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Skilled factory workers hard to find

A report says more than half of American companies are having trouble finding enough skilled workers to hire, especially in the manufacturing industry.

Kai Ryssdal: OK, wrap your head around this one if you can. A couple of weeks ago the OECD -- that's the Organization for Economic Cooperation and Development -- issued a report that said more than half of American companies are having trouble finding enough skilled workers to hire. That's with 8.2 percent unemployment. We're doing worse than Germany, China, England and Canada.

And get this: the skills gap -- as it's known -- has actually grown in the past five years, in spite of more people looking for work and ever-more Americans walking around with college degrees and trade school certificates.

What gives? Marketplace's Mitchell Hartman reports.


Mitchell Hartman: Where you hear about the skills gap most is in high-end manufacturing.

Darlene Miller: This is one of our CNC multi-axis lathes.

The kind of factory where the floors are squeaky-clean and the machines are run by computer.

Miller: We have job openings. The people are not trained for the jobs that are open today.

That’s Darlene Miller, who runs Permac Industries. It’s an aerospace and medical-device manufacturer outside Minneapolis.

In Reading, Pa., Elaine McDevitt’s Rose Corporation is about the same size -- 50 employees. They make precision machine parts.

Elaine McDevitt: Ten years ago, it was a lot easier to find welders with a lot of skill. Not just a welder that said he was a welder, but welders that could do the type of welding we need. People are coming out of school not with the math skills that they used to.

Gardner Carrick at the Manufacturing Institute has the numbers on this for 2011.

Gardner Carrick: Over 80 percent of manufacturers were having a moderate or serious shortage of skilled production workers. Over 600,000 jobs were open in manufacturing because companies were unable to find qualified applicants.

Really? With so many Americans looking for work? Many of them middle-aged -- presumably they got a decent education back when such a thing was possible.

Peter Cappelli: I think a lot of employers are just being irrational about this.

Management professor Peter Cappelli at the Wharton School is what I call the ‘big skeptic’ on the so-called ‘skills gap.’

Cappelli: If employers really are willing to leave a position open for months and months while they keep searching, rather than spend a week or so training somebody, or, just give them a week or so of ramp-up time, they’re doing something wrong.

Basically, Cappelli thinks employers are just being cheap. He says this is something they learned from the downsizing of the 1980s. It was so easy to snap up laid-off workers somebody else had already trained. So then companies downsized their own training programs to save money.

Meanwhile, they’ve steadily raised the bar on job applicants -- demanding ever-more credentials and work experience -- then complain they can’t find good help.

Cappelli: This is sort of like saying, 'My pants don't fit anymore. The problem, I believe, is that the fabric is shrinking.'

Carrick: It's a clever analogy, but I think that in some regards, it misses the point.

Again, Gardner Carrick of the Manufacturing Institute.

Carrick: Nobody expects a hospital to take someone just out of high school or just out of college and train them to be a nurse or a doctor. Why is it that manufacturing are the ones that are expected to do all the training of their workers on their own?

It should be easy enough to check whether the amount of time and money companies spend training their workers has fallen. Except, no one tracks this comprehensively.

The best estimate comes from the American Society for Training and Development. It finds spending-per-employee has been essentially flat for a decade, even as the skills required by new technology in the workplace have gone up.

So let's go back to the employers we started with, the ones with job openings they can't fill for skilled workers they can't find. Darlene Miller at Permac Industries says she's committed to training. But new hires need machinist experience and advanced math, first.

Miller: We need people who can come in and be value-added the day they start.

And she's guilty of the sin Peter Cappelli talked about: holding out. She searched two years for a machinist to run a new shift at the plant -- she says it was worth the wait to avoid costly mistakes.

Elaine McDevitt in Reading, Pa., wishes she could do more to train people up.

McDevitt: Now, the marketplace is so competitive, the margins are just so tight. So maybe when we say we can’t find experienced people, it’s because we don’t have the monetary resources to put into training from scratch like we used to.

And which employees do companies provide with the most skills-enhancement? According to the training organization’s data, it’s not production workers, or customer service reps or new employees. It’s supervisors, managers and executives.

I’m Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.
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I found myself yelling at the radio and Peter Cappelli on the way home from another day at a "squeeky cleen" cnc manufacturing shop in Brooklyn, NY. "Employers are unwilling to spend a week or so training..." A week?! I would challenge Peter to train one of the highly skilled machinists in our facility in a year. I am a machinist turned plant manager and loudly second the comments of Darlene and Elaine. High schools and even trade schools are graduating people with poor math training or no work ethic. Problem solving skills are non exisistent. Schools to train in my field are at best poorly funded and equipped, in most places they don't exist.

From my perspective the fundamental problem is that our leaders in politics, education and business are completely alienated from the engineering and manufacturing disciplines. It is notable that our most profitable and successful manufacturing enterprises of the last 40 years are in computer hardware, software and technolgy. These companies were founded by and many times still run by technical types. Our car companies, steel manufacturers, railroads et al are run by business school grads and accountants. Undoubtedly they were taught by the Peter Cappelli's of this world.

Well,

I certainly can't argue that our political leadership is completely and totally clueless on issues of manufacturing and engineering. The rise of the harvard MBA has changed the face of business.

That said, the whole concept of treating people like replacable, disposable pluggable modules didn't begin with the MBA.

And yes, it takes years to become a 'real' machinist, and that was in the day when folks actually had tool boxes full of fiddly little tools, pre CADCAM, and a life time to become a real master.

