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Gearing Up: Manufacturing Talent Gap

Northeast Wisconsin employers find creative approaches to attract and train the next generation of manufacturing workers

Story by Rick Berg

January 2018

It came as a shock to no one that northeast Wisconsin manufacturers responding to a recent survey said they face a critical shortage of skilled employees. They’ve been reporting that scenario for at least eight years now in the Northeast Wisconsin Manufacturing Alliance Manufacturing Vitality Index survey.

The biggest difference heading into 2018 is that nearly 9 out of 10 companies (88 percent) say they will have trouble finding talent in 2018 – up from 80 percent a year ago and up from just 29 percent in 2011, the first year of the survey. The percentage has climbed every year since then.

Some may have been surprised the percentage of companies having trouble finding talent was that low in 2011. Hobart-based EMT International CEO Paul Rauscher and 11 other manufacturing leaders saw that talent shortage coming over a decade ago, in 2006, when they founded the Northeast Wisconsin Manufacturing Alliance. At the time, Rauscher and his colleagues foresaw the looming talent gap that would be driven largely by the retirement of the aging workforce and by the shortage of young people who saw manufacturing as a viable employment option.

“We have to be able to tell our story and improve our image,” Rauscher said at the time.

The Manufacturing Alliance’s mission from the beginning has been to tell that story, largely through partnerships with technical colleges and school districts to re-educate students and parents to improve the image of manufacturing as a career.

Those efforts appear to be paying off on some levels. Jim Golembeski, executive director of the Bay Area Workforce Development Board, noted that area technical colleges now produce four times as many welding graduates as they did 10 years ago and three  times as many machinists.

“We are doing a pretty good job of refilling the pipeline,” Golembeski said.

Still, the staffing challenges remain. One of the surprising results reported in the 2018 Vitality Index was that the “most difficult to fill” occupation for manufacturers was general labor. That’s a function of the shrinking labor pool overall, said Mark Kaiser, CEO of Ashwaubenon-based Lindquist Machine.

“We’re basically at full employment right now, so even filling the most basic jobs has become challenging,” Kaiser said. “With the Baby Boomers retiring, we’re seeing a very large exodus from the workforce – unlike anything we’ve seen before. Combine that with the fact that the state of Wisconsin is not growing population-wise and you can see the extent of the challenge. I think you’re going to see more of the kinds of things we’ve been doing here – collaborating to do workforce development. We’re doing a better job of that now than we have in the past, but we need to continue to improve.”

Getting proactive about finding talent

Companies are finding proactive ways to fill the skills gap. Lindquist Machine, for example, reaches into the high schools to find potential future employees. After high school graduation, they are hired by Lindquist to work part time while they pursue a manufacturing-related degree at a technical college or four-year college – paid for by Lindquist, with the expectation that they will work fulltime for Lindquist after college graduation.

“We’ve made an investment in reaching back further in the education system to identify and develop talent for the future,” said Kaiser. “A lot of other companies are already doing things like that and I think you’re going to continue to see more of that in the future.”

Multiple northeast Wisconsin companies such as KI in Bellevue; LDI Industries of Manitowoc; Tweet/Garot, Belmark and Robison Metal of De Pere; and Kohler Co. are taking advantage of established youth apprenticeship programs – some of which are organized through area technical colleges or chambers of commerce.

One leading youth apprenticeship program is through Lakeshore Technical College, which offers apprenticeships for industrial manufacturing technicians, machinists and industrial electricians, among others. Lakeshore’s manufacturing partners include Ariens Company in Brillion, Curt G. Joa Inc. in Sheboygan Falls, LDI Industries and Manitowoc Tool & Machining.

Alison Chatman, youth apprenticeship manager at Lakeshore, said the college’s manufacturing partners are typically looking to be proactive in locating and developing their future workforce. In the Lakeshore program, students begin working part time at a participating company while they finish their high school education and take related courses at the technical college.

