Employers say they can't find enough highly skilled workers. But other factions say that's just a convenient cop out to cover other job-related shortcomings. Can both sides be right?
It took Robert Polzin more than six months to find a new job after he was laid off in 2012. The 55-year-old machinist put in more than 60 job applications, got occasional interviews and even had a few offers before he finally got one through a temp agency that he was willing to accept – at $5 an hour less than he made before. He turned down a few that would have paid only half what he got from his last employer.
“I was making almost 20 bucks an hour,” Polzin says. “I don’t want to work for 12 bucks or 13 bucks an hour – I can’t live off that.”
|Hear more about this story on WUWM’s “Lake Effect” Aug. 6 at 10 a.m.|
For more than three decades, Polzin has worked at his trade. In his previous job, he was making brakes. “I was doing a lathe and a mill at the same time,” he says. The employer wanted more people cross-trained like him, so Polzin was asked to teach a co-worker how to use both machines.
Then work got slow, he was told. He was let go. The last time he heard, the guy he trained was running the two machines.
If there’s any consolation for Polzin, it might be that he wasn’t alone. “I know a lot of older people who are out of work and who have the skills,” he says. Employers “don’t want to hire them for some reason. Maybe they think they’re going to retire in five or six years.”
And when he hears that employers are bemoaning – and have for years – a desperate shortage of skilled workers? “I don’t believe it.”
At Monarch Corp. on Milwaukee’s far Northwest Side, president, COO and part-owner David Mitchell has trouble believing the opposite – that more skilled, high-quality workers who could work for his company even exist.
Monarch is a job shop. Its factory produces components that other companies assemble into products – giant mining shovels, power generators, large water-treatment pumps. The parts Monarch makes can weigh up to 100 tons.
The work typically starts with massive castings produced in a foundry. After they’re delivered to Monarch, welders connect huge slabs of metal while machinists drill holes through iron and steel using computer-controlled machine tools that can cost $1 million or more.
“It has to be structurally sound, but it also has to be pretty,” Mitchell says, pointing out a clean, polished weld joint on what will become the frame of a mining shovel crawler. Since he took the company’s reins in 2007, his “No. 1 constraint to growth” has been finding people who can do those jobs.
“We simply weren’t seeing the applicant level – the number of applicants and also the applicants with the skills and the qualities we needed long-term,” Mitchell says. “We probably walked away from a million and a half to 2 million dollars worth of business.”
Taking those jobs would have required adding more employees. “The welders on the street and the welders in the job market – they simply weren’t there.”
|This article appears in the August 2013 issue of Milwaukee Magazine.
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Marc Levine and Tim Sullivan.
For the better part of a decade, corporate executives and business owners have been warning of a shortage of skilled workers so severe that some call it a crisis. Despite persistently high levels of unemployment in an economy that isn’t doing much more than plodding along, employers in Wisconsin and nationwide insist they struggle to fill jobs critical to the long-term success of their businesses.
The “skills gap” has spawned lengthy reports, been the subject of countless meetings, inspired campaigns to revive technical education and even given birth to new legislation. In August 2012, Tim Sullivan, the former CEO of the mining equipment manufacturer Bucyrus Erie, produced a 126-page report that emphatically asserted the problem and sought to explain it: “Wisconsin, the U.S., and other countries are experiencing above-average unemployment; yet employers say they cannot find the skilled labor they need to fill vacant positions. This phenomenon is known as the ‘skills gap,’ and it is hurting economic competitiveness around the world.”
Yet at the same time, economists, educators and job seekers tell a contrary story: There is no skills gap – just a jobs gap. National and local reports have repeatedly failed to find hard data to support the reality employers say they live with every day. In a paper released in February, Marc Levine, a University of Wisconsin-Milwaukee professor of history, economic development and urban studies, was nothing short of scornful.