The centuries old time honored apprentice/journeyman/master tradesman doesn't seem to fit in a world where our betters buttonhole us according to their investment portfolios.

but this will all change. Count on it.

Mr Cappelli totally missed the mark on this one...

"spend a week or so training somebody, or, just give them a week or so of ramp-up time, they’re doing something wrong".

It takes far longer than a week to train a skilled machinist to run a million dollar piece of equipment. More like 4 years. Skilled positions Mr Cappelli. Even the top business school people in this country can't comprehend the magnitude of this problem. People aren't going into the "trades" anymore and the skilled talent is retiring. IT'S NOT A MYTH!!! When was the last time you heard a parent say "son, you have some advanced math skills. You ought to be a machinist."? Not happening!

Shocked that he could reduce this problem to that flip comment!

Mr. Carrick needs to come up with a better analogy. Doctors are NOT ready to practice medicine straight out of school. I wish you had asked him about internships and residencies. Hospitals provide years of training to new doctors. Personally I don't want my surgeon to be 2 weeks out of medical school.

Let's see, Mr. Carrick, hospitals aren't expected to train nurses; well a Registered Nurse has a Bachelor's degree and is certified by the state. They will command a salary of $60,000 to $70,000; a nurse in ICU, more like $87,000. Looking at the same salary survey, a CNC machinist will be paid $30,000 to $36,000; a "journeyman machinist" $42,000. I think that is why so many young employees who were laid off turned to health care careers.

Just to be clear: Nurses graduating from most colleges are in no way prepared to walk into a hospital, take a position, and add "instant value". Education for Registered Nurses is a construct combining both theory and practice. Truth be told, a little short on the practice part. That is left up to hospitals to provide.
The nursing education prepares the candidate to pass a national exam and obtain state licensure after which the real training begins. Hospitals spend thousands of dollars per new grad providing the true on-the- job reality training that nursing programs only hint at. Specialty care units like ICU and ER requires months of intensive training with back-up to be safe. True expertise takes years to attain. Commonly new grads become frustrated with the chaos of the health care system and bail out in the first couple of years. Physicians spend years training with rigorous attending/resident physician oversight. The idea that medical professionals walk into hospitals, diploma in hand, ready to hit the ground running is just ludicrous.

all very interesting.

Thanks so very much for this story. I too, hear these complaints with a somewhat jaundiced ear.

I took myself out of the workforce some time back. I don't make much money, but I don't have to listen to this kind of bickering.

Let's see, we the people, (especially the self-employed) are supposed to bear all the tax burdens to train YOUR workers? Why?

I've done wet lab work, I've done very high level machining and tig welding, all by hand of course, when computers came along, I was doing that, again, coding by hand.

I remember listening to trades folks complaining that they couldn't find 'americans' that were willing to work. Then I come to find out that small crews of Latino laborers are doing the rough-in electrical work for $100 per unit, piece work. What the tradesman neglected to add to his mostly true statement was "can't find americans will to work FOR WHAT I'M WILLING TO PAY" which of-course, is poverty wages, which are fine for folks living in tarp-tent camps along a rail road right of way near the job site.

The last place on earth I would want to work would be at a place where the boss expects 'value added from day one'. Day one at the very least should be spent in orientation. Hard to add value filling out a W2./w4.

Yeah, these kind of skills are difficult to find, I have no doubts this is true. So, I expect that these folks are waiting for someone who lost their job doing this work due to the last round of tax cuts killing off even more economic demand by shutting down even more services, who they can snap up on the cheap and put them on the factory floor after giving them their timecard because they are desperate.

If you need folks, hire from inside, train your folks up the ladder, bring in youngsters to sweep floors, loose the cheap contract labor clean up crew that is probably staffed with illegals anyway, and INVEST in folks. Let them work their way up. I started building reaction vessels in the then industrialized south by sweeping the floor until the guy up in the booth over the shop floor, found someone else to sweep the floor, and trained me in on the shear. I was making custom stainless steep pipe inside of 3 weeks.

I'll give the point on math skills. Being able to read blueprints and engineering drawings and transfer those dimensions to your work was something we learned in shop class in high school. But then, a lot of us in shop class already knew that stuff because we came from households were things were built, and stuff that was bought was repaired.

Very good story. thanks.

Considering it was easier to hire skilled labor in the 1980's requires one to consider that workers in that era had access to vocational education programs in their high schools that simply do not exist today. The long-term downsizing of vocational programs in secondary education, replaced instead with a "college for all" mentality now pervasive nationwide, means students who come out of school simply do not have the skills to do high tech manufacturing the way their parents and grandparents did in previous generations.

Perhaps if we exercised a little foresight, as is done in Germany, China, and other countries, and if we funded these programs again, we would be able to turn this problem back and become competitive again.

I run a biotechnology company and this story struck a chord for me.

I have the same problem finding qualified applicants for positions in my company.

I don't have CNC lathes or mills, but I do have automated liquid handlers and other laboratory equipment that are the 'squishy' versions that the machine shops use. They perform the function that a laboratory technician can do on the bench one at a time, but in multiples of thousands at a time. They are a labor multiplier.

However, I can't hire just anyone that can punch a green button. They have to have the hands-on experience of working with the samples by hand and that experience can only come with a four year BS degree with wet lab work.

If I was to hire someone without this background I'm committing to an 18 month training cycle to make up the deficit. In a "work at will" state I can't take the risk that I'll train them on the job and then they leave for another job. That doesn't even take into account the loss I'll incur from their negative productivity during that time.

With this situation, I'll wait for a good candidate that can do the job from day one. It's just the way it is.

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