Small and medium-sized manufacturers (SMMs) are under constant pressure to address tomorrow’s challenges today. To keep up and stay ahead of their competition, they need to ensure their workforce has the necessary skills and tools to take each challenge in stride.
However, the manufacturing industry is experiencing a particularly challenging time finding and retaining skilled workers. According to Deloitte and The Manufacturing Institute, this “skills gap” will result in 2.1 million unfilled jobs by 2030 and a $1 trillion loss for the US economy.
So, what should SMMs do to combat this pervasive, industry-wide challenge? Let's take a look at how workforce development can help.
What is Workforce Development?
Workforce development is a set of essential actions, plans, and programs companies use to develop their employees’ aptitude and skills. A well-defined workforce development approach will respond to current skillset gaps, trends, and challenges in the workforce, and bridge them with the required competencies.
Manufacturers can leverage workforce development programs to develop and retain skilled workers and build a sustainable long-term business strategy.
Workforce development is also a critical element of community economic development. While individual companies or organizations typically build and run workforce development programs, such initiatives can promote stable, sustainable, and well-balanced economic growth. By building skill sets and opening doors for new career opportunities, workforce development programs directly improve the quality of life and buying power in local communities.
What Factors Have Contributed to the Skills Gap?
The U.S. manufacturing industry’s biggest challenge is finding skilled workers who have long-term prospects in the industry and wish to invest more effort into learning, growing with a company, and expanding their expertise.
Some of the causes of the workforce skills gap facing manufacturers include:
- An outdated stigma around manufacturing jobs, often positioning them as less successful than jobs in other industries
- Lack of awareness when it comes to career paths in manufacturing, income groups, and necessary skill sets
- A generalized opinion that post-high school degrees are the most viable way to have a fulfilling career
- The growing number of workers retiring and leaving the industry
How Does Workforce Development Benefit Manufacturers?
As technology continues to progress and demand remains high, investing in formalized training and workforce development is extremely important for the manufacturing industry as a whole.
For individual SMMs, offering workforce development programs has been proven to attract new workers, increase efficiency, and motivate employees. In addition, these programs have also been known to reduce turnover —and with the average cost of hiring one new employee at around 33% of the worker’s yearly salary, employee turnover can be a damaging loss for SMMs.
Workforce development programs should be seen as a mutually beneficial partnership between employer and employee, and not a unidirectional relationship.
Types of Workplace Development Programs for SMMs
Internal, work-based learning opportunities like apprenticeships or mentoring can help nurture workers’ abilities and build strong relationships within an organization. Work-based learning offers organizations a predefined training structure and the ability to home-grow the talent they need.
Secondary School and Community College Programs
Recruiting workers from schools and community colleges makes the hiring process easier and faster. By getting involved and partnering with local programs, SMMs can not only source skilled workers by having a greater say in the curriculum but also help their local economy grow.
Frontline leadership can make or break an organization. The relationship between managers and their employees has a direct impact on workforce morale, as well as the quality of the product and service. Organizations should invest in strengthening their frontline leadership so they have the skills to effectively lead and aid workforce productivity.
Best Practices for SMMs Implementing a Workforce Development Program
To make a workforce development program successful, companies should follow a set of tried-and-true practices and keep an eye on both the big picture and the smaller details of implementation.
1. Establish Present and Future Goals for the Program
The challenges SMMs face today aren’t going anywhere, especially if they go unsolved. Many SMMs get caught in the trap of only thinking about satisfying the needs of today when they should also consider their future vision and the long-term needs of the market.
SMMs should ask themselves questions like, “Where is our market moving to?”, “Will we make the same things we make today in the future?”, “Do we need to introduce more technology to become more competitive and stave off foreign competition?”, and “Do we have a backfill of people to replace workers who retire?” The answers to these questions will help SMMs define their goals for the immediate and long-term future.
To ensure an organization prioritizes workforce development, SMMs should also include it in their overall strategic plans. Including training as a key part of the business model will help organizations prepare for any new opportunities that arise.
2. Actively Participate With Other Players in the Industry
SMMs should consider their organization’s role within its larger community. Oftentimes this community includes three bubbles: the SMM (or employer), training providers (community colleges, external programs, etc.), and job seekers (high school grads, veterans, people changing careers, emerging workforce, etc.).
