Sunday, February 28, 2010

US Manufacturing Talent Shortage

I already referenced the talent shortage in China, citing an article in the Financial Times. The New York Times published a similar story that adds some useful detail. Now I'm reading about the same problem, but in the United States:

For many industrial companies, the recession has not eased the skills shortage. Siemens, the German engineering group, has about 600 vacancies for engineers in the US, up from 500 on last year, according to Jim Whaley, president of the Siemens Foundation, which promotes technical education in the US.

Manufacturers said the biggest shortages were for engineers and skilled floor workers.

“It’s difficult to find people for assembly, machining and motor-winding positions – jobs that require maths skills and the ability to read technical blueprints,” said Ron Bullock, owner of Bison Gear, a manufacturer near Chicago with 225 employees.

An aging workforce is a big reason why there is a lack of available talent and the situation is expected to get much worse as the economy continues its recovery. The real issue is one of labor mobility. Jobs aren't going overseas or in short supply because of a production slowdown so much as the demand for talent is shifting towards the highly skilled.

Picked up via Civic Analytics, the data junkies at FiveThirtyEight take on the myth that America doesn't make anything anymore:

There is a common theme across the internet: US manufacturing is dead and it's never coming back. Well, there's a big problem with that analysis: it's not true. In fact, as the chart above indicates, it's actually false. Note that since 1960, the index of industrial production has risen from a little below 30 to its current level of about 100. And note the increase is continual -- meaning the number didn't just hover around 30 for most of that time only to spike up in one big move. The index has continually risen over that entire period.

The compelling analysis slays a few bogeymen, including the perennial demons of free trade and outsourcing. Driving the impressive productivity gains (more goods, less people) is a better educated workforce. More from the same 538 post:

Going back to the recent post on employment remember that in this recession the unemployment rate of specific groups was heavily influenced by education level. In fact, according to the BLS, higher education levels (college graduates and above) were remarkably untouched in the latest recession while lower education levels (high school graduates, high school with some secondary education) had higher rates of unemployment. Lower levels of education are typically associated with manufacturing and construction employment -- the two areas of jobs that account for the largest percentage of job losses in this recession.

This helps to explain the seeming paradox at Siemens. How did the company have so many openings during a year when unemployment was skyrocketing across the country? The college graduates kept their jobs and Siemens was faced with the same talent shortage it had before the Great Recession hit. Meanwhile, manufacturing continued to shed less productive positions. Many of those jobs won't come back even after a full recovery.

I keep hearing about the coming clean tech revolution. Where is your region going to find the employees to staff these companies? The war for talent escalates.

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