Manufacturers Make A New Move

Manufacturers Make A New Move

19/04/2019 Jon Chang Category: Blog
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School kids in Minnesota are hopping on the "Not So Heavy Metal" tour bus. Not to watch their favorite bands in concert, but to see what it would be like to pursue a career in manufacturing.

For Minnesota-based Alexandria Industries, the initiative isn't just a lighthearted attempt to connect with a young audience. It's a response to a serious problem plaguing the entire manufacturing industry – a severe shortage of workers in rural areas.

Alexandria Industries has a 550-strong workforce and supplies components to companies in the medical, automotive and defense industries. Its manufacturing facility, located 2 hours away from St. Paul and Minneapolis, is currently short of at least 50 workers. And it's hardly the exception.

Manufacturers across the U.S. are facing the same difficulty of finding skilled and unskilled workers. Positions in their factories tend to remain unfilled for months at a stretch. And it's a trend that's likely to continue.

A 2015 study by the Manufacturing Institute estimates that a whopping 2 million skilled jobs may have no takers by 2025. About a third of the companies surveyed in the study have already turned down new orders thanks to manpower problems.

These numbers may seem counter-intuitive at first, given how automation, robotics and offshoring have reduced employment opportunities in manufacturing. But the fact is that the economy is making a sustained recovery, many baby boomers are retiring, and there simply aren't enough skilled workers to fill all open positions.

Out-of-the-box recruiting efforts:

To address their manpower shortages, manufacturers are getting creative with their recruitment strategies. Alexandria Industries offers free healthcare for workers and their families. In neighboring Wisconsin, Sheboygan-based Wigwam Mills has introduced a ‘referral' program, rewarding employees with cash bonuses for bringing in new workers who stay for at least 2 months.

A lot of effort is going into crafting a work environment that encourages young recruits to stick around. Companies are revamping their cafeterias, installing pool tables, and introducing Silicon Valley-esque buses with onboard Wi-Fi for long-distance commutes.

To encourage workers to move to rural areas for manufacturing jobs, companies as well as governments are offering a variety of financial incentives. Colorado has introduced a Jump Start program that waives income taxes for people relocating to rural areas for 4 years. Kansas has also identified 77 rural opportunity zones; relocating to any of these entitles workers to 5-year state income tax waivers and help with student loan repayment up to $15,000. Similarly, Vermont is offering to pay people up to $10,000 for relocating there while working remotely for out-of-state employers.

Industry experts believe that young workers are beginning to see the advantages of going rural. Compared to metropolitan areas, rural locations offer shorter commutes, larger open spaces, and much more affordable housing. All of these are long-term benefits that recent graduates have started to recognize.

Training with a twist:

Manufacturing companies are also pulling out all the stops to close any gaps in training that may be adding to their workforce shortages. For starters, they're addressing the problem at its source, by partnering with schools and colleges to make sure they're in sync with industry developments.

The "Not So Heavy Metal" tour is one example, through which middle and high school students see how modern manufacturing is the polar opposite of dark, dirty and dangerous. Similarly, Tennessee's Campbell County is taking an approach to training that is both high-tech and hands-on, by using virtual reality to introduce students to welding.

Many companies are investing in workers who lack prior experience in the industry. It's no longer unusual for them to hire youngsters without college degrees or manufacturing knowledge, and then train them in both technical and leadership aspects. With the right work environment and support, such candidates are likely to remain with their employers until they retire.

Some companies based in rural areas are also hiring and training former prisoners. Others are looking at veterans as a potential pool of recruits. As veterans are generally willing to relocate to remote areas with employment opportunities, manufacturing companies and non-profits are setting up training and networking programs for people leaving the military.

Crafting a fresh brand image:

On paper it may be a workforce shortage, but the underlying issue for the manufacturing industry is a brand problem. The industry needs a new and attractive image, and while it isn't simple, it's anything but impossible. The city of Milpitas has already proven itself to be a shining example of what focused investment in manufacturing can do.

Milpitas is Silicon Valley's fastest growing city. In 2016, it broke into the top 20 for generating patents in California. Just last year, it was ranked as the 5th best city in the U.S. for STEM workers. These feathers in Milpitas' cap come from the city's long love affair with manufacturing. It hosted Ford for nearly 3 decades, is now home to the likes of Flex, Cisco, View Dynamic Glass, Nanometrics and KLA-Tencor, and is set to welcome companies like Apple, Advanced Energy and SF motors into its innovative new tech campuses.

Companies love Milpitas because of its proximity to leading academic institutions, its highly skilled, educated and creative workforce, and its culture of forward-thinking manufacturing. For workers, the city's high quality of life is a major draw.

As Milpitas strides into a new age of innovation, other regions in the country can follow in its footsteps. Because to fulfill the needs of the manufacturing industry, one must also support the aspirations of its workforce.

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