As baby boomers exit the workforce, worsening the shortage of qualified labor, service centers must formalize their approach to finding the sharpest candidates.
[ Editor's note:
This is the first of a two-part series on recruiting the next generation of employee in the service center industry. See Part 2 on training and retaining workers in MCN's June issue. ]
With unemployment still hovering above 6.5 percent, filling openings would seem to be a snap for human resource professionals at U.S. service centers. But whether searching for a qualified applicant to run a slitter in the warehouse or man the phones in the sales office, the task is surprisingly difficult for today's hiring managers.
The manufacturing sector, including the warehousing and processing segment of the service center industry, is facing a major shortage of qualified workers. As the massive number of baby boomers hit retirement age, that number is only going to grow.
"Roughly 76 million baby boomers will retire over the next 15-20 years. That's a lot of people exiting the workforce, taking a lot of institutional knowledge with them,” says Bob Weidner, chairman of the Metals Service Center Institute, Rolling Meadows, Ill. "We're starting to see it in our industry. There are a lot of very experienced members of the salaried workforce, as well as members on the shop floor, who are retiring."
These retirements are coming at a time when the industrial sector is already facing a shortage of talent. There are an estimated 600,000 manufacturing jobs that need to be filled in the United States, a number that could grow if the much-discussed reshoring phenomenon takes firm root.
"We recognized the skills gap when manufacturing started reshoring, saying it's more cost-effective to do it here," says Paul Kuchuris, president of the Association for Manufacturing Excellence, Rolling Meadows, Ill. AME recently launched several initiatives to help attract a larger workforce to manufacturing. "The returning companies are not going to need the same number of jobs because we’re less labor-intensive in the U.S., but they’re going to need competent labor."
The U.S. educational system has not been very supportive of manufacturing, however. High schools do their best to get students into four-year colleges, and the colleges steer them toward high-paying white collar jobs. Only in recent years have educational institutions begun to rethink that narrow focus.
"We need to get to the teachers. We need to get to the counselors. Unfortunately, counselors are much more geared toward sending kids to college than to technical training schools or trade unions," Kuchuris says.
Overcoming the stigma of factory and warehouse work is a cultural challenge. "There's a perception out there that manufacturing is a dead-end street from a career standpoint. That is really a fallacy. Manufacturing is a solid, high-tech industry, it's not the dirty old factories of the past,” he adds.
Roger Lindsay, chief human resources officer for Ryerson in Chicago, says the identity problem is even more acute for service centers. "It's amazing when you consider that the distribution industry is generally the largest in the United States, yet most people don’t know what it is. Metals distribution is even tougher. Not only do we have the distribution tag, but we’ve also got metals. Neither typically attracts talent."
Forward-thinking individuals and organizations throughout the industrial supply chain are hoping to change those perceptions. For example, at the secondary school level, AME has created the Adopt-A-School program, designed to help manufacturers team with local high schools to offer plant tours and mentoring programs. The idea is to educate teens on all their options before they make a career choice.
On the higher education front, the country's community colleges have made some progress. Buoyed by federal grants, many two-year, career-focused schools have begun to steer students into manufacturing disciplines. Weidner pointed to Harper College in the Chicago area, which added a manufacturing trade school to its program. "That's happening across the country, whether it’s Indianapolis, Columbus or Atlanta," he says.
Tulsa Community College is another example. The school has started a Demand-Driven Training Program, a manufacturing training curriculum supported by a $2.5 million federal grant. The program provides a thorough understanding of manufacturing terminology and basic skills, as well as real-world experience and hands-on training. Graduates of a new 12-hour program can earn certified production technician status.
"We're basing a lot of our training on best practices, and we have a lot of local and regional employment partners," says Beth Wild, director of advanced manufacturing for the school. "We are a workforce program, so that when students get out of the program, they will have options."
For service centers with job openings, having a strategy to identify and recruit this talent is imperative. "It's an exciting time for companies that are committed to this," says Weidner. "For the companies that don’t take this seriously, that think they’ll get to it in 3-5 years, there will be long-term negative implications. Their competitors are thinking about it today."
Service centers use a variety of methods to find prospective employees. The methods differ somewhat depending on whether the opening is on the shop floor or in the office. For warehouse jobs, distributors often work with local schools and employment agencies.
"We're very much a temp to perm organization in the hourly ranks. We bring them in, typically for 90 days, starting with entry-level jobs and work them up with training on how to run the various machines,"
says Mark Jones, vice president of human resources for O'Neal Industries, Birmingham, Ala. If they show the necessary enthusiasm and aptitude, they are offered regular employment. O’Neal doesn’t use a single temp agency for its hires, but works with the strongest agencies nearest to its various locations.
Stephanie Forand, the human resources representative for Kloeckner's Southwest Region, often sees geographical stumbling blocks to finding the right person. "My challenges tend to be regional. Some areas just don’t have the workforce others do."