“The consensus among top economists is that the skills gap is a myth,” Levine wrote. “Although a steady stream of news articles over the past decade and a drumbeat of self-serving anecdotes from business executives have created the public perception that there is, indeed, a skills gap, there is little labor market evidence to support such claims, nationally, in Wisconsin, or in Milwaukee.”
There is, so far, little common ground.
Eric Isbister, CEO and co-owner of GenMet, a Mequon company that stamps and welds metal components, says the company waded through 337 job applications last year to find 26 people who met the qualifications. By the end of the year, six had severed ties with GenMet. “That’s the definition of the skills gap,” he says. “People can’t come in here instantly and get a job.”
The people hired and then fired – or who were never hired at all – sometimes lacked the basic technical skills GenMet needed, say Isbister and his wife, Mary Isbister, co-owner and company president. They might have been welders who didn’t read blueprints properly or who flunked the basic welding test because they didn’t take the time to see if the machine was at the proper settings.
But not always, Eric Isbister says. “It doesn’t necessarily have to be a skills gap. It could be an attitude gap. It could be a pride gap.”
Last year, a New York Times article on Isbister’s company suggested that perhaps the real problem was that its pay was too low and its culture hostile to workers who came from unionized companies. That annoys Isbister, who argues the reporter ignored the information he conveyed during their interview.
UWM’s Levine points to the Times story to bolster his argument and is far from the only skeptic. A University of Wisconsin-Madison report in May found no evidence of a skills gap. And in a Time magazine essay last year, Peter Cappelli of the University of Pennsylvania’s Wharton School also questioned the claims. Drilling down into survey results, he found that some employers who claimed they couldn’t find qualified applicants were turned down by candidates because the wages offered were too low. “That’s not a skill shortage,” Cappelli wrote, “it’s simply being unwilling to pay the going price.”
But both sides of the debate are digging in their heels. As employers cast blame for the difficulty they have finding workers, “there’s one thing that’s not ever discussed – employer practices and management strategy,” Levine says.
Meanwhile, Tim Sullivan writes off Levine and his fellow skeptics as ivory tower theorists. “You can’t look at just a small section of the economic situation and draw conclusions,” Sullivan says. “Some of the contrarians to the skills gap, I question the depth of their research. You’re talking about positions 180 degrees apart. That makes no sense.”
Or does it?
“You’re all right,” says Jeffrey Joerres, CEO of Milwaukee-based Manpower Group, the global temporary help and staffing company. The real problem, he and other like-minded observers say, is that both groups need to start listening to each other.
The state of Wisconsin spent most of the 20th century as a manufacturing star, and Milwaukee was its core. “The machine shop of the world,” some called the city. When the machine shop’s workload peaked in the 1950s and ’60s, manufacturing employed more than one-third of the state’s workers.
It also helped build a solid middle class among the children and grandchildren of immigrants. There had been layoffs in bad times or seasonal slowdowns, to be sure. But from the end of the Great Depression and World War II until the 1970s, there was a sense of relative security at work. Armed with nothing more than a high school diploma – and often, not even that was needed – people who wanted work could generally find it, at decent pay, and often with ever-improving fringe benefits.
In the last 30 years, that’s been shattered. Skyrocketing inflation in the 1970s, a deep recession in the early 1980s, lowered trade barriers in the 1990s, and increasingly sophisticated technology and automation along the way dramatically changed the face of the state’s economy and manufacturing everywhere. Companies merged and split apart, spun off and restructured. Some moved to the South or to Mexico or, eventually, overseas in search of cheaper labor. Others shed employees and began outsourcing work they had once done in-house.
And it wasn’t just in manufacturing. Even amid the widespread talk of a new “information industry” and a shift to a “service economy,” those sectors, too, became caught up in perpetual change. Millions of jobs were created, many of which had never before existed. The economy boomed in the 1990s, and with it, manufacturing enjoyed a resurgence. Yet the old security never returned.
