The Emerging Benchmark

Here is a striking set of numbers: According to a recent Financial Times article, the number of U.S. manufacturing job openings waiting unfilled was 98,000 at the start of 2009, but since then has risen to 230,000. Even though the number of unemployed in America has increased during that time, manufacturing employers still can’t find candidates for these positions.

If you hire within manufacturing, you probably can describe the reason for this disconnect. Namely, the skills among jobseekers fall short of the skills that are truly in demand.

The U.S. government recently responded to the problem by expanding a federal program aimed at training and developing skilled employees. However, it is difficult to see this response as promising. A federal agency can’t predict with precision what job skills will be needed, nor can it ensure that jobseekers actually choose training aligned with those needs. The government response could even aggravate the problem, as people are seduced into fruitless training who might otherwise have found the jobs in which their current skills might at least have given them a foothold.

No, only one group truly does know what job skills are in demand, and only one group can predict with confidence what skills are likely to be needed in the future. That group is the employers themselves. Indeed, in the case of many of those employers, manufacturing staff sizes have declined with more sophisticated processes, but the positions that remain have become more critical, with more advanced requirements. For all these reasons, I see it as inevitable that manufacturing employers will take ownership of the challenge of developing skilled employees.

What that ownership will mean, and what it will look like, are unknown. Some companies will work closely with trade schools. Some will develop the equivalent of trade schools internally. Still others will find and pioneer the variations on these solutions that haven’t been imagined yet. In any case, the widespread recognition of a need for committed personnel investment will change the landscape of manufacturing, because it will start to distinguish manufacturers in ways that other defining traits no longer do.

Consider technology, for example. At one time, advanced equipment and information tools distinguished leading manufacturers. That technology is no less important today, but it is accessible and widely used by manufacturers of various types and sizes. Something similar could be said about lean—the shop practicing lean in the past was dramatically more responsive and cost-efficient than the majority of shops that didn’t. Today, by contrast, many shops do lean at least modestly well.

In the age that is now upon us—the age of the thinned-out manufacturing labor force—the new competitive advantage will relate to personnel. This subject is a question mark for manufacturers, but soon it will be a benchmark. How effective is your facility at training and keeping the people who can exercise increasingly rare capabilities? Going forward, the manufacturers that stand ahead of competitors will tend to be the ones with particularly good responses to that question.