The price of vacancy in the high-tech manufacturing industry is staggering, and while companies recognize this is a problem, the true cost has become such a part of the status quo that it is often overlooked.
For example, due to factors ranging from overtime and excessive turnover to recurring unplanned downtime, one manufacturer in the Midwest calculated that vacancies in one of their departments cost them more than $6 million per year. Before investigating further, most of the executives were only considering the premium cost of the overtime in this department, which was a “modest” five-figure sum.
A significant hidden cost is lost opportunity and plateauing growth. In April 2018, U.S. manufacturers reported that though demand for goods is robust, an insufficient labor pool is one factor causing them to miss out on potential sales (Manufacturing.net 2018).
Adding to the current wave of boomer retirements is the increasingly tight labor market. The most recent statistics from DoL show a 4% U.S. unemployment rate as of February 2019. It’s now an employee’s market, where job-seekers have numerous options to choose from (Bureau of Labor Statistics 2019).
Automation is certainly a solution that many manufacturers are turning to, but who will maintain these automated systems?
A long-term workforce development strategy to recruit, train, and retain employees is no longer optional. There is no one-size-fits-all solution, but there are organizations and programs chipping away at the problem. Companies must become much more attractive and present themselves in a way that they provide mid- to long-term career pathways instead of just job openings.
An apprenticeship program delivers exactly that. The first step for career seekers on their path, and a way to create the talent that manufacturers need. Darragh Staunton, President of BBS Automation Chicago, has found apprenticeships to be effective and in his words, necessary “to protect the manufacturing industry.”
“If we don't have apprenticeships, the industry will die,” notes Staunton. “The industry will stay where it is today, and we will struggle to be competitive.” A former apprentice himself, Staunton believes that apprenticeship programs are essential to helping manufacturers solve staffing and training challenges.
The Structure of a Successful Apprenticeship Program
An outdated apprenticeship structure in which the first few months are spent on menial tasks to “pay your dues” is simply not effective in attracting the bright young people the industry needs.
Apprentices want guided, hands-on learning. The 2018 Training Benchmarks survey by the ASE Training Managers Council found that young automotive technicians age 18-24 prefer to receive training through practical, hands-on, instructor-led training, and via a mentor (ASE Training Managers Council 2018).
The German Dual Education System for apprenticeships is gaining considerable attention in the United States with its structured approach to training well-rounded and highly-skilled technicians. The philosophy of this time-tested system is to train apprentices both in the classroom and on the job, on a broad base of skills which are applicable to multiple employers and not just one specific job.
For high-tech manufacturers, core competencies are agreed upon by companies across multiple industries, and each employer has the chance to customize these competencies to their needs. Through comprehensive exams, apprentices prove they have gained the skills necessary to succeed.
According to the German American Chambers of Commerce, over 85 U.S. companies in twelve states have apprenticeship programs certified to these German standards, and over 600 apprentices have been trained by the programs. According to Arnd Herwig, Vice President Development at Brose North America, which participates in Michigan's MAT2 program, the certification ensures a standard skill set world-wide for its technicians and designers, in addition to the usual benefits of apprenticeships. Locally-based companies without global operations appreciate the time-tested content and structure of the apprenticeship as well as the quality control aspect of the exams.
Rigorous Standards Ensure Results
Apprenticeships that combine rigorous academic learning and practical training can accelerate the learning curve. The relevance of the theory becomes clear, helping the apprentice retain what they have learned. Having the theory to back up the practical skills helps the apprentice to apply their knowledge to new situations, and enables the complex troubleshooting so often needed in advanced manufacturing.
One manufacturer in southern Illinois says, “Our apprentice is only in his second year but has the capabilities of an A-level maintenance technician. It would take someone off the street two to three years to reach that level. The work/college interaction has really accelerated his learning process.”
Apprenticeship Programs Pay Dividends through Retention
Nationwide research confirms that apprenticeship programs are mutually beneficial for participants and sponsor companies. A 2016 study from the Economics & Statistics Administration, an agency within the U.S. Department of Commerce, noted that 91% of apprentices find employment through their program (Economics & Statistics Administration 2016). The study also reported that all companies they surveyed said apprenticeships gave them a competitive advantage and improved their overall performance.
In fact, once manufacturers look at the true costs of unfilled jobs, they realize the investment in an apprenticeship program can have an incredible, long-term return on investment including a highly trained, best-of-class and loyal team which provides them a sustainable pipeline of talent and positions them for growth.
For more information on how apprenticeships may fit into your corporate strategy, contact Virginia Rounds at 312-494-2163 or email@example.com, or contact IMEC at firstname.lastname@example.org or call 888-806-4632.
Reference list entries (in alphabetical order)
- ASE Training Managers Council. "ATMC Training Benchmark Survey 2018." ATMC Training Benchmark Survey 2018, January 1, 2018, 38-50.
- Bureau of Labor Statistics. "Bureau of Labor Stati-stics Data." U.S. Bureau of Labor Statistics. May 4, 2018. Accessed May 23, 2018. https://data.bls.gov/timeseries/LNS14000000.
- "Economics & Statistics Administration." STEM Jobs: 2017 Update | Economics & Statistics Administration. November 16, 2016. Accessed May 23, 2018. http://www.esa.doc.gov/reports/benefits-and-costs-apprenticeships-business-perspective.
- "Pace of U.S. Factory Growth Slows Again in April." Manufacturing.net. May 01, 2018. Accessed May 23, 2018. https://www.manufacturing.net/news/2018/05/pace-us-factory-growth-slows-again-april-0.