workers, I think the problem is less a shortage of applicants than a shortage of applicants with the appropriate expectations and work ethic.  As part of a project on job opportunities for lower-income residents in Springfield, Massachusetts, the Federal Reserve Bank of Boston conducted interviews and a survey of firms, including manufacturers, that regularly hire entry-level workers. According to these firms, job applicants were relatively plentiful, but many applicants were not prepared for the demands of the job.  Failures of pre-hire drug tests were common, and attendance and tardiness problems were frequently encountered among new hires.  Firms relied heavily on employees’ referrals in recruiting and hiring and they looked to past work experience as the best indicator of likely success. 

            Thus, here again, the decline in manufacturing and the breaking up of manufacturing clusters may make hiring more difficult, because manufacturers cannot look as much to referrals, particularly of workers who have had manufacturing experience, to fill vacancies.  Back when manufacturing accounted for 15 to 20 percent of total employment and considerably more in some communities, a manufacturing firm seeking to hire could look to its existing workforce to spread the word about vacancies and make recommendations.  Current employees would often have acquaintances with suitable experience or at least aptitude and interest.  And the applicants they referred would know about the nature of the job in advance and whether it was something they were willing and able to do.  If hired, they probably felt some peer pressure to live up to the positive words of those who recommended them.  And the employees who made the referrals would have an interest in making sure that the new hires succeeded. Today, with the manufacturing sector so reduced in size, current workers may not know people with the relevant experience. 

            Use of standardized credentials may help compensate for the breakdown in referral networks.  The National Career Readiness Certificate is specifically designed to provide some assurance about the work readiness and cognitive skills of entry-level workers.  Cultivating relationships with local community colleges and vocational high schools is another, complementary approach.  These relationships will require some effort on the employer’s part. Occasional requests for a recommendation are unlikely to yield much.  To build trust one needs an on-going relationship. The school or college needs to know in some depth the nature of the work done at the manufacturer and the type of worker required. This, in turn, may require some involvement in developing curriculum. But establishing a continuing relationship with an educational institution that provides training in manufacturing production processes may be a good method of finding suitable to new employees.

 

Vocational Education and the Manufacturing Workforce

March 15, 2012

 

            The Graduate School of Education at Harvard University released a paper in 2011, Pathways to Prosperity: Meeting the Challenge of Preparing Young Americans for the 21st Century, calling for more alternatives – more pathways – to success in the labor market than the standard college preparation that predominates in U.S. secondary education. In particular, the paper calls for more high-quality vocational education and work-linked learning.  As the paper acknowledges, similar calls for educational programs more closely linked to work experience have been made in the past.  However, arguments for alternative pathways that incorporate closer ties to work and that may lead to credentials other than a BA have been strengthened by two developments:  first, many young adults in the United States are struggling to find their place in the workforce and, second, international comparisons show that the United States is losing ground in educational attainment and performance to countries that offer more varied approaches.

            The Pathways paper was motivated by concerns that a focus on college preparation is not serving the needs of many students.  Many students are not succeeding in acquiring a college degree and would be better prepared for their working lives with more occupationally oriented programs resulting in industry-recognized credentials. Additionally, many students learn better if they can see a clear relationship between what they are learning and its application in the workplace.  For these students, more occupationally oriented programs can raise interest and achievement; some of these students may even be encouraged by the experience to continue on to college.

While the Pathways paper was concerned primarily about the educational and employment needs of young adults, its recommendations for more vocational programing in high school may also address some of the workforce challenges of the manufacturing sector. High schools offering occupational credits usually have programs in manufacturing-related activities.  These programs should provide students with both valued skills and exposure to the nature of work in manufacturing, making them more productive employees if they seek a job in manufacturing after school. And some of those who go on to college may remain sufficiently interested in manufacturing that they pursue careers as engineers or production managers. 

As a Massachusetts resident, I was pleased – and a bit surprised - to learn from the Pathways report that Massachusetts’ vocational schools are considered among the nation’s best.  I myself have heard employers and educators speak very positively about the quality of graduates from Massachusetts’ vocational schools and about graduates’ success in securing employment. Nevertheless, I generally think about Massachusetts’ educational advantages in terms of the high fraction of the adult population with college degrees and the state’s high scores on national tests of students’ abilities in reading and mathematics.  However, a 2008 white paper published by the Pioneer Institute found that Massachusetts’ students in Vocational and Technical Education (VTE) high schools compare favorably with general education and college-preparatory students in terms of graduation rates and passing the high-stakes Massachusetts Comprehensive Assessment System (MCAS) test.  Massachusetts VTE schools spend about half their time in “shop” but still have strong academic programs and extra-curricular activities.  Most VTE schools have waiting lists. One negative - the cost per VTE student is notably higher than for other students, in part because of the need for sophisticated equipment. 

