Lack of Qualified Talent has Manufacturers Examining Everything From Pay to Perks

November 29, 2018 – Manufacturing is predicted to increase faster than the general economy from 2018–2021, with production growing 2.8 percent, according to the Manufacturers Alliance for Productivity and Innovation.

In the Southeast, where textile manufacturing once was king, several automotive and aerospace companies now dot the landscape, offering high-paying, technical jobs. But in a state like South Carolina where BMW, Volvo and Boeing continue to expand and where the unemployment rate hovers below four percent, there is a continuing challenge for the manufacturing sector to find qualified employees.

Manufacturing companies have done a good job in recent years to try to change young people’s perceptions of working in manufacturing. Today’s automated operations, robotics and clean production environments are helping to change attitudes, along with higher wages and good benefits.

But the lack of qualified labor has created a candidate-driven marketplace that is requiring manufacturing companies to examine everything from pay scales to perks.

For example, a manufacturing engineer with three to five years of experience will make an average of $80,000 to $85,000 annually, which is $10,000 more than a year and a half ago. Internal equities at most manufacturing companies are in the $75,000 range for that position, prompting some companies to consider hiring bonuses or the promise of a six-month review with the opportunity of a salary increase. In most cases that still isn’t enough.

So, how can manufacturers recruit the talent they need in such a competitive environment? Here are a few ideas:

Establish an apprenticeship program

Many of the European-based manufacturing companies that have settled in the Upstate and Charleston areas of South Carolina are establishing apprenticeship programs that are consistent with European models.

These companies go into high schools and identify juniors with an interest or propensity for a career in manufacturing. They invest in these students by paying for a two-year degree and the promise of a job when they complete their courses. Other companies are sponsoring STEM programs and robotic competitions in high schools to identify students with technical aptitudes.

Manufacturers also can identify potential employees by working cooperatively with schools such as Greenville Technical College. Greenville Tech’s Center for Manufacturing Innovation (CMI), for example, offers students two-year programs for advanced manufacturing careers and employers, the skilled workforce they need for commercial success.

Stay competitive on the salary side

OEMs are driving salaries in today’s manufacturing world. Companies in the Upstate region of South Carolina, for example, must match salary levels offered by BMW. Even companies not related to the automotive industry are having to compete against automotive wages.

One of our technical clients recently raised the salaries of its entire workforce by 25% per hour to compete with other companies in the market that were paying $20 per hour or more for the same jobs. Manufacturing companies must either raise salaries or continue to hire candidates that are not qualified.

Get creative with perks

Today’s manufacturing companies are getting creative with their workplace environments to make them more flexible and fun. Many companies have changed their work hours to 7 a.m. to 4 p.m. or 7:30 a.m. to 4:30 p.m., getting away from the traditional 8-to-5 workday to give associates more time in the evenings to enjoy with family and friends.

Some manufacturers are offering events for employee interaction during the workday to create a more fun working environment. Others have made a considerable investment in their on-site cafeterias and food service operations to give employees good meals at good prices in a nice atmosphere.

Be decisive

For us to be successful on the recruiting side, employers must be decisive and act fast when a qualified candidate is identified. If companies try to negotiate in this candidate-driven market, that person will move on.

Once a desirable candidate is tapped on the shoulder and makes the decision to pursue a new opportunity, the process can escalate quickly. We have lost six or seven placements, this year, to counter-offers from existing employers or competing offers that didn’t exist when the search began.

Work cooperatively to develop the talent pipeline

Each time BMW or Volvo expands, another 15 suppliers come into the market creating an even greater worker shortage. The technical positions that are so hard to find are being drawn out by two major car manufacturers in South Carolina and our schools are not fulfilling the needs for those technical roles.

A real crisis could be on the horizon when more Tier 1 aerospace companies move to South Carolina. These companies are going to require the same technical talent as the companies that are already here, creating more of a vacuum for technical jobs.

Knowing this, manufacturing companies should begin now to create a network of high schools, technical colleges and four-year institutions to create a talent pipeline. Companies must work together in a non-competitive way to take an active role in helping schools develop and teach the technical skills required for today’s manufacturing jobs.

By Elliot Figueroa, Manager, Manufacturing & Engineering at FGP

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