By Gene Russell, President and CEO of Manex Consulting

Just in from the National Association of Manufacturers:  

“Overall, the pace of manufacturing job openings has trended higher, consistent with the tight labor market seen in other data. While the generation of new jobs is nearly always welcome news, the gap between the number of manufacturing workers and available manufacturing jobs—often a result of the fact that there simply are not enough qualified applicants to fill them—is actually a serious problem for manufacturers. Indeed, the inability to attract and retain talent was actually cited as manufacturers’ top concern in the latest NAM survey. Moving forward, this is not expected to change over the coming months.

Net hiring among manufacturers remains encouraging, even with some pullbacks in activity over the past few months. There were 346,000 hires in the sector in April, down from 353,000 in March. Hiring eased a bit for both durable (down from 211,000 to 209,000) and nondurable (down from 142,000 to 137,000) goods manufacturers, but the numbers have still trended in the right direction across the past 12 months or so. Along those lines, manufacturers hired 311,000 workers one year ago. At the same time, total separations—including layoffs, quits and retirements—declined from 342,000 to 333,000. As a result, net hiring (or hires minus separations) edged up from 11,000 in March to 13,000 in April. More importantly, it was the 12th consecutive monthly increase in manufacturing net hiring, averaging 18,833 over that time frame.

Meanwhile, job openings for nonfarm payroll businesses rose to a new all-time high, jumping from 6,633,000 in March to 6,698,000 in April. According to the latest Job Openings and Labor Turnover Survey, there were more job postings in April in the information, mining and logging, leisure and hospitality, professional and business services and trade, transportation and utilities sectors. In addition, net hiring among nonfarm payroll firms increased from 164,000 in March to 170,000 in April.” 

Specifically, we see from recent unemployment data:

• Job openings: Jumped from 6.1 million to 6.6 million – this is a record high
• Quit rate: 3 million people quit their jobs in March, boosting the quit rate to 2.3%. This is the highest quit rate since 2001. Quit rate is even higher in the private sector at 2.5%.
• Unemployed: There is only 1 unemployed person for every job opening – at the height of the recession, there were 6.7 unemployed per job opening.
• Hires: Stayed relatively steady. (5.4 million people were hired in March, compared to 5.5 million people the previous month).

What do we recommend?

• Recruit early and often. Build relationships with universities, community colleges and high schools. Create intern programs for engineers and technicians, CNC operators, etc. Participate in a Manufacturing Day open house or connect directly with schools to tour your plant during Manufacturing Day (or week). For more information about Manufacturing Day, visit mfgday.com. For information about community college programs and connections email me at grussell@manexconsulting.com.
• Build an in-house referral program with your long-time and star employees. This is a two for one – you will gain 1.) Job Candidates and 2.) Consistent Culture.
• Train deeply using OPM (other people’s money). The State of California has one of the best money resources for training deeply and often. It’s called Employment Training program (ETP) and Manex is a long-time contractor.  Details can be found at https://manexconsulting.com/etp-funded-training-services/  or https://etp.ca.gov/.  Most of our clients use some amount of ETP to offset training costs. One of our most popular programs leading to enhanced retention and productivity is Leadership Training, and the other one is Communication Training. Lean, VSM, Kaizen, Food Safety, Business Planning and Strategy are all still very important but enhancing your workforce with better leadership and communication training seems to pay big dividends for the employees and owners.
• Automate. Automation will not only assist you in your production and workforce issues but will allow you to compete more effectively. Without technology your business will die. Period. You must have automation, and you must have data and lots of it to make decisions in the future. Robots, cobots, part and pallet tracking via the internet of things (IoT) are just some of the tools that you should be using to enhance and expand your workforce.

• • Cobots – lighter, cheaper, more nimble and safe for humans to work around without cages. They can offer the following:
    • Precision Palletizing
    • Cobot-Assisted Process Operations
      • Furniture and Equipment
      • Automotive Manufacturing
      • Molding
    • Cobot Pick and Place Operations
      • Pharmaceuticals and Chemicals
      • Automotive Manufacturing
      • Science and Research
      • Automate Virtually Anything (any step)
  • Industrial Grade Robots*
    • Welding – Laser, MIG, Resistance
    • Material Handling
    • Robotic Assembly
    • Collaborative System Integration
    • Robotic Dispensing
    • Vision
      *More expensive than cobots but bigger, stronger, faster, and offer these benefits.

“Today multiple technology advances are converging. This new wave, referred to as “Industry 4.0,” is driven by an explosion in the volume of available data, developments in analytics and machine learning, new forms of human-machine interaction (such as touch interfaces and augmented-reality systems), and the ability to transmit digital instructions to the physical world.7 Such complementary technologies can be transformative when applied in industrial settings. They can run smart, cost-efficient, and automated plants that produce large volumes. Conversely, they can also underpin customer-centric plants that turn out highly customized products—or even low-capex “factory-in-a-box” operations for rapid response to remote or niche markets. As data, connectivity, and smart machines merge the digital and physical worlds, technology is creating avenues for U.S. manufacturers to improve their productivity, agility, and competitiveness.

New design tools can improve speed to market, creating rapid prototypes and simulations to validate processes before build-out. Internet of things sensors can combine with analytics and advanced robots to run flexible, autonomous factory operations. Digital threads can connect firms with suppliers and customers, improving coordination and turning data-driven insights into new revenue.”  Making it in America, November 2017 McKinsey and Company