The manufacturing industry is currently at a crossroads with baby boomers retiring at a high rate and not enough younger workers coming in to replace them. Many lament the decline in manufacturing in the U.S., but the fact is that it's still a tremendously important industry. In a reversal of past trends, a significant amount of work previously done outside the country is now coming back (a process known as "reshoring").
While workers in past generations intentionally chose the profession knowing it could provide consistent opportunities and good pay, many in recent generations shy away from it, believing the work to be stereotypically dirty, low paying, and unfulfilling. Complicating the labor issue further is the current low unemployment rate: 4.3 percent nationwide, which is marginally higher in places such as California at 4.8 percent and bottoming out in Colorado at 2.3 percent. Low unemployment, combined with other factors, has resulted in a net decrease of 1,000 manufacturing jobs in Colorado in the past 10 years.
Today's manufacturing businesses are stepping up to meet these challenges through efforts to counteract negative stereotypes and develop employees who will provide the needed skills now and in the future. Three Colorado companies are using innovative training programs that help them acquire new talent, provide training and other benefits to their employees, and improve the industry's image.
Mikron Corporation Denver
As is the case with many manufacturers, Mikron Corporation Denver's processes have become more technical and complex. The company designs, builds, and tests high-speed assembly machines for other companies.
In the past, customers would come in with specifications to be followed precisely. Now, explains General Manager Mike Gunner, "It's more a set of ideas and computer models," meaning employees must be more flexible and creative in working with customers to give them the products they want. Finance and HR Director Florencia Saldias says, "They need to use problem solving and think outside the box." The need for workers to partner with customers more closely involves the ability to use soft skills to anticipate questions and understand reactions.
One strategy the company has used to adjust to this shift is a mentoring program that pairs more seasoned workers with newer ones to offer one-on-one training. Another is an apprenticeship program that trains high school students and is heavily supported by both the governor's office and the Denver Cherry Creek School District. "High school seniors work two or three afternoons per week during the school year, plus vacations and holidays if they want," says Saldias. "They're paid, and when they graduate they train for an additional three years to become full-blown mechanical technicians." Gunner says, "We pay for their community college education, so they can get an associate's degree as well as a Department of Labor apprenticeship certificate."
The program has been highly effective. "The whole organization has changed by having apprentices. Interaction and communication has increased at every level," says Gunner. "Plus the students we select are extremely bright and dedicated; they're the leaders of the future."
RK also faces a skills gap as its work has shifted to increased use of CAD and BIM design. This work requires people with AutoCAD and other software skills to design the products the company manufactures. Executive VP, COO, and co-owner Jon Kinning shared that the company has sometimes resorted to "cannibalizing" from its competition and other industries, and working with third-party recruiters across the country to bring in needed talent at all levels.
To address the issue more proactively and collaboratively, RK started an apprenticeship program in 1995. Apprentices come in two evenings per week accompanied by online self-study activities for four years. Program involvement counts toward up to 45 college credits, and participants end up eligible to test for their journeymen license.
"This may seem like a long process, but you have to think it through logically," says Kinning. "If we want those well-trained third-year apprentices, we have to put them through the first and second years. And we have to keep in mind that after about 90 days they can be productive members of a team." The company also benefits from the youthful energy of the apprentices whose average age is 24.
Kinning and his brother, who co-owns the company, continue to reward those apprentices after they become regular employees. Last year they established their minimum wage at $16 per hour, and also offer up to two raises of $1 per hour per year and a trade-specific toolkit worth around $350. They additionally provide full medical coverage, a retirement package, and a wellness program.
Kinning anticipates that RK will have over 400 apprentices in its program by September 11 when classes begin.
At Woodward, too, increased automation requires more high-skilled workers. VP of Operations Keith Korasick explains that in the past machines would be programmed to perform a certain task on many similar parts. "Now," he says, "the work is more specialized and machines need to be programmed for a certain process. Workers must be able to adjust the machines depending on which parts are being run through. So they need to understand both the manufacturing component and the robotic one."
Korasick runs a program that works with the local school system to get high school students interested in manufacturing as a career path. "Each summer, we have eight interns who work full eight-hour days for about 10 weeks," he says. "They learn and train in assembly, inspection, and other areas. As they go out into the world they become ambassadors for manufacturing as a profession."
The company also has an internship through Front Range Community College. These interns work 20 hours per week, and Woodward pays 100 percent of their tuition and books. There is no requirement for them to stay on afterward, but only two people have left since 2008. "The rest are still employed with us and are tremendous assets to the organization" says Korasick. "These folks have a great foundation for a career at Woodward because the internship provides them with broad experience within the company, immersion in the company culture, and the opportunity to meet multiple company leaders."
Korasick acknowledged that change is slow, and it's not possible to replace the experience of the baby boomer generation overnight. "But we're adapting to the changes," he says. "We really just need to stay focused on the next generation, and let them know this is a viable career, and that automation is going to enhance -- not replace -- it."
Kreg Brown is an Audit Partner at EKS&H. Contact him at 303-740-9400 or email@example.com.