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U.S. manufacturers are missing out on significant revenue due to talent shortages. Last year, the research firm Korn Ferry predicted that the unrealized output of manufacturing talent shortages will reach over $607 billion by 2030. Ouch.
Industry leaders grapple daily with deciding what levers to pull to attract and retain talented workers. As an industry, it is clear that to close the gap, we will need to better engage a wider cross-section of the population. As it stands, the industry is 79.5% white and only 29.2% of its employees are women, according to 2021 US Bureau of Labor Statistics Data. We’ll never close the gap until we figure out how to put the whole talent pool to work.
We also need to pay better. Salaries will naturally rise as technological innovation continues to spread through the industry, creating more advanced skill positions. But manufacturers struggling to staff their shifts should consider taking a leap and pumping more money into wages and benefits, hoping the money will flow back to their bottom line through production. If our non-profit work MAGNET (part of the Ohio and NIST Manufacturing Extension Partnership) is an indication it will.
Yet I find that these macro-level discussions only go so far. We need to be more specific, to talk about solutions. Sometimes the best solutions have been developed by companies looking to meet their own unique needs, something innovative they’ve come up with to fuel their pipeline. We can all learn something from their successes.
Sharing our victories can help spark ideas across the industry. Here are three innovative ways manufacturers are boosting their talent funnels.
Develop an internal training academy (and a robust talent pipeline)
Two decades ago, finding talent was easy for National Safety Apparel. The Cleveland-based company makes protective clothing for workers in industry and electric utilities, the U.S. military and the Postal Service. When executives needed to bring in a new batch of sewing staff, they just posted an ad in Cleveland Ordinary Merchant. Applications would be pouring in.
Over the years, however, the candidates have dried up. There just weren’t as many people with sewing or crafting skills. Thus, National Safety Apparel has found a way to attract and train talent. First, the NSA hired refugee resettlement agencies that helped bring immigrants to the area. The company created training programs for these groups that helped people find full-time positions.
In 2018, the NSA went further by creating an in-house sewing school. Interns are paid to learn how to sew, and graduates are placed in positions within the NSA. “We are able to hire people with even moderate to low sewing skills, but with a desire to learn,” says Sal Geraci, the company’s chief operating officer. The school lasts six weeks, with the first two weeks dedicated to machine acclimatization and the next four weeks dedicated to teamwork, learning the ins and outs of lean manufacturing in a modular environment.
“By the time they graduate from school and arrive at our main sewing factory, they are so much more advanced than when we provide accelerated training in the factory and immediately introduce them to a production team,” says Geraci.
The lesson for manufacturers? Investments in talent development, not just recruiting, can create a double win. Not only does this increase the core skills of the workforce, but it expands the talent base available to a company by allowing manufacturers to expand their network and then train for their specific needs.
Giving a second chance to people who are rebuilding their lives
Elsons International, too, has felt the sting of a shrinking talent pool. But the corrugated box manufacturer has taken a step that CEO Andrew Jackson calls its greatest competitive advantage: hiring people who were previously incarcerated.
Jackson says he comes from humble beginnings and never forgets what it’s like to be depressed in life. Many people struggle to overcome a criminal record as they seek employment and a new life after release. But Jackson believes in second chances. Before taking them on board, he strives to understand what the candidates did, how they spent their time behind bars, and ultimately how they changed during that time. “You know they made a mistake, but I want to know: during your incarceration, what did you do to change your trajectory?” he says.
Of course, the hiring approach is as much about strategy as it is about empathy. “If you know anything about an ex-offender who’s really determined to turn his life around, you know he’s going to be a better than average worker,” Jackson says. “I know they’re going to show up on time, they’re going to work a little harder and they’re going to be a great employee because they’re investing in making their lives better.”
It’s no surprise, then, that about half of Jackson’s staff are now made up of people who were previously incarcerated, and many have moved up the chain of command. A worker spent 19 years behind bars before joining Elsons – he is now a supervisor. Another member of staff recently suggested that the company institute allocate parking spaces. After years of having their pick of the lot, there is now competition from many more workers who have saved up and bought cars, ditching the bus. “I said, ‘No, you’ll just have to get here a little early,'” Jackson said.
For Jackson, it’s a sign that his efforts have worked, that the people he’s hired are sticking around and improving their lives. And it’s reaping the rewards of a talent pool that can keep up with the market.
Train high school students to become the advanced workers of the future
Manufacturing-rich northeast Ohio is currently suffering from a shortage of 10,000 to 12,000 workers. To get the problem under control, we need creative solutions like those presented by Elsons and National Safety Apparel. But we also need initiatives that create excitement and incentives early in life, encouraging young people to choose manufacturing careers.
MAGNET’s Early College, Early Career (ECEC) program gives high school students the opportunity to do paid apprenticeships with local manufacturers, working 1-2 days a week while earning college credits during their training. When they graduate, they are eligible for offers that may include full-time or part-time employment, as well as tuition reimbursement. The program also provides students with support services — from transportation to mentorship — that lower barriers to entry, allowing more people from more socioeconomic backgrounds to apply and succeed.
Deonia Duncan, who enrolled in the ECEC when she was 16 and landed a paid internship and then a full-time job at Lincoln Electric, credits the program’s finance classes with helping her learn to manage her silver.
In total, since the start of the ECEC program five years ago, 92 students have successfully graduated. Eighty-seven percent went straight to a career in manufacturing, straight to college, or a combination of the two.
“My greatest pride,” says Duncan, “is being able to help everyone as much as possible. My mother, she is quite happy. And my father, he is also happy. They’re not used to that sort of thing. They don’t have those kinds of jobs and they haven’t been offered those opportunities.
Northeast Ohio is still far from filling the 10,000 or more open manufacturing jobs. But these are encouraging signs of progress and proof that it is possible to overcome the talent shortage through innovative thinking and smart investment.
Ethan Karp is President and CEO, MAGNET (the Manufacturing and Growth Network), an Ohio manufacturing extension partnership.