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DeLong: Expert says employment future ‘complex’ for manufacturers

By Brian E. Clark
For WisBusiness.com

Author David DeLong calls the lack of skilled workers facing manufacturers at a time of high joblessness one of the country’s biggest paradoxes.

And he says it’s only going to get worse as the economy recovers. More baby boomers will be retiring at the same time companies are seeking to innovate and grow.

“It’s frustrating for employers and especially frustrating for people who are out of work,” said DeLong, co-author of “The Executive Guide to High-Impact Talent Management.”

The problem, he said, is that today’s industrial jobs are sophisticated and require specialized training for increasingly automated manufacturing processes.

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“There is a huge skill gap and small companies can only afford to do so much training,” said DeLong, who will speak May 17 at the Manufacturing Matters! conference in Milwaukee. His talk will focus on the strategies to attract, retain and develop skilled and motivated employees.

DeLong said no generation of executives has ever faced such a complex set of workforce challenges, in part because the pipeline of workers interested into going manufacturing is declining.

“We are already looking at serious shortages now in the areas of welders and industrial engineers,” he said. “There examples in other areas of the economy, too, with shortages of nurse managers, software engineers, insurance actuaries and general practitioners in medicine.’

Attracting young people into industry can be a hard sell, he acknowledged, because so many manufacturing jobs were lost during the current recession. Though employers are hiring again, the impression remains that manufacturing jobs aren’t seen as a good long-term career option.

“In reality, there are lots of opportunities for higher skilled jobs,” he said.

Unfortunately, he said technical schools have been underfunded. And that trend is continuing as states deal with budget deficits.

Earlier this month, Milwaukee Area Technical College president Michael Burke deplored an anticipated 30 percent cut in state aid as part of Gov. Scott Walker's proposed state budget, telling a business group it comes at a time when enrollment has increased 16 percent and community interest is high in the tech school programs.

“In this country, vocational education has really gotten short shrift in recent decades and we’ve been way underselling the potential, the need and the opportunities presented for terrific careers for people who get the right training,” DeLong said.

“Many industries suffer because they aren’t considered sexy or appealing to younger talent, so executives will need to work more aggressively to recruit people into these industries. This is an increasingly difficult and important challenge.”

DeLong said smarter manufacturers already are away of this. DeLong said he interviewed one Wisconsin manufacturer for his book that has three of its top executives on technical college boards so they can influence the curriculum at those schools and better prepare students for the kinds of jobs the company needs to fill.

“That is the kind of step that executives are going to have to take. They are going to have to be much more proactive around internships and making sure that potential talent for their workforce is getting the training it needs.”

DeLong said one company went so far as to set up its own welding school to meet its needs.

To combat the loss of talent, DeLong said executives will have to think creatively and work to keep boomers on the job by offering them flexible schedules.

“For the first time in history, we are retiring the first generation of professionals and managers who have deep knowledge of much more complex manufacturing processes and technologies,” he said. “We are losing people who have critical knowledge about manufacturing’s legacy and the ways operations are done that are harder to transfer.”

Because of worries about supporting themselves in retirement, as well as the desire to stay active, DeLong said many older workers might want to stay on the job part-time.

“The reality is if you are in your 60s today in the U.S., your life expectancy is to live well into your 80s,” he said. “People are realizing they have a much longer retirement runway ahead of them and they need to plan accordingly. That is changing the succession plans of a lot of companies. Suddenly, it isn’t so clear when Joe or Mary is going to leave.”

The key is to find ways to get those employees with critical knowledge to transfer what they know to those below them before they retire for good, he said. The downside, however, is that the next generation of leaders and top contributors may see their own opportunities reduced at their present companies and look for new jobs.

DeLong said one manufacturer he profiled in his book “confessed to me that they have a machine operator who was 69, was back working part-time, and his departure was going to immediately affect almost half a million dollars in revenues of this company.

“As I asked more questions, it became clear to the executive that he needed to get on the process of starting to transfer this veteran operators’ knowledge because it would affect the firm’s revenue base.”

DeLong said small manufacturers are typically so busy that they don’t quantify the cost of an employee leaving or even pay much attention to retirements.

But he said the costs to companies can be high.

“It’s a real dilemma, we need to pay more attention to this and get more aware of the true cost of this to a business,” he said.

“That means the role of managing talent is not something that can be delegated to the human resources department, which is what has been done historically,” he said. “Managing talent will be a core competency for any leader in any organization in the years ahead.”

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