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Pipeline to Potential

How refocusing recruitment and development efforts can help service centers fill looming skills gap

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When considering whether your company is set up for long-term success, there’s one unavoidable fact: people matter. Nobody understands this more than U.S. manufacturers, who rely on their employees for everything from innovation and production to sales and customer service. That’s why ensuring the future viability of the workforce is a paramount concern of manufacturers and service centers alike.

A 2015 study published by the Manufacturing Institute and Deloitte Consulting found the vast majority of manufacturers agree there is a talent shortage throughout the industry. The report, which surveyed more than 450 manufacturing executives, indicates as many as 2 million manufacturing jobs could go unfilled over the next decade as a result of this growing skills gap. That shortage, compounded by negative perceptions of manufacturing careers among younger workers and because older, more-skilled workers are beginning to retire, is now being felt by businesses far and wide. And service centers are no exception.

Whether large or small, metal processors and distributors are having trouble finding the right employees, particularly to fill the more highly skilled positions inside their production facilities. “Our biggest struggles in the hourly workforce are finding maintenance people, tool and die folks, and welders,” says Jennifer Rohrbacher, corporate recruiting manager at Worthington Industries, Columbus, Ohio. “People coming into the workforce now are quite skilled; they’re just not aligned with the skills that we need. There’s a huge gap between what is actually needed in the workforce and what is available.”

According to the Manufacturing Institute’s report, 82 percent of executives surveyed believe the talent shortage will affect their ability to meet customer demand. Reducing scrap, avoiding downtime and cutting turnover costs are just a few benefits of a well-trained and dedicated workforce. Despite these positives, companies are still struggling to fill the skills gap and develop new approaches to hiring, training and retaining the next generation of metal industry workers.

John Hindman, director of learning and performance improvement at Tooling U-SME, says that’s because a lot of manufacturers have yet to fully appreciate the severity of the talent shortage and the potential impact it could have on their business. Whether they’re minimizing recruitment efforts or relying on outdated learning and development programs, many companies have failed to adjust their hiring and training practices to be more aligned with the current generation. “We now have a young, inexperienced workforce that could be really good, but we need to make sure that we have programs in place to develop them to the standards that we’re looking for,” says Hindman.

The root cause of the skills gap is three-fold. Currently, a large number of workers employed as machinists, welders or in other skilled positions are approaching retirement age.

According to the U.S. Department of Labor Statistics, almost 27 percent of the workers in the primary metals and fabricated metal products industry are age 55 or older. And as these baby boomers start to retire, there simply aren’t enough qualified candidates to fill the ranks. Combined, these two factors are putting major strains on the workforce.

Another important aspect of the talent crunch has to do with a lack of preparation on the part of U.S. manufacturers. Hindman says there are plenty of people in the millennial workforce, 79.8 million, according to the Pew Research Center. And it’s up to employers to not only recruit but train this new crop of manufacturing professionals to their desired performance level. “People coming in don’t have those basic manufacturing skills,” Hindman says. “As a company, those are core skills you have to teach people during their onboarding period before you can actually release them to on-the-job training.”

Building the pipeline

Thanks to advanced planning, Worthington is one service center that has been able to prepare for possible labor shortages in the future using a variety of reactive and proactive hiring practices. The company currently employees about 11,000 people worldwide, and Rohrbacher says a lot of these employees are in that baby boomer generation. “Because of our succession plan and because of our workforce planning, we are very clear on where our shortages are going to be,” she says.

Worthington’s solution has been to actively build its recruiting pipeline. From partnering with area schools and military bases to sitting on local workforce development consortiums, the company is taking a multifaceted approach. Worthington also recently held its first career day, inviting college juniors and seniors into its facilities to learn about internship and employment opportunities with the company.

Because many younger workers still hold a somewhat negative image of manufacturing careers, these types of proactive recruiting efforts are needed if companies are going to change people’s perceptions of the industry. “I don’t know that people, whether they’re graduating from high school or college, think of manufacturing as a sexy line of work,” Rohrbacher says. “We are trying to change that by getting in front of individuals.”

And when a position opens that needs to be filled quickly, Worthington first looks to promote internally before going to temp agencies or recruiters. The key here is the company’s training program, which Rohrbacher says prepares employees for advancement and gives everyone the opportunity to add another tool to their belt, so to speak. “If they want to move from operations or get off the production floor, if they want to move into management or finance or wherever their passion is; if we have the role for them, they can do it,” she adds.

For smaller service centers, such as Hammond, Ind.-based Berlin Metals, wide-ranging recruitment programs are an unrealistic option. When a position opens, oftentimes they’ll look to tried-and-true methods such as job boards, recruiters and word of mouth to attract new talent.