The program requires 450 or more hours of work at the participating company.  After high school graduation, the students may be offered fulltime employment at the participating company or another employer. Chatman said roughly 86 percent of youth apprenticeship students end up employed in their occupational training area.

The cost of the educational component of the program is covered by a grant from the Wisconsin Department of Workforce Development. Most years, Lakeshore has 30 to 40 students enrolled in the program. The employers pay only the cost of the part-time wages for the students.

Tempered optimism

The rhetorical good news/bad news scenario facing manufacturers is that the manufacturing economy is doing well and companies are expecting it to do even better – constrained only by their ability to attract enough workers to fuel the continued growth and meet production capacity needs. 

Mike Kawleski, public affairs manager at Green Bay-based Georgia-Pacific and chair of the Manufacturing Alliance’s communications task force, said that challenge is reflected in the survey’s finding that 74 percent of companies plan to modernize their plants during 2018, while only 26 percent plan to expand their facilities.

“The reality is that a lot of companies don’t have the workforce bandwidth to expand, so they are modernizing their facilities to increase efficiency and productivity and thus reduce their workforce needs, but also making their plants more attractive for the workers they are trying to attract.”

Kaiser said that continuing plant modernization has already served the manufacturing sector in northeast Wisconsin well in terms of companies’ ability to compete on a global stage characterized by advanced manufacturing.

“Manufacturers here have invested in technology improvements and workforce development and so those investments have put us in a position to compete very favorably,” Kaiser said. “I think that’s part of what made Wisconsin so attractive to Foxconn. I think they were impressed by the entrenched manufacturing workforce we have here. Manufacturing is in our DNA, as someone said. They were also impressed by the technology investments we’ve made, because that is so crucial to them in terms of looking at their supply chain. Foxconn is going to be a huge opportunity and have a wide impact on the supply base in Wisconsin.”

The workforce challenge must be attacked on multiple levels, Kaiser said. Individual companies need to be creative in identifying and developing talent. Collaborative efforts like the Northeast Wisconsin Manufacturing Alliance – along with the technical colleges, workforce development boards and school districts – also need to continue developing programs to attract potential talent to the manufacturing sector and then train those workers in the skills they need to succeed.

Finally, he said, statewide efforts provide additional assistance to help meet the challenge. The state Department of Workforce Development’s Youth Apprenticeship Program grants offer communities some financial resources to develop new young talent. The state’s Wisconsin Fast Forward program fills another gap by retraining incumbent workers on the higher-level skills manufacturing now demands. And the state’s proposed $7 million marketing campaign to attract workers to the Badger State would help offset the existing population and demographic challenges faced by Wisconsin manufacturers.

“This would be the first time the State of Wisconsin has made a significant investment, committed real dollars, to market and brand the state as a place to work,” Kaiser said. “Look what Iowa and Michigan and Minnesota have done with similar programs.”

Kawleski said the tempered optimism identified in the region’s 2018 Manufacturing Index survey is easy to understand.

“Short-term, the challenge is going to be tough, because we probably should have begun filling the talent pipeline 20 years ago instead of 11 years ago when the alliance was started,” Kawleski said. “We recognized the problem back then and decided to do something about it. It would certainly be much worse if we hadn’t taken that step at that time. Also, it’s not just a training problem – it’s a demographic problem. We’re in a population trough and everyone is looking for workers.

“Long term, we have some great opportunities to grow because we’ve been talking about manufacturing as a high-tech, high-skill and high-pay occupation, and we need to make sure we continue to tell that story,” Kawleski added. “That’s going to change the narrative for manufacturing.”

Similarly, it’s “all of the above” as far as Kaiser is concerned.

“The future is really bright and we’ve positioned ourselves well, but we have to continue to do all those things we’ve been talking about.” Kaiser said. “It’s going to be a huge challenge and that’s the only way we’re going to be able to deal with this crisis that’s coming. And it is coming.”

Rick Berg is a freelance writer and editor based in Green Bay.