GROWING JOBS IN THE US BY FILLING THE SKILLED LABOR FUNNEL
March 2, 2017
HELP WANTED: THE COMING SHORTAGE OF SKILLED WORKERS
January 16, 2017
3 EASY WAYS TO CLOSE THE SKILLS GAP IN MANUFACTURING - Part 2 - On The Job Training and Workforce Development
May 18, 2017
3 EASY WAYS TO CLOSE THE SKILLS GAP IN MANUFACTURING - Part 1 - Reinventing the Modern Apprenticeship
April 20, 2017
I have yet to meet a manufacturer, large or small, who doesn't complain about the skills gap and the inability to find hirable production workers. They all wring their hands over the problem. Too often, all an employer wants to do is post a job on Craigslist for someone with 5+ years of experience and sit back and wait for the resumes to flow in. They think that developing skills and competencies in their workers is someone else's responsibility. Unfortunately - as many employers have experienced - that approach is doomed to fail in today's challenging hiring market.
I'm happy to report that it is a fixable problem but only if employers are willing to roll up their sleeves and actually work to fix it.
Most manufacturers in the US are small to medium sized businesses. According to the National Association of Manufacturers, of the 252,000 US manufacturers only 1.5% of them have more than 500 employees. Your typical manufacturer in the US is approximately 43 people. They probably hire 4-5 people/year in a normal year. Employers won't solve this issue by complaining, hand wringing, or dismissing today's younger generation as lazy and entitled. They have to change their mindset, accept the challenge in front of them and say "training my workforce is my responsibility". As Ed Harris, playing NASA Flight Director Gene Kranz, said in the movie Apollo 13, as people are arguing about what caused the current situation, "let's work the problem, people".
3 Easy Ways - A Blueprint for Success
In speaking with dozens and dozens of employers who are successfully addressing the skills gap, I've found there are 3 common areas that are vital to their success.
Reinventing and embracing modern apprenticeships
Committing to on the job training and employee skill building
Investing in feeder programs like internships
If you take the time to look, you will find incredible examples of all 3 across the USA. From Batesville IN to Bozeman MT we've been able to find inspiring stories from entities large and small - including employers but also social advocacy agencies and public-private partnerships. In fact, there are so many success stories out there we will have to make this a multi-part blog. We'll start by covering #1 - reinventing and embracing modern apprenticeships.
Below are 3 inspiring examples of innovative programs that are building the future of US apprenticeship from the ground up: (i) The German American Chamber of Commerce; (ii) Manufacturers Association of Central New York (MACNY); (iii) Goodwill of Southern California.
But first, a brief review of apprenticeship programs in general.
Apprenticeships have a long (and somewhat checkered) history dating back more than 1500 years. According to Wikipedia:
The system of apprenticeship first developed in the later Middle Ages and came to be supervised by craft guilds and town governments. A master craftsman was entitled to employ young people as an inexpensive form of labour in exchange for providing food, lodging and formal training in the craft.
Early European colonists brought the long history of apprenticeship from Europe to the new world; Benjamin Franklin being a well known example of a successful apprentice. The 19th century's industrial revolution and the subsequent early 20th century's labor reform efforts produced changes in what had long been indentured servitude, where apprentices were legally bound to a master. The Depression gave way to important federal legislation including efforts from 1934-1937 that created a Federal Committee on Apprenticeships, approved state-based Apprenticeship offices, and culminated in the 1937 National Apprenticeship Act.
Today there are more than 21,000 federally registered programs with over 500,000 participants, thanks in part to a focused effort by the federal and state governments the last few years, according to the US Dept. of Labor. However, many programs have fossilized over the last 20-30 years leading to negative perceptions by some of today's employers, educators, parents and students. While fossilizing in the US, they have continued to succeed overseas - specifically in Germany and Switzerland where apprenticeships have been an accepted and celebrated part of the culture since the Middle Ages, as well as Australia and the United Kingdom who have re-invented historically trade-related apprenticeships to now include a wide range of white-collar roles.
