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Risk Insider: Stacie Graham

The Looming Manufacturing Skills Shortfall Part 1: How Apprentice Programs Can Help

By: | April 2, 2018 • 2 min read
Stacie Graham is SVP and General Manager of National Insurance Casualty & Middle Market – Central Division for Liberty Mutual Insurance. She leads underwriting and service teams for large and midsize accounts. You can reach her at [email protected]

2018 is looking good for American manufacturers. Opportunities for organic growth – especially in international markets – are sprouting out of the convergence of a few key factors, including tax reform, a lean toward deregulation, advances in industrial technology, and an improving economy.

But a persistent industry-wide talent shortage and skills gap continue to stall that growth. According to a 2017 report by Deloitte and The Manufacturing Institute, the U.S. manufacturing industry could be short by about two million workers between 2015 and 2025.

Like many other industries, manufacturers will soon see some of their most experienced employees leave the workforce in droves as they retire. And there just isn’t enough new skilled talent in the pipeline to fill the gap. A recent survey by the National Association of Manufacturers identified attracting and maintaining a quality workforce as a top challenge.

A big part of the problem is that most Americans simply don’t see manufacturing as a viable career option.

The 2017 Deloitte survey revealed that fewer than five in 10 survey respondents believe manufacturing offers an interesting, rewarding, clean, safe, stable, or secure environment. Many think the rise of automation will make factory jobs obsolete sooner rather than later. Or they see manufacturing jobs as too dangerous or too repetitive.

Fewer than five in 10 survey respondents believe manufacturing offers an interesting, rewarding, clean, safe, stable, or secure environment. Many think the rise of automation will make factory jobs obsolete sooner rather than later.

More advanced machinery and technical work compounds the challenge; even potential job candidates who are interested in manufacturing may not have the right skills.  Manufacturers ultimately have two options to address the skilled talent shortfall. Apprenticeships offer one solution. Co-bots offer another.

Manufacturers that invest in apprenticeship programs targeting younger applicants can instill the necessary skills to a pool of talent early in their careers. Successful programs can help build loyalty and improve the industry’s image through word-of-mouth, building the talent pipeline for years to come.

Manufacturers that invest in apprenticeship programs targeting younger applicants can instill the necessary skills to a pool of talent early in their careers.

The model has a proven track record. Germany adopted an apprenticeship model in the mid-2000s, and subsequently saw a decrease in the youth unemployment rate from a high of 15.9 percent in 2005 to 6.6 percent in 2017. By comparison, the U.S. youth unemployment rate reached 10.1 percent in 2017.

Siemens USA is tapping into that pool. They enroll local high school graduates in apprenticeships at their Charlotte, N.C. factory, providing hands-on training and paying for an associate degree in a science or engineering-related field. They often hire the trainees directly once they finish the program, so once apprentices finish the program in about 3.5 years, they are debt-free and have secured highly skilled full-time jobs.

In addition to building their own pool of potential hires, Siemens is also helping to debunk the notion that manufacturing doesn’t offer a solid career path. This is something every U.S. manufacturer should be looking to emulate.

Developing those programs and reaping the benefits, however, will take time. The next installment of this series will explore a more immediate answer: co-bots. &

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The R&I Editorial Team can be reached at [email protected]