The National Center for Education Statistics (NCES) has been producing a report on career and technical education (CTE) , the current term for vocational education, every five or so years for the past two decades.  The most recent report, Career and Technical Education in the United States:1990 to 2005 provides information about changing participation in vocational education. 

According to the NCES report, about 5 percent of public high schools specialize in CTE, although most high schools offer some CTE courses.  Most students take one or two occupational programs, even if their future aspirations are to attend college.  Based on the experience of high school graduates, overall student participation in CTE was similar in 1990 and 2005 but shifts occurred among programs. Over 90 percent of graduates took at least one occupational course in both years. However, the fraction with three credits in a single program – an “occupational concentration” – fell slightly, from 23 percent to 21 percent.  The fraction of students with a concentration in business services fell sharply. The fraction with a concentration in courses related to manufacturing also fell. In 2005, 3 percent of graduates had a concentration in materials production, print production or other precision production, compared to 5 percent in 1990.  

Probably the most noteworthy change described in the NCES report on CTE is an increase in the academic preparation of high school graduates with high concentrations in occupational education.  The number of credits in core academic subjects that were acquired by students with 4 or more occupational credits increased more than the academic credits of those with lower occupational concentrations. Relatedly, much larger fractions of graduates with four or more occupational credits met the New Basics academic standards in 2005 than in 1990 or completed 4-year college-preparatory requirements.  The fractions of all high school graduates who met these standards also increased, but the increases were larger for those with the strongest occupational orientations.  We do not know whether this increase in academic preparation involved any tradeoffs, such as a higher dropout rate. 

The Massachusetts VTE schools examined in the Pioneer Institute white paper are an illustration of this increasing emphasis on academic preparation.  According to the white paper, the VTE schools were opposed when Massachusetts introduced its high-stakes MCAS test in the early 1990s.  The MCAS forced the VTE schools to place greater emphasis on academics than had previously been the case. However, the results have been gratifying: MCAS pass rates at VTE schools compare well with the rest of the system, enhancing the stature of the VTE schools. 

For high school graduates with an occupational concentration, increased academic preparation is clearly a very positive development. These have more postsecondary education and career options, and their productivity in whatever occupation they choose is likely to be higher. For manufacturing employers seeking to hire these graduates, the implications are more ambiguous.  The graduates are likely to be more productive employees, with more upward potential; but they have more occupational alternatives available to them. 

The Pathways report speaks very positively about the apprenticeship systems in Germany and Switzerland, although rejecting the “tracking” that steers some young people into these programs.  In an apprenticeship, a younger worker works for pay under the close supervision of more experienced workers until he/she has mastered the intricacies of the chosen occupation.  This process commonly takes three or four years. Thus, apprenticeships seem as though they might be a way of meeting manufacturers’ needs for highly skilled workers.  The problem is that the number of apprenticeships in the United States is currently rather small and manufacturing accounts for only a small fraction of them. 

Robert Lerman has authored or co-authored several papers for the Urban Institute and the Center for American Progress advocating more use of apprenticeships in the United States.  He cites research showing that apprenticeships provide substantial financial benefits to the apprentices, while he finds that employer sponsors of registered apprenticeships are strongly supportive of these programs.  One of the primary benefits of apprenticeships to employers is providing skilled workers. About 500,000 individuals are in registered apprenticeships in the United States, with perhaps a similar number in unregistered apprenticeships. By comparison, over 15 million students are enrolled in two- and four-year colleges.  Construction accounts for over 50 percent of apprentices, manufacturing only 5 percent.  Within manufacturing, aerospace and motor vehicles seem to be most active employers of apprentices. 

Lerman calls for more aggressive promotion of apprenticeships by the federal government, possibly supplemented with incentives in the form of tax credits for training new apprentices. He notes that several states offer modest tax credits for training apprentices in selected fields, including some manufacturing industries.  Lerman also calls for more collaboration between community colleges and apprenticeship programs.

Web Hosting Companies