The manufacturing industry knows that hiring the perfect, highly-skilled worker is wishful thinking. The labor shortage has made it increasingly difficult to find and keep workers who know how to do the job. To tackle the skills gap, you have to simplify the problem to just finding and keeping workers. They don’t need to be skilled when you hire them; you can train on the job.
If you’re ready to look at job candidates who show potential but may not have the right experience, we’ve got four ways to help you go about hiring unskilled workers:
1. Build an internal apprenticeship program
By creating an in-house apprenticeship program certified by the U.S. Department of Labor, you open a door for potential talent to walk through. Young workers or midlife workers switching industries are looking for company-sponsored programs where they can “earn and learn.” Moreover, apprenticeship programs help you reduce turnover costs, increase productivity and diversify your workforce.
- In 2016, registered apprenticeship had an 89% three-year retention rate, whereas about 70% of college grads not in an apprenticeship expected to quit before their first three years were up.
- In 2016, 91% of apprentices stayed at their company post apprenticeship.
- Apprenticeships have an average ROI (return on investment) of $1.47 for every $1 your company invests.
- Every $1 your company puts in your apprenticeship program gives a public return of about $28 in benefits.
Oberg Industries, a precision components and tooling manufacturer, has designed an Apprenticeship Training Program spanning four years that combines classroom instruction and on-the-job learning. Oberg invests $200K on each apprentice, which includes the training program itself, educational materials and workers’ pay. Is it worth the money? Donald E. Oberg, the founder of Oberg Industries, told Industry Week that “we’ve seen a triple-digit return on investment from our apprentice graduates even during difficult economic conditions."
Here’s also how Dow's apprenticeship program (a plastics, chemicals and agricultural products manufacturer) works and benefits both the apprentices and employers:
2. Create a returnship bootcamp
While “returnship” was coined by Goldman Sachs and is a trending term in the corporate finance and tech world, it’s an idea that could be just as profitable for the manufacturing industry. A returnship program is essentially a paid internship or apprenticeship for workers who have left the workforce for more than two years due to caregiving responsibilities, but this can be extended to include military service, incarceration, etc. A returnship differs from an apprenticeship because it caters to workers who’ve already worked within the industry (at least five years) and developed some relevant skills but need to be caught up on changes in practice and technology.
- In 2019, 3M moms were looking to return to work after raising a family.
- In 2019, 6K citizens were released from prison and were looking for work.
- In 2019, 310K veterans were looking for work.
Returnship programs haven't taken off in industries with labor shortages the way they have in the corporate world; they mostly exist in highly competitive job markets where applicants are fighting tooth and nail to get into the program. That said, manufacturers like you can use this same concept as a recruitment tool to attract returning workers or different workers who may have similar skillsets to what your company needs, but never thought to look into manufacturing work.
The returnship should be designed similar to the certified apprenticeship programs, but condensed into weeks/months of training instead of years because these workers will already have base-level knowledge. In terms of employee retention rate and ROI, returnships will likely create similar positive effects as apprenticeships. For a great example, check out General Motors’ Take 2 re-entry program that first targeted engineers and soon after manufacturing workers.
Here’s also how Johnson & Johnson’s Re-Ignite program works with returning STEM, manufacturing and design workers:
3. Develop public-private partnerships with the community
A natural step to find workers is to partner with organizations that represent people trying to find work. Partnerships with nonprofits, agencies, community colleges, trade & technical schools and other training institutions connect your company with growing labor pools who are looking for work (see 7 nonprofits restoring the manufacturing workforce). However, not many manufacturers are joining forces with these organizations.
- Only one in 10 manufacturers partner with the government and three in 10 partner with private education/training institutes to find workers.
- Just over ½ of those enrolled in trade schools are millennials with decades ahead of them to dedicate to a company like yours.
- From 2015 to 2020, the average trade school industry growth was .9%, and demand is expected to spike in 2020 due to the Coronavirus Recession and surge in unemployment.
- In 2017, the nonprofit workforce surpassed the manufacturing workforce for the first time in history making it in your best interest to partner with nonprofits.
AK Steel, a producer of flat-rolled carbon, stainless and electrical steel, partners with local technical skills training institutes as well as community organizations to attract talent. Here are four of the many paths they took to recruit workers:
- Partnered with Madison Adult Career Center to provide structural welding certification.
- Partnered with Henry Ford Community College to create an electrical apprenticeship program.
- Partnered with Zane State College to create an electrical maintenance program.
- Joined the Middletown, OH, Chamber Education and Career Path Task Force committee to bring awareness to manufacturing jobs.
To build similar relationships in your community, reach out to local educational institutions, government agencies and interest groups to raise awareness for manufacturing careers at your company. For more detailed examples of other manufacturers taking this approach, check out this business roundtable and take notes.
Now that you’ve decided to explore apprenticeships, returnships and public-private partnerships, how do you train these new recruits? Ahead-of-the-job training can be costly and ineffective, especially when 70% of training is forgotten after one day. To supplement classroom instruction, it’s critical to let workers learn on the job and collaborate with seasoned experts. Plus, it helps you keep production moving while training. So, what’s the best way to get new hires up to speed?
4. Invest in knowledge-sharing technology to train on the job
Millennials and Gen-Z want to take part in the technological revolution. They are looking for jobs that use novel approaches to sharing information like augmented/virtual reality, artificial intelligence or social media. Way back, the invention of the cotton gin and then the assembly line made manufacturing a leader in industrial innovation, but we lost our standing after the computer and Internet came along. Manufacturing is primed to take charge again with the onset of Industry 4.0.
By using knowledge-sharing technology, you’re not only attracting workers who would otherwise choose a “trendier” industry, you’re solving your training problems. More and more manufacturers lean on automation and knowledge-sharing technology to bridge the skills gap. Automation will eliminate the need for low skilled workers, while knowledge-sharing technology will help you continually upskill your workers so you can keep them moving up the totem pole to do jobs uniquely human. Training should never end.
- On training: the average company spent $5.1M on training last year and the average worker receives 42hrs of training per year, but 70% of training is forgotten after one day.
- On automation: while 20M or 8.5% of the world’s manufacturing workforce is projected to lose their job by 2030 because of automation and 42% of all task hours will be clocked by machine by 2022, this only means that manufacturer workers will need to retrain. There will still be a labor shortage, but for more highly-skilled worked. For example, 33% of jobs are created for trades in the U.S. that weren’t around 25 years ago.
- On knowledge sharing: large companies in the U.S. lose an average of $47M in productivity due to poor knowledge-sharing systems and 85% of workers say that knowledge-sharing is critical to speeding up production.
- “While 30 years ago, a worker was expected to master 75% of their occupation throughout their tenure, with today’s expanding technology, the average employee cannot master even half of their occupational duties within a 30-year career.” — National Institute of Metalworking Skills
Knowledge sharing technology can be as simple as using mobile device applications to manage resources, people and the flow of information. At Ario, we provide knowledge-sharing products that help you train on-the-job and continually upskill your workforce. Two ways you can train with Ario tools:
- Help experienced workers mentor greenhorns with augmented reality enhanced video calling.
- Place learning resources in the real world so workers can access courses, checklists and tasks at exact job locations.
That’s a wrap. You’ve got four ways to go about hiring unskilled workers during a labor shortage and can begin to strategize how to attract and train workers. Whether you want to build internal programs like apprenticeships/returnships or partner with external organizations to bring awareness to manufacturing jobs, the next hurdle is how to go about the training process. Knowledge-sharing technology can help you train in-house at any stage of the upskilling process. To learn more about Ario and how our products help your teams share knowledge, take a look at our product offerings.