Uptime: Don’t Believe Everything You Read: The Skills Shortage Is Very Real

By Bob Williamson, Contributing Editor

“I just got through reading a report that said something about the ‘worries of a skills gap crisis are overblown.’ From where I sit and from the people I talk to in manufacturing, this report can’t be right. We have a skills gap in our plants now and it’s probably only going to get worse. What’s going on? Help me understand this skills gap crisis, please. It is real?”

Entitled “Skills Gap in U.S. Manufacturing,” that report by a major U.S. consulting group dumbfounded me, especially the line that “the findings underscore the idea that worries of a skills gap crisis are overblown.”¹ Quite frankly, I don’t believe a word of it. What really worries me is the visibility this latest report may be getting. Business leaders, educators and politicians might actually believe it! America is liable to breathe a sigh of relief knowing that the skills gap crisis is overblown, and return to business as usual: Back off the training, back off the reliability improvement programs, don’t worry about the aging maintenance and technician workforce, etc., etc., etc. What a critical mistake for our nation’s future that would be!

Stating that the worries of a skills gap are overblown misses the mark entirely. It’s NOT about the gross numbers of highly skilled manufacturing workers needed that concerns me. It’s more about the skills gaps in certain critical job roles that concerns me—and it should concern every manufacturing, facility, warehousing, transportation, utility and mining company in North America. The worries of a skills gap should be as real as the equipment in your plant, the transport trucking fleets on our roads, the power-generation and distribution systems we rely on and the heavy equipment that builds roads and mines ore.

The most critical (and largely unknown) skills crisis
Comparatively, the number of highly skilled people working in maintenance and reliability (M&R) job roles is very small—considerably smaller than the groups that operate the equipment. So when you look at the sheer number of M&R workers, the current and future skills shortages and the job openings compared with numbers of production workers in manufacturing, the M&R group is very small.

What many “researchers” often fail to understand is the significant impact ONE highly skilled maintenance person has on productivity, on revenue generation, when those skill sets are NOT available to perform that critical PM properly or to troubleshoot the problem completely or make the repairs properly. Only ONE person with the critical skills and knowledge missing in the workplace can bring an entire operation to a screeching halt or keep it from performing as intended. This is our world: the frequently misunderstood world of maintenance and reliability.

I’ve been studying and experiencing the “skills gaps” and “skills deficits” and “skills shortages,” as well as the precipitous decline of vocational-technical education and training in the U.S. for decades. I’ve seen the results of an untrained semi-skilled workforce operating and maintaining sophisticated (not necessarily “high-tech”) equipment and facilities, as have many of our readers. The aging workforce has not slowed at all. In fact, the workforce is aging-out faster as a product of the “Baby Boom” generational demographics. My take on all this is as follows: The skills gap crisis is REAL—particularly in highly skilled maintenance and reliability job roles. Read on…

Ammunition to defuse erroneous report
Back to the consulting group report that got me fired up: How in the world did the authors come to their conclusions? The report stated that “the U.S. is short some 80,000 to 100,000 highly skilled manufacturing workers” representing “less than 1% of the nation’s 11.5 million manufacturing workers and less than 8% of the nation’s 1.4 million highly skilled workers.” What was that based on?

The authors further stated that they surveyed “more than 100 U.S.-based manufacturing executives at companies with annual sales of $1 billion or greater.” (Just for your information, annual sales of $1 billion or more represents LARGE manufacturers.)

Small is BIG. . .
Take a look at something other than LARGE manufacturers.

• The Federal government defines small- to medium-size (non-farm) enterprises as having less than 500 employees and $7 million to $25 million in annual revenues.²
• The National Association of Manufacturers (NAM) and the Manufacturing Institute define small man-ufacturers as having 500 or fewer employees and medium manufacturers as having 2500 or fewer employees.

The most important fact regarding manufacturing jobs. . . 