Despite this negative perception, the last several years have seen a renewed focus on apprenticeships and rethinking the historical model. Some of the traditional challenges for trainees include:
takes a long time - typical apprenticeships require 4 years (8000 hours) to achieve 'journeyman' status in many fields
requires time spent outside the workplace - also known as "related technical instruction" or RTI, federally registered programs typically require 144 hours/year of outside instruction often from an accredited academic institution
Likewise, challenges for employers include:
onerous to set up a program initially especially for small or mid size employers (e.g., creating curriculum, reporting and admin requirements; curricula offered at community colleges is often out of date)
expensive to operate for smaller employers
concerns from employers that skilled trainees will leave once they complete their training
For the trainee, working full time for 4 years and trying to go to classes at night or on weekends is incredibly challenging - especially in areas where one might be driving 45 mins - 1 hour each way to reach a community college. For the employer, with such a huge number of small manufacturers in the US it can be an overwhelming hassle to attempt to set up a new program on their own. But there's good news. Without much effort, one can find incredible success stories, in both small towns and major metro areas, where innovative employers and other stakeholders are rethinking the modern apprenticeship to overcome these challenges. Here are 3 inspiring success stories from the field.
The German American Chamber of Commerce
Germany's widely successful apprenticeship programs have many unique factors associated with them including massive government financial support and an aligned primary/secondary education system that supports and embraces vocational careers. While we don't have these attributes nationally here at home, there is a vital element that we do have: a growing number of European companies who have manufacturing operations in the US along with senior leaders who trained under the German or Swiss model (and who refuse to accept the skills gap without trying to do something about it!). And while most of these companies plan to grow their US operations, almost 70% of them struggle to find employees with adequate skills to fuel that growth (based on the Chamber's surveys).
Originally propelled by a handful of manufacturers with ties to Germany in the Chicago area, the German American Chamber of Commerce-Midwest launched an innovative new apprenticeship program called ICATT: Industry Consortium of Advanced Technical Training in 2016. Mario Kratsch came to the US from Germany, where he had experience coordinating German apprenticeship programs, to guide this effort. Kratsch told me how employers were struggling to find talent like they were used to in Europe and posed a simple question: why couldn't they develop a program that followed the structures and standards of the German system but that was tuned to local needs? Instead of simply trying to poach each others' best production workers, a cluster of local companies helped launch this program with the German American Chamber playing the role of Program Administrator - a role that is now in favor with state/federal agencies allowing an outside entity to work on behalf of numerous employers who want to start a program.
Companies like Wittenstein North America, a maker of precision linear motion gears, have enthusiastically embraced this modern, collaborative apprenticeship program. Peter Reihle, Wittenstein's US President, truly believes this program can be a game changer for the participating companies. However, Kratsch emphasized 2 important factors that employers and trainees must come to grips with:
This isn't a job training program - it's the 1st step on a career path in manufacturing.
Apprenticeship programs like ICATT are not short term fixes - they don't pay dividends for several years; employers MUST take the long view.
The ICATT program is an 'earn while you learn" model in that students are placed within a company and begin work full time under the supervision of an experienced production mentor. However, during the course of the year trainees take a semester off and go to a community college full-time instead of having to juggle work+school together. More importantly, the program pays the trainees a stipend while they are in school so they can continue to meet their personal financial requirements. The Chamber also takes the lead on high school engagement and recruiting (holding workshops and career fairs), employment pre-screening (including an online application process), and all reporting requirements (state and federal).
While just getting started, they hope to have more than 50 trainees enrolled by the end of this year. Trainees have the chance to graduate the program with significant work experience, zero student debt, a 2 year associate's degree and a job waiting for them. They initially focused on Production Maintenance and Machinist which have nearly universal demand. ICATT hopes to add programs in Logistics, Automotive and Mechatronics in coming months. The need is so great and the approach so promising that they have also expanded it to other Chamber chapters in the US - namely their Southern US chapter based in Atlanta, GA.
Manufacturers Association of Central New York (MACNY)
Based in Syracuse, NY MACNY is a trade association representing 330 businesses and allied groups covering 26 counties in the upstate area. Their story begins in a familiar way - member companies coming together and grousing about the difficulties in finding skilled workers. Historically, apprenticeships were popular many years ago with the various trade unions in the state as well as large manufacturers. However, with such a large number of small/mid sized firms in the Empire State like the rest of the country, apprenticeships peaked in popularity around the same time the NY Mets last won the World Series (1986)! Further, the state also imposes some additional administrative challenges in creating new apprenticeship programs.