At Kloeckner's Amarillo, Texas, facility, where material is stored outside, employees have to be willing to work sometimes in the hot Texas sun. Likewise, when trying to recruit skilled drivers, the company has to compete with the lucrative oil and gas businesses in the area, Forand notes.
Nonetheless, in a labor market that has been plagued by high unemployment for more than five years, the fact that service centers still struggle to fill certain jobs is vexing. "We offer great benefits, with a 401K and paid vacation. When you have those types of benefits to offer, it's sort of frustrating when you can’t find a steady workforce," she adds.
In terms of what service centers look for in a candidate, Linda McCue says her company wants someone who is "promotable." McCue is the vice president of human resources for Butler, Pa.-based Marmon-Keystone Corp. "Based on the way we do things, our warehouse people have to have the same computer skills as the office staff."
To McCue, for whatever position a company is looking to fill, the first step is to create an accurate job description. "It's very difficult for HR to recruit someone when the hiring manager isn’t clear on what he is looking for. We make sure we have an up-to-date and accurate job description, and we have clear criteria established with the hiring manager. Once we have that, we feel comfortable stepping out and starting the recruiting process."
While the high schools, community colleges, temp agencies and military veterans organizations (see sidebar) are the feeding ground for the warehouse side of the business, four-year universities and the professional ranks remain the primary source for sales and management positions. Poaching talent from other distributors is a questionable strategy to rely on, says Ryerson’s Lindsay. "We've got to do a better job of marketing ourselves and the opportunities in our industry, rather than continually stealing from each other. That’s a zero-sum game."
For human resource professionals, educating educators and their students on the long-range career prospects in the service center industry remains a challenge. Indeed, many young people today are not looking to make a long-range commitment to any job. It is common for them to jump from job to job as they seek out new experiences and new interests. "In the past, if someone moved from company to company, you raised your eyebrow and wondered why they couldn’t hold a job. Today, if a resume only has one or two jobs on it, you wonder why they couldn’t get a job somewhere else,” McCue says. "We're in an environment where people are expected to move from job to job."
Despite such generational changes, much remains the same for hiring managers and HR personnel. "Companies are still looking for individuals who are honest, ethical and hard-working," says Weidner. "They're looking for young men or young women who have demonstrated they can think critically. Whether you're on the shop floor or the inside sales desk, the jobs are really going to be knowledge-based."
Call in the Marines!
Service Centers Welcome Returning Vets
Service centers on the hunt for new talent have another promising source for candidates besides colleges, trade schools and competitors--returning servicemen and women.
The Department of Defense estimates that 200,000 service members will be transitioning to civilian life annually over the next five years. That's one million potential forklift drivers, machine operators or salespeople available to the distribution industry at a time when companies' ranks are being thinned by baby boomer retirements.
Numerous organizations are now actively striving to match up industrial employers with interested military veterans. In 2012, the Get Skills to Work program was launched, a collaborative effort between GE, Lockheed Martin, Alcoa, Boeing and the Manufacturing Institute to train returning service personnel for jobs in advanced manufacturing.
The Get Skills to Work coalition focuses on accelerating skills training for U.S. veterans; helping veterans and employers translate military skills to advanced manufacturing jobs; and aiding employers with tools to recruit, hire and support veterans.
American Corporate Partners is a New York-based nonprofit that offers veterans tools for long-term career development through mentoring, career counseling and networking opportunities. Colleen Deere, a spokesperson for ACP, says veterans bring a lot to the table for companies in a hiring mode. "They're highly trainable, they’re used to taking directions, they’re adaptable and they have good leadership skills. They can assimilate very quickly into a lot of different situations."
Most companies are amenable to hiring veterans, but don’t necessarily consider the option or don’t know where to begin if they do. "The main gap sometimes is that the company has never hired a veteran before, so there is a certain stigma they're concerned about," Deere says. "With a little exposure to the veteran community, that can easily be overcome."
United Performance Metals, Hamilton, Ohio, works with Cincinnati State University to offer just-in-time training sessions to veterans. UPM supports the training with classroom assistance and identifies employment opportunities for individuals who earned certification through the program.
"Whenever we have an opening, especially on the warehouse side of things, I keep in touch with them," says Sherri Davis, HR and training lead for UPM. "The veterans come very well prepared for interviews, and they're very driven and dedicated. They're just a very good pool of applicants."
UPM recognizes that servicemen and women likely won't have specific experience operating a cut-to-length line or a slitter, but their military training helps them adapt quickly to whatever challenges are presented. It's as helpful for the company as it is the job-seekers, she says.
"Without a program like this, we may not know the route to take to find the veterans that match up with our position. With some it doesn't work out because they’re looking for something other than manufacturing, but for the most part they've been willing to come and interview to see if it’s a good fit. It's a whole new pool of candidates we can look to, and I've relied on that heavily when we have openings."