Even as manufacturing came back, its share of the overall workforce continued to shrink. Whereas it once accounted for close to 40 percent of Wisconsin’s non-farm jobs, manufacturing now claims just more than 16 percent. And that’s still a bigger share than any other state.
In May, Reggie Newson, secretary of the Wisconsin Department of Workforce Development, told educators and manufacturers that Gov. Scott Walker’s administration is committed to bolstering the state’s manufacturing sector. Along with agriculture and mining, he said, it’s part of “the three-legged stool of Wisconsin’s economy.”
Manufacturing boosters point to the slowly warming recovery in the national economy and a modest return of jobs to the U.S. from places like China and Mexico. Amid those hopeful signs, complaints of a lack of skilled workers have grown louder and more persistent.
Those complaints culminated with Sullivan’s report. (Although officially titled The Road Ahead: Restoring Wisconsin’s Workforce Development, it soon was nicknamed the Sullivan Report.) Its warnings were familiar. Employers’ complaints that they couldn’t find skilled workers have circulated as far back as the 1980s.
Sullivan had long been the state’s most outspoken messenger on the topic. In 2005, he famously dressed down Milwaukee Area Technical College for not turning out enough welders with the skills required to build the giant mining shovels made by his company, Bucyrus Erie. Then-MATC President Darnell Cole paid a visit to the South Milwaukee factory and set up a specialized training program for the company.
But that wasn’t enough.
“We had committed to refurbish and expand our manufacturing operations here in southeastern Wisconsin, only to find out, as we were building capacity, that we didn’t have the skills, the welding skills,” Sullivan says. So about six years ago, “we had to go down to Texas. There was available labor there.”
In 2007, officials in Kilgore, Texas – where Bucyrus had a small, 40-person operation dating back to the 1980s – directed Sullivan to an available factory site. Local technical college leaders vowed to have 80 trained welders for the business in one year – and made good on the promise by 2009, when the new plant was in full swing, Sullivan says.
There are different kinds of welding, and what the generic welder might do is quite different from what the mining shovel manufacturer required, Sullivan says. Joining 8-inch-thick pieces of steel to fashion massive pieces of machinery requires specialization. “It was the most advanced welding, and it required a lot of skill.”
Sullivan and Bucyrus kept the Texas move quiet until 2011, when Sullivan revealed it in a speech at a West Bend economic development meeting, about the time he was selling the company to Caterpillar Inc.
When Walker was elected governor with a promise to add a quarter-million Wisconsin jobs in his first term, he named Sullivan a special consultant on business and workforce development, and head of the workforce and college readiness council. This was in addition to his role as head of the workforce investment council, a position he’d held since 2007.
So when the Sullivan Report came out, it had a ready ear in the Capitol. A couple of months later, in October 2012, Competitive Wisconsin – a business and labor economic development group based in Madison – followed with its own report, Be Bold 2 (a sequel to an earlier Be Bold report), underscoring Sullivan’s conclusions.
Both reports make two overlapping but subtly different points: one about the future, one about the present. Looking ahead, they forecast a struggle for manufacturing employers to recruit and keep workers who can replace a looming exodus of retiring baby boomers. And they assert that the state isn’t educating enough people to fill those vacancies.
But both reports also contend the problem is already here – that manufacturers struggle to find workers they need now.
“While the economy is improving, there aren’t new jobs available for many of our unemployed workers,” the Sullivan Report states. “This type of recovery means workers must adapt to the needs of employers in a way that they haven’t had to before. Employers need more from workers, including specific skills.”
The two reports helped drive a remarkably quick response in Madison: a rare bipartisan bill to fund $15 million in state grants for worker-training programs tailored to what employers say they need. At a factory in Oshkosh March 13, Walker signed the bill, which also established a new state-run database, slated to be in place by 2014, that is supposed to quickly and accurately match job vacancies with job seekers, in some cases using data the government already collects.