Coordinating and communicating with these three bubbles allows each entity to understand the needs of the other and work together to achieve their respective goals. In an ideal situation, employers stay in contact with training providers so providers can help deliver workers with the necessary skills. Then, both the employer and providers communicate with job seekers so they know where to join the pipeline stream.
3. Improve Company Culture to Attract and Retain Talent
SMMs should aim to create a work environment in which they recognize employees for their value and offer them fulfilling jobs that make them want to come back to work every day. This may require offering things like more flexible scheduling, benefits and incentives that match workers’ desires, and growth opportunities like development programs.
Employees want to grow professionally, earn a living, take care of their families, and meet their personal goals. Employers that have the most success attracting and retaining talent make an effort to improve the attractiveness of their company.
4. Partner With a School or School District
Partnering with a middle school, high school, or even an entire school district, will help SMMs establish visibility in their communities and give them access to the future workforce. Interacting with students at pivotal points in their development will allow SMMs to combat the negative stigmas and communicate the value of a manufacturing career.
In addition, consistent interaction with teachers and students’ parents or guardians will communicate the organization’s dedication to its community and create evangelists for the company.
5. Communicate the Programs’ Benefits to Employees
Workforce development programs shouldn’t be another box to check. Training programs should always be relevant and have clearly communicated purpose and value. Whether it helps employees do their jobs more safely, or helps them overcome obstacles in their roles, that value needs to be communicated.
Oftentimes, if an employee can learn something that makes their work less frustrating, they’re more likely to stay with their organization.
6. Offer Varied Types of Instruction
As previously mentioned, employees need to view development programs as positive growth opportunities rather than dry vocational training they dread. Intentionally designing a curriculum that engages the workforce and makes them think critically about the subjects will help the success of the overall initiative. Integrating different types of instruction such as classroom lectures, videos, and hands-on exercises will help keep them involved.
7. Consistently Assess the Programs’ Success
Finally, as with any business initiative, workforce development programs need consistent evaluation. Continual assessment will allow SMMs to identify aspects that don’t perform as intended or aspects that perform better than intended. This insight will allow an organization to pivot and improve where necessary.
Resources for SMMs to Implement a Workforce Development Program
Implementing a workforce development program can seem like a daunting task, especially for smaller manufacturers with limited resources. But, thankfully, manufacturers of any size have access to a large number of resources and support organizations that help with everything from implementation to offsetting wages.
NIST Manufacturing Extension Partnership (MEP)
Every manufacturer has access to its local, regional, or state NIST MEP center, via the NIST website. Every MEP center is uniquely positioned to help manufacturers solve any challenge they face. If the MEP center can’t directly help an organization, it has a network of experts that has someone who can.
Economic Development Councils and Industrial Development Agencies
Economic Development Councils and Industrial Development Agencies often have financial resources for growing manufacturers or manufacturers at the risk of shrinking. These resources include tax incentives, tax breaks, finances for training, and more.
Workforce Development Boards
Workforce Development Boards offer resources to employees and job seekers. Oftentimes, a Workforce Development Board can help an employer connect with prospective employees and even help offset an employee's wages while they’re in training.
Many community colleges offer industry partners seats on steering committees. SMMs should consider partnering with local community colleges so they have a voice in curriculum development and other programs that will eventually support their business. By partnering with local schools, SMMs also reach potential candidates in their neighborhoods and help alleviate barriers to employment like transportation and childcare.
A manufacturer’s most valuable asset is its employees. Organizations that invest in the growth and expertise of their workforce not only see more long-term success but also help their employees find satisfaction in their jobs. Fulfilled, upskilled workers will positively impact their organizations, as well as contribute to the manufacturing industry by creating and promoting a precedent of success.
If you want to get started implementing a workforce development program in your organization but need some extra support, CMTC offers experience and experts that can help. Contact us and we’ll help you build a program that will sustain your pipeline and equip you for a stable future.
About the Author
Gregg Profozich is a manufacturing, operations and technology executive who believes that manufacturing is the key creator of wealth in the economy and that a strong manufacturing sector is critical to our nation’s prosperity and security now, and for future generations. Across his 20-year plus career in manufacturing, operations and technology consulting, Mr. Profozich helped manufacturing companies from the Fortune 500 to the small, independents significantly improve their productivity and competitiveness.