It’s a good time for industrial job seekers. Not only is overall employment strong, but a scarcity of skilled talent has put many job seekers at an advantage, relative to the past.
The health of the manufacturing economy and jobs growth is best told by the numbers. According to the U.S. Bureau of Labor Statistics, the total nonfarm payroll employment rose by over 200,000 jobs in August and the unemployment rate stood “unchanged” at 3.9%. And manufacturing employment for the year is “up by 254,000, with more than three-fourths of the gain in the durable goods component.”
The macroeconomic climate for manufacturers (which will drive jobs trends in the months and quarters to come) looks as healthy as the jobs market. According to the Institute for Supply Management, the August PMI (manufacturing index) rose to its highest level since May of 2004, as “orders, production and employment all picked up, offering a positive sign for the economy even as trade tensions weigh on the outlook,” quotes Bloomberg News. Moreover, “the report shows factories remained solid in the third quarter and adds to signals that the nearly decade-old expansion will hold up well in the second half of 2018.”
This news may sound like music to the ears of all parties – manufacturer and worker alike. But at the plant level, manufacturers now struggle to find qualified workers with the requisite skills. Based on our own research, we see three different strategies that industrial firms have taken to address the challenge of finding enough qualified workers.
First, manufacturers are changing their approach and resetting expectations. The New York State Times Herald-Record notes that, “local manufacturers say they’re being more open-minded about candidates, and recent research points to a national trend.” In one case, “Some companies are offering treatment to hang onto veteran employees who fail drug tests. That’s because employers can’t guarantee new applicants won’t fail drug tests.” In another case, the article notes that advertisements for workers require less experience and lower educational credentials.
The second strategy that manufacturers have adopted to manage through the jobs shortage involves automation. Packaging World recently noted the case of Cox Container, a blow-molding firm. The organization “operates several blow-molding machines, 24 hours a day, in its 73,000 sq.ft. manufacturing facility in a variety of production types spanning high-volume, low mix through low-volume, high mix.”
The organization, which has “experienced difficulty hiring and retaining quality, skilled workers,” has found an approach which matches automation through robotics with “redeployment” of operators “to higher-quality jobs within the plant.” The robotics approach works in tandem with an individual worker, pairing machine and human. In total, based on all three daily shifts, the firm redeployed three employees to additional areas without replacing
the original line jobs.
The third strategy involves nothing more than “slogging through” by relying on existing employees either working existing shifts, adding overtime or quoting longer-lead times while increasing backlog. Blue collar temporary workers are not necessarily an option for these organizations, even if the economics make sense. A recent Conference Board report observes both lower supply availability in blue-collar roles and higher wage pressure for temporary workers in these professions.
While the manufacturing jobs market will not be strong forever, today it remains one of the largest constraints to fulfilling orders and overall growth for many employers. Longer-term, firms will no doubt benefit by fostering partnerships with local vocational schools and trade/training groups—in certain cases, even unions—to increase qualified “supply” for skill industrial labor (beyond robots, that is). But the short-term prescription calls for creativity and compromise to keep production lines running.