Employers are eager to see it enacted. During a daylong meeting in May with school guidance counselors and administrators at the Mequon offices of Rockwell Automation, they shared their hiring struggles.
At Paper Converting Machine Co. in Green Bay, one worker in 10 has been on the job for 40 years or more. “Over the next one, two or three years, I’m replacing 10 percent of my workforce just to be competitive with where I was,” said Bart Hardy, a vice president at the manufacturer of papermaking machines and related equipment.
Marinette Marine Corp. is riding the crest of a wave, with a series of multimillion-dollar contracts to build new warships for the U.S. Navy at its yard in Marinette. “I don’t have to worry about orders coming in,” said Steven Baue, vice president of human resources. “I have to worry about getting the workforce.”
Marinette Marine is owned by an Italian shipbuilder, Fincantieri Marine Group. A corporate sibling, ACE Marine in Green Bay, is also growing. And both companies are in an unusual location – on the shores of the Great Lakes, subject to ice and snow for three or more months a year, instead of somewhere like the Gulf of Mexico.
“My labor pool is now the continental United States – I fly in welders,” Baue said. “If I don’t figure out this shortage in the next year, Marinette Marine and ACE will no longer be there. We’ll go somewhere else.”
Marc Levine has regularly shown a contrarian streak on economic policy.
As the founding director and now a senior fellow at UWM’s Center for Economic Development, Levine published a paper in 2009 that dissed two prominent themes for the local economy: enthusiasm for promoting the region as a job-creating “Silicon Valley of water technology” and then-UWM Chancellor Carlos Santiago’s embrace of the “entrepreneurial university” as an engine for economic development. Levine found little hard evidence to support either idea and plenty of reasons to doubt their validity.
In February of this year, Levine put out his own report on the skills gap, taking the pulse of economists across the nation and looking at data close to home. What he found wasn’t a skills gap – but a jobs gap.
“The skills of the labor force did not suddenly erode between 2007 and 2009, when the unemployment rate more than doubled,” Levine wrote, “so it makes no sense to claim that high unemployment in 2009 and through today has been caused by a soaring number of ‘unqualified’ workers.”
It’s supply and demand. When something is in high demand but there’s a short supply, the price goes up. If there were a labor shortage, Levine argues, wages would be rising. Overtime would be up as well, he contends, with the existing workforce putting in longer hours to meet the demand.
Yet in Wisconsin, neither of those scenarios is happening. U.S. Bureau of Labor Statistics data show real wages (wages after accounting for inflation) have declined since 2001 by about 1 percent for all workers and 4.6 percent for production workers – a broad category of factory workers.
By contrast, in Wyoming – where a boom in the oil drilling business has led to a genuine shortage of skilled workers – wages are 25 percent higher for production workers today than in 2001 and 16.4 percent higher for workers overall. In North Dakota, also experiencing an oil boom, the wage hike has been less dramatic but still significant: 11.8 percent for all workers and 8.1 percent for production workers.
The overtime story is the same: In Wisconsin, hours worked are down 4.3 percent since 2000; in North Dakota, they’re up 4.5 percent in the same period.
Levine also sees a contradiction between the assertion that future jobs will require more complex skills and actual Wisconsin job forecasts produced by the state’s Department of Workforce Development. Those, he says, show that more than 70 percent of job openings between now and 2020 will require a high school diploma or less.
With more than 85 percent of Milwaukee adults holding a high school diploma and more than a quarter having a bachelor’s degree, they should be quite qualified to fill those openings, he argues. Jobs with lower skill levels are already often filled by people with higher qualifications than necessary. He cites federal surveys that show 25 percent of retail salespeople in Wisconsin hold college degrees (versus 11 percent in 2000) and 60 percent of parking lot attendants have some education past high school. At the same time, there are relatively few jobs forecast in the next decade in fields that have been touted as keys to the future economy, such as biomedical engineering, he says.
