If workers have been sitting at home collecting unemployment checks without retooling their skills, they will likely be left behind for some time or find that their new job won't pay what their old one did. For companies hoping to expand, this also creates a challenge. First mover advantage will go to those companies that acquire skilled talent and develop employee loyalty before a bidding war breaks out. Companies that defer, will face the prospect of having to attract new employees with higher compensation, having to foot the bill for accelerated training programs, or having to sit out the recovery.
Thursday's Wall Street Journal once again commented on the jobless recovery in an article by Theo Francis "Why Hiring Lags Even as U.S.. Factories Hum". The article cites automation as a leading, but not the only factor in this trend. Many smaller plants have gone without automation or only experimented with it before the downturn. With interest rates relatively low and with government policy discouraging adding new hires, owners will increasingly turn to automated systems as they add capacity. Traditional factory jobs will be replaced with engineering jobs to design automated systems. The building of these systems will be done with skilled labor, too often overseas. Systems integrators and skilled contractors will install and set up these new lines and multi-skilled mechatronics technicians will maintain them at peak efficiency. Significantly fewer but more computer-savy operators will turn out products of higher quality and lower cost in an expanding economy.
Lest we think that these trends only affect manufacturing jobs, I was recently reminded by some folks at The National Center for Supply Chain Technology Education that retail jobs and material handler jobs are being converted in a like manner. Order fulfillment is becoming a highly automated process, using mechatronic systems that look much like the world-class production systems found in consumer goods manufacturing plants. And it is unfortunate to report, that my own recent purchasing experiences confirm that, even when I try to buy locally, there are many things that can no longer be found locally, leaving the internet and automated fulfillment as my only alternative.
From the manufacturers' perspective, they face the following: their pool of talent is disproportionately filled with baby boomers who are aging; their pool is being drained doubly fast by those people who would normally be expected to retire now and by those who deferred retirement due to the down-economy; the walls of the pool are getting higher as the level of technology in their plants increases; standing around the pool are people who can't swim and aren't able to jump in to this deeper water; across the street, their competitors' pools are in the same situation; and on the edge of town, new pools are being built for companies who are trying to re-shore manufacturing and for non-manufacturers who need the same skilled swimmers for order fulfillment plants, agriculture and a host of other industries that are being affected by information technology and mechatronics.
Manufacturers, educators, and others - take note! We need change - a new paradigm for creating a skilled workforce. It will take some time. If we have the good fortune of an imminent recovery, we won't have enough time, and there will be some pain to endure in the interim. Smart manufacturers will be taking steps now to mitigate the coming pain and smart workers will be acquiring new skills to benefit from it.
Watch for strategies and best practices to solve the intermediate and longer term problem in the upcoming Manufacturing Workforce Development Playbook to be published this Spring by the folks at Packaging World, Automation World and Healthcare Packaging. If you have good ideas to share, get in touch with me. Let's solve this thing!