The American economy is roaring back to life. In many parts of the country, the recession feels like ancient history, as manufacturing rates soar and middle market businesses become increasingly competitive.
But in the midst of this economic comeback, American businesses have hit a snag: They might be hiring, but they can’t find enough workers to fill vacant positions. The labor landscape has changed dramatically since the recession, with fewer and fewer unskilled entry-level positions and an increasing number of jobs requiring high-level technical training. Companies that need skilled workers can’t get them; unskilled workers who need jobs can’t get them. Behold: the skills gap.
Although the problem is present throughout the American economy, middle market companies, especially manufacturers, are feeling the worst of the pinch. According to a GE survey, about half of middle market manufacturers report a surplus of unfilled positions—positions for which they are simply unable to hire due to a lack of qualified applicants. Many of these companies are creating (or expanding) internal training programs, but this requires time, energy, and money, a less than ideal solution. Some companies collaborate with educational institutions on skills certification programs, while others hire from temp agencies. An overwhelming majority of these companies agree that the demand for skilled labor is higher now than in the past, but few are able to satisfy this demand within their own company. And one in five middle market manufacturers have seen the skills gap negatively affect their profits—by a startling average of 9 percent over the last five years.
Spend time talking to middle market companies, and you’ll hear a familiar refrain: Employers need workers with education—not a four-year college degree, but practical, hands-on training in their chosen field.
“American students need more encouragement to learn manufacturing skills,” says Chris Buch, a sales manager for Omega Plastics, a Detroit-based middle market company. “They need encouragement from higher education institutions telling them to look into manufacturing—there’s a home there for just about anybody.”
Buch believes that the era of the universal four-year degree is over but that many young people are clinging to the notion that every single American must attend college.
“The United States hasn’t embraced the possibilities of skills training,” he says—a major problem when half of employers cannot find workers skilled enough to fill vacant positions.
Companies like Omega thrive on lean, flexible innovation; they’d rather not spend time and money training their workers to learn basic skills they should already know. But what’s the solution to America’s undertrained workforce? Many policymakers have suggested a renewed focus on vocational training and technical schools. At GE and Politico’s recent “Jobs of the Future” discussion, Sens. Ron Johnson and Richard Blumenthal agreed that we must switch our focus away from the four-year degree in order to train the next generation of American workers.
“We need to tell our young people: Don’t just go to college,” said Johnson, a conservative Republican from Wisconsin. “You might not need a four-year degree. Vocational training and technical schools are a fine way to realize your potential.”
Blumenthal, a liberal Democrat from Connecticut, concurred completely.
“To have a strong workforce of the future,” he said, “we must focus on the skills needed in the United States by the next decade. We need to fuel an innovative economy.” But an innovative economy requires an innovative education system, one that focuses on practical knowledge and real-world expertise. According to Blumenthal, “the workforce must be trained and educated in the appropriate skills. It’s unnecessary and unrealistic to expect all young people to attend a four-year college.”
Those specific skills vary from company to company, of course. Some businesses need workers who can produce delicate fine china, others employees who can engineer a smooth-riding lawnmower. One manufacturer might require expertise in advanced lighting systems, another in programming robots. No school can train everyone in everything, but every worker can be taught the basic skills vital to all manufacturing jobs. Manufacturing in America is changing. And if our businesses are going to remain competitive, our education system must step up the pace.