All that, Levine wrote, suggests the city and state “suffer from the opposite of a skills gap: an economy that generates too few quality jobs and a labor market that is characterized by the underemployment and overqualification of skilled and educated workers.”
Levine took particular aim at the long-standing reports that qualified welders are in short supply. Since 2000, the federal BLS reports employment for welders has fallen 25 percent in the state and 45 percent in the Milwaukee metro area. Meanwhile, unemployment in the trade exceeds 10 percent. The average Milwaukee welder was paid 9.1 percent less in 2011 than in 2001 – not what you’d expect with a shortage. Looking again at oil-boom states, Levine found welders’ wages up 14 percent since 2001 in North Dakota, 21.5 percent in Wyoming and 24.5 percent in Alaska.
And Levine zeroed in on the story Tim Sullivan told about expanding in Kilgore, Texas. By every measure, Levine says, the data on qualifications should have favored Milwaukee. Welders here were better educated: Only 16.6 percent did not have at least a high school diploma, while in Kilgore, the figure was nearly twice that, 30.2 percent.
When Bucyrus opened its expanded Kilgore plant, there were 635 unemployed welders in Milwaukee, 1,935 in Wisconsin, and another 3,570 in the nearest big metro areas of Minneapolis, Chicago and Detroit. Two-thirds had been out of work for less than a year, “meaning they had recently been deemed sufficiently ‘skilled’ to be employed,” Levine wrote. “It strains credulity to believe that so few of these jobless welders were qualified that had Sullivan been diligently searching and offering competitive wages he could not have found most of the welders he needed.”
What Kilgore did offer, Levine continued, was lower wages and “corporate welfare.” In Milwaukee County, 65 percent of welders earn more than $35,000 a year. In Kilgore, just 47 percent of welders make that much – though Levine points out that there is no public information on the specific wages at the Kilgore plant now owned by Caterpillar. At the bottom of the pay scale, 31 percent of welders in Kilgore earn less than $25,000; here, just 22 percent are in that pay range.
Then there are the publicly funded subsidies the company received – incentives valued at $540,000, according to a report from the Kilgore Economic Development Corp. The agency reimbursed Bucyrus $103,000 for the factory site land and another $297,000 to offset site development costs. It also pledged up to $140,000 for jobs created, at $3,500 a job for up to 40 jobs over five years. Kilgore paid up on that pledge, handing over a $140,000 check to the local plant manager in 2012.
“When employers can’t find exactly what they want when they want it,” Levine says, they “have this knee-jerk reaction and call it a skills gap.”
When Levine’s paper came out, business groups protested that he relied too much on dry data instead of living employers. “He hit a very high 30,000-foot level and tried to base it on theories, but he didn’t dig down below that,” Sullivan says. “He didn’t dig down and talk to any manufacturing associations or manufacturers specifically.”
Levine has a ready answer to that objection. “We’ve heard the voices of employers,” he says. “What I did was look at the analytical part of this that has been left out of the skills gap discussion.”
His wage calculations, though, have also been criticized. Buckley Brinkman, executive director of the Wisconsin Manufacturing Extension Partnership in Madison, a nonprofit adviser to small- and medium-sized companies, says Levine’s paper raises important issues worth examining, but comparing factory welding wages in Milwaukee with those for oil-rig welders in North Dakota “is an apples and oranges kind of comparison.”
Susan Fronk, president and CEO of MRA-The Management Association, a Pewaukee-based organization that advises 3,000 member employers in Wisconsin, Illinois, Iowa and Minnesota on human resources, personnel and training issues, says that built into the oil-field wages are factors such as covering transportation and lodging costs for itinerant workers who may have come from other states looking for work.
In its own surveys of its members, about half of whom are in manufacturing and half in other industries, MRA found that 60 percent of Wisconsin employers report hiring has become more difficult. Companies responding could offer more than one reason; more than 70 percent said they couldn’t find available candidates or people with the necessary technical skills, while 35 percent said that applicants wanted more money than they offered. Asked how they were dealing with the problem, half the
employers surveyed said they were filling jobs with existing staff who would be trained in the needed skills, and 30 percent said they were raising pay.