The manufacturers in central NY were desperate for skilled workers in the following areas: Machinist; Tool and Die Maker; Electrical Technician; Production Maintenance; Welding. MACNY has developed and is now piloting a modern approach to apprenticeship with 15 initial companies and 3 skill tracks. Instead of the traditional 'time-based' approach (ie., you log 144 hours/year in a classroom), MACNY has developed a competency-based approach. Trainees that demonstrate competency with specific parts of the curriculum (which could be based on prior education or work experience) move on to the next set of skills. In this way they can short the time to completion for trainees and employers. While the related technical instruction is still delivered traditionally with 5 local community colleges, MACNY was able to get a state budget appropriation to cover most of the costs of the outside classwork. Since many of the participant companies are small in size, MACNY also acts as the Program Administrator - designing the curriculum and competency tests, filling out all the paperwork, tracking progress of trainees, etc.
Martha Ponge, who runs the MACNY program, told me that while they are presently in pilot-mode, they have already gotten interest from potential partners outside the central NY region. She sees no reason why they can't expand this program statewide and even provide the template for the program to others in other states. Perhaps the success and good karma of this program will even rub off on the NY Mets in the near future!
Goodwill of Southern California
You know Goodwill for its eponymous used goods collection and retail store fronts. However, did you know that its one of the largest job training entities in the US? Divided into regional chapters, Goodwill of Southern California is the 4th largest chapter in the US. It provides a wide variety of services to underserved and unemployed community members. Through its US Dept. of Labor sponsored Career Services centers they serve over 100,000 job seekers in the region each year with comprehensive career and life skills services.
Built on previous workforce development training efforts in the region, Goodwill helped launch the California Advanced Manufacturing Apprenticeship Collaborative (CAMAC) last year. Hearing feedback from local employers, and recognizing that CA is the #1 state in the US for manufacturing employment, Goodwill worked in partnership with other entities to create the CAMAC program. What I heard from Tracy DiFilippis, the Program Director at Goodwill, sounded eerily similar to what I heard from MACNY and the German American Chamber: how can we get more workers trained and do it in a way that overcomes the traditional challenges for trainees and small to mid size manufacturers?
Like our other two examples, Goodwill will act as a virtual Program Administrator on behalf of manufacturers. CAMAC, with its program partners, will work with employers to:
Recruit, train, and retain entry level to highly skilled workers.
Design an apprenticeship program to align with employers' specific needs.
Facilitate partnerships with local community colleges, K–12 school districts, and adult education programs.
Train supervisors and managers to successfully mentor apprentices.
Connect employers with over $1 billion in State and Federal resources
Another innovative aspect of the Goodwill program (which we'll cover more in Part 2) is using online content for the bulk of the related instruction. This not only keeps costs down but also makes it much easier for trainees to meet their outside classroom instructional requirements. And similar to our other examples, it's a competency-based model with ample state/federal funding available so that employers don't need to cover the costs of the classroom instruction - whether it's online or at a local community college with whom they partner.
Concluding with Common Characteristics
After spending months researching the skills gap and interviewing successful leaders like I describe above there are a few patterns that have emerged.
First, these problems are absolutely solvable and in fact ARE being solved all over the country albeit at small, local scale. But they won't solve themselves - employers have to take responsibility for training workers and not assume someone else will do it for them.
Next, employers have to be patient - none of the programs above are designed to deliver a trained worker in the next month or quarter. While they are designed to accelerate the pace compared to traditional apprenticeship programs, the time scale is still measured in years not months.
Finally, all the successful employers I've spoken with shared a single - and what I would argue THE most important - key success factor: committed leadership at the top of the company who recognize that to succeed in this day and age they can't simply keep doing the same things they've always done. Leaders of manufacturers and other stakeholders which whom I've met like the ones above stand out from many of their peers in that they aren't satisfied with how things are and have the courage to try something new despite the risks, because they truly believe in the potential upside - a trait shared by all innovative leaders I've ever encountered. As my good friend Bruce Reyes-Chow likes to say, "it's just that easy...and it's just that hard".