• The Manufacturing Institute reports that 94% of all U.S. manufacturers employ less than 100 people. In other words, 94% of all U.S. manufacturers are considered SMALL businesses.³
• Some 296,000 small to medium manufacturers (SMM) generate 40% of the total value of U.S. production⁴ with more than 65% of the total U.S. manufacturing workforce.⁵
• Ninety-five percent (95%) of all manufacturing exporters are SMMs. And almost 100% of SMM are privately owned.⁶

Given the above statistics, we can come up with some calculations of our own: In reality, the study suggesting that the skills gap crisis is overblown surveyed less than four-hundredths of a percent (0.04%) of the total 335,315 U.S. manufacturers⁷ with annual sales of more than $1 billion dollars. This is a very small group that most likely doesn’t look a thing like most of our small- to medium-size manufacturing firms.

The report went on to state: “Using data and job-vacancy rates” researchers “looked at localities where wage growth has exceeded inflation by at least 3 percentage points annually for five years.” It then stated that “Wage growth is a widely accepted indicator of skills shortages in other sectors, such as energy; it reveals where employers have been forced to bid up pay to attract hard-to-find workers.” (My emphasis.)

Let’s be clear about some important details. . .
First, manufacturing is not as unfettered as the “energy” industry. Consider the employment trends in North Dakota (Bakken trend) and in western Pennsylvania and eastern Ohio (Marcellus formation) where wages have escalated significantly to attract skilled workers in a shrunken labor puddle (gone is the labor pool). This type of “wage growth” with hiring incentives, premium benefits and annual signing bonuses rarely occurs in manufacturing because of labor agreements, job classification systems and approved pay rates.

Second, our skills gap crisis is real. “Manufacturing workers” include those who work in management, staff, administration, front-line leadership, engineering techs, production operators, maintenance and others. Typically, small- to medium-size manufacturers have approximately 55% or less of their total workforce employed as “highly skilled” maintenance and technical workers. This means on average that 94% of our nation’s manufacturers have a total of five highly skilled maintenance workers at most. And, according to BLS data, the average age of these “highly skilled” manufacturing workers is 56 years old.

As my prior columns have pointed out, in countless plants and facilities, our workforce skills and knowledge haven’t kept pace with technology growth. Many employers have skimped on equipment- and technology-specific training and qualification for their M&R workforce as a whole. If it weren’t for the powerful motivation and interest in figuring things out by the individuals in our M&R workforce, those workers might feel helpless.

We know the story. . .
It’s a fact that’s been proven many times over: One “highly-skilled” person was out sick. Someone else filled in and shut the plant down. . . or caused a major problem that limited production on a critical line. . . or caused that very critical piece of equipment to break down. . . or created a major environmental incident, or caused a serious accident or injury. All it takes is the shortage of ONE highly skilled maintainer (mechanic, electrician, instrument/controls tech) to cause major problems.

Spread the word
Despite what you may have read elsewhere, there IS a skills gap in today’s workplace—and it’s a big one. What’s more, it’s going to get worse before it gets worse, regardless of what high-level studies report. Highly skilled maintenance and reliability job roles are demanding and the labor puddle is all but dried up. All it takes is ONE skills gap, one time, to shut a plant down.

Please let us know how the “skills gap crisis” is affecting you, your employer and your community. MT

References

1. October 15, 2012 (Source withheld but you can look it up if you wish)

2. Bureau of Labor Statistics

3. Manufacturing Institute

4.Manufacturing Institute, National Association of Manufacturers

5.Bureau of Labor Statistics,
Dec. 2012

6. Manufacturing Institute, National Association of Manufacturers

7. Bureau of Labor Statistics

Robert Williamson (Bob), CMRP, CPMM, and member of the Institute of Asset Management, is in his fourth decade of focusing on the “people side” of world-class maintenance and reliability in plants and facilities across North America. Email: RobertMW2@cs.com.

FYI: Bob will present a full-day Workshop at MARTS 2013 entitled “Putting All The Pieces Together For 100% Reliability.” Reserve your seat now. For more details and/or to register, go to www.martsconference.com.