At Monarch Corp., David Mitchell says he’s already offering competitive pay and rejects the “conspiracy theory that manufacturers are trying to depress wages.” Contends Mitchell: “We are paying what we need to pay to get the quality of workers in to satisfy our customers,” though he won’t disclose the number. “I could offer $10 an hour more – they’re not out there.”
College is to blame, say manufacturers. Or at least the push to steer all high school grads to college. Both the Sullivan Report and Be Bold 2 suggest that most job openings require a two-year degree or less.
“In the 1980s, this country shifted from the American Dream being a good-paying job to being a four-year degree from a university,” Sullivan says. “This was the beginning of the predicament that not only Wisconsin but the entire country finds itself in now. We need to shift that back.”
Susan Fronk at MRA agrees. “Families are saying, ‘You’re not going to have the job that I had – you’re going to go to college,’” she says. “People don’t realize how much economic success they can have” in a skilled trade in manufacturing – without having to pay the cost of college tuition.
Buckley Brinkman of the Manufacturing Extension Partnership grew up in Madison, graduated from UW-Madison in 1982 with a degree in marketing and management, left the state to get an MBA at Harvard, and spent nearly 30 years consulting for manufacturing companies and other businesses. He came back two years ago to run the Manufacturing Extension.
Brinkman used to believe you needed a college degree to succeed. “Since coming back to the state,” he says, “I’ve done a 180 on that.”
More than two-thirds of jobs in the state don’t require a four-year degree, and one in four college graduates in Wisconsin earn $28,000 or less. “All of a sudden, there’s a disconnect between that and the idea that if you get a degree, you have automatic success,” Brinkman says.
So businesses are working to convey a counter-message to schools: Don’t assume everyone should get a bachelor’s degree. Instead, reinvest in technical education.
Port Washington High School is following that advice. Since 2010, school officials have been working closely with local businesses, says Superintendent Michael Weber, to promote more science, technology, engineering and math education (or “STEM” for short).
Eric Burke, who graduated from the high school 27 years ago, says tech ed was once a mainstay there, with about a half-dozen teachers in the department. That fell to just two as tech-ed enrollment plummeted over the last decade. In 2011, Burke came back to his alma mater as its principal just as the project to reinvigorate tech ed was getting rolling. “It excited me because we were talking about how to help our kids succeed after high school,” he says.
One of the new tech ed faculty members is Ryan Volke, who started at Port Washington in 2012 after 10 years in the Mequon district. When he graduated from Brown Deer High School in the mid-1990s, “if you didn’t go to college, it was like you did something wrong,” says Volke, 35. “To be so one-sided is a failure, as a community and as a school.”
Port has begun acquiring newer (often donated) equipment – welding machines, CNC (computer numerical control) machines, computer-aided design software and hardware for drafting, even a 3-D printer that turns a drawing into a piece of plastic. The school is installing them in “labs,” and no longer is it called “shop.”
“I’m teaching more classes now with physics, calculus and engineering than I ever have before,” Volke says. “Tech ed has really evolved into engineering and problem-solving.”
Volke’s colleague, William Kunst, spent two years as a sheet metal worker before getting an education degree and teaching tech ed. Parents, he acknowledges, have had to warm up to considering trades as an option for their children.
“I’m getting calls from companies every couple of weeks” with openings to fill, Kunst says. “Kids are getting placed very quickly. It’s changing the tune around here.”
Fred Schnook grew up in West Allis as the seemingly certain prosperity of blue-collar work was in twilight. In seventh grade in the mid-1970s, he and his schoolmates were already being sorted – girls to home economics, boys to shop. In shop, they were sorted further: guys who did as they were told got steered to high school drafting classes – groomed for college. The troublemakers – Schnook counts himself in that group – were directed toward blue-collar trades.