“If you’re a friend of someone who works in the company already or you’re a relative, chances are you’re going to be a decent employee because they want to be proud of bringing you in,” President Roy Berlin says. “We actually encourage people to give us the names of people they know and like and who they’d be happy to work with.” Berlin Metals will also look to temp agencies and recruiters when needed, but referrals are the preferred method of maintaining its recruitment pipeline.

As for those positions that are hardest to fill, Berlin says more highly skilled workers, such as equipment mechanics, are a rare but valuable commodity on the production floor. And while his company only runs coil slitting lines, he’s noticed talent gaps among some other common positions within service centers. “Welders and people who can work with electric and hydraulic [components] on big machinery, they’re in short supply,” Berlin says. “If you have that education, you can snap your fingers and get a job.”

When all else fails, companies can contract with outside firms for help finding qualified candidates. Metal Recruiters is an executive search firm that specializes in the metals industry. Joseph Maniscalco, talent acquisition manager for the Miami Lakes, Fla.-based firm, says Metal Recruiters has worked with large service centers such as Ryerson and O’Neal Industries all the way through to small family-owned operations.

“Our ultimate goal is to find the perfect candidate who’s going to be a good fit for these companies,” he says. “A lot of times a company is not able to find someone locally, so they reach out to us to do a little extra digging and find a candidate that they weren’t able to produce from advertising in the local newspaper or online.”

Reaching your potential

Hiring is only half the battle, however. When you consider the age and skillset of today’s entry-level manufacturing worker, solid training is more important now than in years past. As part of his job at U-SME, Hindman works with individual manufacturers to develop what he calls “high-performing workforces” through the use of standardized learning and development programs.

“You have to look at those characteristics of the millennial workforce and see how that ties to learning and development practices,” he says. “You’re not going to train people the same way you did 30 years ago. Ultimately, you want to make sure you have good practices that take and develop these individuals into your future workforce.”

That starts with a structured onboarding process, where the position is clearly defined, and the new hire is taught the basic skills needed for the job. Early on, companies should also work with new hires to create a development plan that gives a clear understanding of where the employee can end up and how they can develop towards other roles within the organization. This will also help reduce turnover and boost employee retention, according to Hindman.

“If we’re not capturing these individuals on day one with good onboarding, strong development practices and strong career pathway opportunities, they’ll go home,” he says, noting that many millennials decide whether they’ll stay with a company for the long term by the end of their first day.

New hires should then begin a blended training program, which includes on-the-job training for their specific role and evaluation by a dedicated trainer. Hindman stresses that training shouldn’t end once an employee is released to the job.

At Worthington, training and development are important parts of the company’s culture. Employees receive a combination of online and in-person training, depending on their position, and that continues throughout their tenure with the company.

Additionally, every new hire works with management to put together a development plan, which determines what kind of work they will be doing, sets performance goals and plots a course for how they can meet those goals. “You are kind of in control of your destiny,” Rohrbacher says of Worthington’s employees. “Wherever you want to go, whatever you want to do, the company is here to support you.”

An example of this career-focused training approach is the Worthington Industries Rotation Experience and Development Program. The two-year program uses rotational assignments and training to help current employees build leadership and functional skills that they can apply in a manufacturing environment. Typical functional rotations include: environmental health and safety, quality, commercial, supply chain, transformation and innovation. “Our WIRED Program takes folks who are in our workforce and who are interested in moving up or advancing and gives them a well-rounded view of Worthington,” says Rohrbacher.

With just under 70 employees, Berlin Metals takes a different approach to training, but still emphasizes accountability and growth opportunities. Typically, the company hires general warehouse workers who may or may not have some manufacturing knowledge. Additional training is done in-house. New hires learn the ins and outs of the service center mostly through on-the-job training, eventually earning the opportunity to move on to more-skilled positions, such as machine operator.

“Every person I have, I want them to be someone who’s climbing,” Berlin says. “If they want to become an operator, we can train them to do that within six months to a year. After a few years, they can be good, and they can make decent money.”

For positions that require advanced knowledge of the metals industry, such as sales representative or plant manager, Berlin admits that companies sometimes look for individuals who have earned their wings at a larger service center. “Smaller companies like mine look for people who have had some education elsewhere, and maybe there’s no room for them to move up in that organization,” he says.

Regardless of the company’s approach, Hindman says it should, at the very minimum, standardize the training process. “As we have an inexperienced workforce coming in the door, it’s important to structure and standardize that training program, and make sure that those who are delivering the training have the capability to teach people properly.”

Ultimately, he thinks manufacturers can meet current and future workforce challenges by making learning a business directive. Not only will companies be able to bridge the skills gap, they’ll also see a positive impact on their bottom lines. From reducing downtime to lowering costs associated with high turnover, it pays to train, Hindman says. “Whatever a company puts into a program like this, 99 percent of the time they can get that return on investment in a very short amount of time.”