All companies struggle to attract and retain top talent. But in recent years, as manufacturing has heated up, this problem threatens to slow down growth in that segment in particular.
At Prime Advantage, which is a buying group for manufacturing firms, we have monitored this issue for small and midsized industrial manufacturers over the past seven years through a regular survey of our 750-plus members. The survey, known as the Prime Advantage Purchasing and Manufacturing (PM) Survey, showed that while companies are growing and looking to hire, finding qualified workers is becoming harder.
The latest Purchasing and Manufacturing Survey from Prime Advantage, conducted in August 2014, showed that 50% of manufacturing company members expected to make new hires in the last half of the year (see chart). This hiring trend has steadily improved over the past five years.
Small and midsized manufacturers have continued to grow and add new employees since the recession, a bright spot for the US economy.
However, this survey also showed that the top barrier to growth is the lack of qualified workers (see chart below).
The top growth barrier for small and midsized industrial manufacturers in 2014 is access to qualified workers, according to the 2014 Prime Advantage Purchasing and Manufacturing Survey.
A career in manufacturing may not be top of mind for those entering the workforce. Visions of dirty facilities and monotonous work reminiscent of old world manufacturing may come to mind. In reality, today's manufacturing environment is vastly different. Technological advancements, process improvements, and a focus on value-added services have transformed the sector.
Fortunately, a number of manufacturers, trade schools, and economic development partnerships throughout the US have recognized this issue and started taking steps to overcome these misconceptions about careers in manufacturing. Manufacturing Day, launched by our partner the Fabricator and Manufacturers Association, International (FMA) in partnership with other national manufacturing advocates, addresses this lack of awareness through events that welcome students and potential workers to experience life in a modern-day plant.
Manufacturers have begun taking initiative on their own to find and train new workers, such as Prime Advantage member company DeWys Manufacturing, a Marne, MI-based metal fabricator.
This western Michigan company invested thousands of dollars in career fairs, with little success. Company president Jonathan DeWys (pronounced de-wise), founded DeWys University in 2012 in order to provide a better solution: an in-house educational program.
The company started with a welding training program, then gradually rolled out training programs to other areas, including 12-week training classes in welding, press brakes, machining, powder coating, and most recently, cutting.
"The first six weeks of each training program is very hands-on," said Laura Elsner, workforce development and HR manager at DeWys Manufacturing. "Then it shifts to six weeks of intensive work where the participants are applying the training they have received, but with a trainer still in background and available for any assistance."
Elsner, who worked with the company's trainers to create a course syllabus and training path, said the results have yielded a tremendous success and led the company to begin collaborating with area high schools.
"We have a 95% graduation rate from the 12 week programs," said Elsner. "We have been doing the training for almost three years with a 60% retention rate (total) which would actually be higher if we factored in the graduates that ended up transferring to other operations at our company."
The Michigan Manufacturers Association recognized DeWys Manufacturing as the 2013 Manufacturer of the Year for its success with DeWys University.
Louise O'Sullivan, CEO and founder of Prime Advantage, said:
We know that manufacturers across the US often face an uphill battle in finding qualified workers. Careers in manufacturing today are highly challenging and rewarding, and provide people with steady and solid employment opportunities. We are pleased to see that companies like DeWys are having such success in overcoming this problem, and have great optimism that similar programs designed by our members and others will help overcome this barrier to growth.
Dan Grant, Vice President of Sales for Prime Advantage, co-authored this article.