Still in high school, Schnook went to work for a company that made castings in 1979. Laid off just as he got his diploma the next year, he entered an apprenticeship program at another employer. Two years later, the program was canceled, and Schnook was shown the door. After 11 months of job hunting, he was hired as a welder at A.O. Smith. Just four years later, he was one of 2,000 people laid off.
It was time for a career change. Schnook counseled job hunters, starting with his own A.O. Smith co-workers, then went on to run programs for job seekers and dislocated workers, with stints in Ashland, Wis., (where he served a term as mayor) and in Oklahoma. Along the way, he got a bachelor’s degree and a master’s degree. Now he’s working on his doctorate.
People tell him his job losses led to him advancing his education, but he doesn’t see it that way. He’d have been happy to stay in a factory job, if he could have supported his family.
“The way I was trained set up a whole lot of people for failure,” Schnook says. “There was a ‘college track’ and a ‘work track’ – and both of them were successful tracks. But that’s not there anymore.”
Today, Schnook is Southeast Area Director for the Labor Education and Training Center, an offshoot of the AFL-CIO – a federation of labor unions representing both public- and private-sector workers. The training center partners with the Milwaukee Area Workforce Investment Board in the HIRE Center, located on National Avenue, one place dislocated workers turn for help.
“If there are companies out there looking for skilled workers, please call me,” Schnook says. “I’ve got an army of highly skilled, unemployed workers looking for jobs.”
Until earlier this summer, machinist Robert Polzin was one of them. During his job search, he noticed several things that didn’t match the rhetoric coming from employers. For one thing, he’d seen openings for manual machine operators rather than the CNC operators. “The kids, they’ve been brought up with CNCs. They don’t even know how to run manuals,” he says.
And if technology is so critical, Esalaí Clark hasn’t seen the evidence. Clark, 40, came to Milwaukee from Detroit nearly two years ago. An information technology project manager with an MBA in information systems, she expected little difficulty finding work. IT, she says, isn’t supposed to be one of the industries losing jobs.
“I’ve had no shortage of interviews,” Clark continues, but so far, not one has led to a job. She’s found employers demanding such specific experience that, even when she can demonstrate she’s done the elements of a task, they pass her over if she hasn’t filled that exact role in the past.
Placement agencies – the primary vehicle for getting IT jobs – have told her she should take some of her experience off her resume to avoid looking overqualified. When talk turns to pay and she suggests “market rate” – easily in the high five or even low six figures – she is told, “I don’t think you should be expecting market rate for anything because you’ve been out of work for a year and a half.”
For Reginald Harrison, 38, computers were the ticket out of the city neighborhood where he grew up. Earning an associate degree and later a bachelor’s in electronic engineering, Harrison spent 15 years in various IT jobs, including nearly five at GE Healthcare.
Since being let go in 2011, he’s tried to develop his own computer-repair business while looking for jobs and being offered less than half the $60,000 a year he used to make. At one point, he took a job at a cast metal foundry. With his tech background, he got to run the plant’s automatic control system but left because he feared for his safety around molten metal.
On TV one night, Harrison saw a story about a company having so much trouble hiring it decided to publicize its job fair on the local news. He went, along with 400 other people, and asked about an engineering position. He was given a short briefing and sent home to fill out an online application. He was later notified they were no longer looking to fill that position. “There’s not really a shortage,” he says “They’re choosy in what they have to pick from.”
Even employers who say they have trouble filling positions admit that may be part of the explanation: They’re being more careful about who they hire, and more technology on the job is a given.
But they still encounter experienced job applicants who aren’t at ease with computers. “You have a generation of people who work in manufacturing but who haven’t kept their skills, not just current, but they haven’t upgraded their skills,” says GenMet’s Mary Isbister. “It’s very difficult if they didn’t work in an environment that uses technology. All of our equipment has some kind of computer interface.”
