Friday, July 18, 2014

CEO apparently cannot afford to train his workers

Via my new weekly dose of pain (a Google news alert for the term "skills gap"), a CEO has a good one (emphasis mine): 
...Yet in manufacturing alone, a half-million jobs are going unfilled because firms have been unable to find qualified workers. The feds can't address our nation's shortage of skilled labor on their own. Private firms — especially those in manufacturing — must also invest in training. Indeed, without workers fluent in the high technology that runs today's factories, manufacturers will not be able to survive. 
Modern manufacturing is more than pulling levers and navigating forklifts throughout a plant. Consider the work flow of, say, an engineer at a facility making chairs. 
In response to a new order, he'll first use advanced math to calculate the amount of steel that needs to be fed into the presser. He'll have to choose the right combination of half a dozen sheet types, each with a different weight, length and thickness. Then he'll operate, monitor and perhaps fix the quarter-million-dollar machine that assembles the chairs. Even a minor mistake can yield major damage — and massive repair expenses.... 
...But as manufacturing has become more technologically sophisticated, the training needed to master a trade has grown too expensive and time-consuming for private industry to provide. Manufacturers already operate on thin profit margins. They can't afford to develop every worker from scratch. 
Fortunately, they don't need to. Throughout the country, many manufacturers, technical schools, and local and state governments have teamed up to help narrow the skills gap. Throughout Illinois, employers are teaming up with municipalities to expand vocational training... 
There is a common perception that American manufacturing is in decline. Nothing could be further from the truth. Instead, a shortage of qualified workers is holding American manufacturing back. Our nation's leaders must invest in closing that skills gap. If they do, an American industrial renaissance will follow. 
Dick Resch is CEO of KI Furniture.
I think there might be some contradictions there. Also, I'm amused to see this tidbit from the Wall Street Journal:
The government hasn't tracked spending on corporate training since the mid-1990s, but one rough measure, the percentage of staffers at U.S. manufacturers dedicated to training and development, has fallen by about half from 2006 to 2013, according to research group Bersin by Deloitte.
That seems about right to me -- must be those incredibly thin margins. 

11 comments:

  1. With all the exceptional engineering schools in the upper Midwest, one has to wonder why this guy can't find someone to make his damn chairs.

    Of course, he might be looking for some "soft skills" not taught in school...

    http://www.jsonline.com/news/wisconsin/43255322.html

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  2. Well, if businesses had to train their employees, not only would businesses have to pay for training, but they'd also be financially invested in their employees and couldn't discard them like used toilet paper the next time the CEO needed a bonus. In addition, if states are willing to shift tax burdens from businesses to individuals to provide tax incentives and training to poach businesses from other states (see herehttp://www.cleveland.com/metro/index.ssf/2014/06/property_tax_bills_have_shifte.html - OH again), businesses aren't likely to say no.

    Is there that much downward pressure on the end products for the margins to be that thin? It doesn't seem like that's reflected in prices (though, as with parts manufacturers, maybe it doesn't have to - in that case, their customers have almost monopoly pricing power).

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  3. He should have a love child with Andy Liveris.

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    Replies
    1. And create an inbred supercapitalist savant with no ability to comprehend the real world

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  4. Obviously, this has been around before... in the linked article (paywalled), James Surowiecki discusses the lack of employer training whilst they complain of a skills gap...

    http://www.newyorker.com/talk/financial/2012/07/09/120709ta_talk_surowiecki

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  5. The whole "skills gap" line is BS. I mean US Army does not complain about skills gap, and it's not because its recruiters cruise bad neighborhoods looking for kids who have proven themselves on the battlefield, right? It's because they invest in training their people. But of course a four-star general does not get to erect a 6-foot tall Adonis pissing Absolut using corporate funds.

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    1. OPINION: Public schools, private military academies should address crucial CQB skills gap.

      COMJSOC complains of shortages of qualified entry-level Navy SEALs, warns young people lack crucial room clearing skills.

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    2. It may depend on diet, but I didn't think there actually was a shortage of room-clearing skills. Maybe young people don't have them as much now, I don't know. Perhaps a copromotion (however you wish to take it) with Taco Bell?

      We don't seem to have much of a tolerance for CQB training in public schools. Parents don't like hearing from their eight year-old's teacher, "We're sorry about Hunter, but the more the children in our class bleed in training, the less they will bleed in battle." On the other hand school performance in CQB doesn't seem all that good based on violent incidents, so maybe training is necessary. If you thought teachers didn't like high-stakes testing before...

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    3. Clearly Chicago needs a few more recruiting stations. Maybe New Orleans too, but definitely Chicago.

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    4. I always enjoy first-hand news as reported by Chicago residents.

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  6. Look, we all know this is BS in terms of jobs in chemistry. My company has had the luxury of turning away many good candidates for numerous positions (perhaps not welders) as of late. My question is this: are we going to spread the truth about "skills gaps" and "STEM Shortages" or just sit back and passively watch this tragedy play out?

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