It’s more than technology, though. A number of employers say they pay more attention to intangible qualities in job applicants and take their time hiring. And while critics of the skills-gap thesis charge that employers seem less willing to train internally, the employers themselves say that’s not true.
Monarch’s Mitchell, for example, says his company has increased training, pairing newer workers with more experienced ones. And Monarch and GenMet work with GPS Education Partners, which matches businesses with struggling high school students to provide both classroom education and on-the-job training that can lead to full-time employment after graduation.
A significant problem, however, is trouble with so-called soft skills – showing up, putting in a full day’s work, getting along with co-workers, practicing teamwork.
Schnook, of the labor and education center, is skeptical of a technical skills shortage. But the employers his organization works with – most of them small firms – are “saying they have a soft skills gap,” Schnook says. “They’re saying, ‘Give me the right worker – one who shows up with a good attitude, one who shows up on time,’ and they’ll train them in the technical skills.”
This all combines into an element of truth for the skills-gap skeptics, says Manpower CEO Jeffrey Joerres – employers are getting fussier: “With a tepid demand, you can wait three more months to find the perfect employee because it pays off.”
Consider Tailored Label Products, a company that prints machinery labels. “We’ve really focused on the culture and the aptitude of the person – are they a cultural fit, and do they have the aptitude to learn,” says Chief Operating Officer Jeff Kerlin. The company emphasizes flexibility, training on three different machines on the plant floor (if that’s where they work) or training in three different roles.
“It’s made them more valuable, and it’s made our life a whole lot more flexible,” he says. For graphic arts and printing, Tailored Label now looks first to new tech school printing graduates, reasoning they have the starting skills and can be trained in specific processes. The company has also developed jobs closer to entry level, so new workers learn by assisting senior employees.
“Employers have to do a better job of creating positions where someone who is green can step in quickly and do a better job,” Kerlin says.
Don Sykes, president and CEO of the Milwaukee Area Workforce Investment Board, says equipping clients with skills is important – but so is getting them jobs. Yet factories that once employed thousands now employ hundreds and produce just as much. “Manufacturing is reducing the number of workers and elevating the technical skills that are needed,” Sykes says.
His organization doesn’t ignore manufacturing, but he sees greater opportunities in larger growth sectors like health care, and tourism and hospitality, which have more entry-level jobs and room to grow. “We can put more people to work and help them move up the ladder.”
With operations around the world, Joerres’ perch as the CEO of Manpower provides a distinct perspective. And he sees at least some truth on both sides of the skills-gap argument.
“There clearly is a skills gap and talent shortage on specific positions and in specific locations,” Joerres says. “Then there are skills and talent gaps globally, no matter who you are talking to – because there are hot skills.”
Once upon a time, he says, a new technology – say, some kind of engineering software – would roll out slowly and work its way across the world over months or even years. “Now, it’s just ‘boom,’ and it’s done.”
Yet in some ways, senior managers may exaggerate their hiring difficulties. What reaches their attention first, Joerres says, is the trouble their companies have finding the right people. “What doesn’t bubble up to them is the 25 people they hired yesterday with no trouble.”
As businesses become more focused on one thing – efficiency – the threads that once linked people, work, employers, communities and schools into a complex web have frayed and snapped. Communities, he says, need to make a fundamental commitment to and investment in real lifelong learning. Apprenticeships and internships need to be stronger – or in some cases, simply revived. Companies and educators need to better understand each other. And unions should have a role in advocating for better training and adding value in the workplace.
But for Joerres, one particular value is needed more than ever.
“Pragmatism beats all,” he says, “and we’re losing it as a country. Both sides are scuttling it.” And that’s the case whether those sides are divided along political party lines, by public sector and private sector, or by labor and management.
“There are countries, states, counties that want to beat us,” he says. “We have the ability to solve this.”