Who is Responsible for the Shortage of Skilled Labor?

by Dean Prigelmeier, President of Proactive Technologies, Inc.

Some critics say that employers have repeated the phrase, “we just can’t find skilled workers” to ease their guilt from outsourcing good paying jobs to lower wage labor markets. Some say they say this to justify low wages in the U.S., and some say it is to make the case to congress that the worker visa programs need to be opened up to allow technically skilled foreign workers who are willing to work for a reduced wage enter the labor market. While all of these may be true or could have been true at one time, no one doubts that the affects of the past few decades have greatly disrupted the continuity of a strong U.S. labor force and its ability to advance.

In an article written by Michael Collins for Industry Week last year entitled “Why America Has a Shortage of Skilled Workers,” the author makes a convincing argument that the so-called shortage was in large part self-inflicted. This article should be on every manufacturing operation manager’s, every accounting department manager’s and every corporate executive’s reading list.

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“Year after year, the large corporations have invested in more automation and complex machinery to eliminate labor, but do not seem to want to invest in the comprehensive training programs that will increase the skill levels of employees to maintain, troubleshoot and repair what they have installed.”

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In an example of the misunderstanding of the value of labor he notes that, “Year after year, the large corporations have invested in more automation and complex machinery to eliminate labor, but do not seem to want to invest in the comprehensive training programs that will increase the skill levels of employees to maintain, troubleshoot and repair what they have installed.” I would add “operate” to that list.

This theory of labor’s relationship to operations, that less is better, seems to have been proliferated to all divisions in the corporation, and adopted by more and more enterprises as the logical solution to rising costs. Labor is a easy target if viewed as only an expense. This disregards the value of gained worker expertise in both production and service positions. It becomes easier to sell as a solution that cutting labor expenses is necessary for sometimes a very short-term rise in profits to appease shareholders, as if there is no credible alternative. Nonetheless this almost always leads, in the long-run, to decreased capacity and higher replacement costs in the search for lower-wage workers.

The author of the article went on to state that “as of 2014, [The U.S. Department of Labor database of all registered apprentices] shows 410,000 apprentices registered with the federal government. Only 11,447 (2%) of the apprentices are related to the manufacturing industry…In other words manufacturing employs about 12 million workers and is training 11,447 apprentices. Less than 1% of the total manufacturing workforce is getting formal advanced training in the form of apprenticeships.”

“if we are going to train the new manufacturing workers to do advanced troubleshooting and have the multi-skill ability to do many jobs, I believe it will require an understanding and even greater investment in long-term, comprehensive training programs. I suspect that the publicly held companies will continue to view training as an expense rather than an investment. This kind of mindset is very suspicious of training programs that take years to complete, paying people for skills they attain, or issuing certificates to people that make their skills transferable.”

Manufacturers admit that they find themselves in the unfortunate position of being unable to find the “skilled workers” they are looking for, when in fact they may have had at one time plenty of them. These were employees with strong skill bases that could have been transformed to maintaining and operating the new equipment and performing the new processes brought in to improve operations. “Upskilling” or “reskilling” isn’t something that happens through osmosis, it takes a deliberate effort to ensure success and keep training costs down. And in comparing “costs,” deliberate upskilling and transferring expertise is far less expensive and far more effective than starting out with a low-wage blank slate with no assurances of increased capacity until they receive training.

It does not take a doctorate in economics to see the logic in this. But often critical decisions affecting staffing levels are not made by people that understand this. For them, workers are just numbers on a spreadsheet. Nevertheless, numbers on a spreadsheet need to be seen in context, lest the analysis of costs versus investments is lacking and conclusions faulty.

Educational institutions and state agencies tend to encourage employers toward “related technical instruction,” which is a recurring cost, as the cure and only solution for any skill shortage issue. It is what they have been doing for centuries, so its level of effectiveness can be rightfully questioned if there is a “skills gap” or “skilled worker shortage” today. Worker “training” is far different than “education,” an important point overlooked. Education can be a part of the training process but is a prerequisite of training and not the solution itself. Nevertheless, it is a predominant and huge institution that draws employers in need of a training solution in, by gravity more than anything.

While there is comfort in receiving related technical instruction from a recognized educational institution, any shortcomings in the content and focus of the instruction are detected at the most inopportune time – the interview by the prospective employer or when applying the knowledge gained in the learning and performance of paid work. The task-based application of what the student learned, and the necessary task-based training required to reveal any value, is not seen as the educational institution’s problem. It is assumed the employer has task-based, on-the-job training covered which they usually do not – adding to the certainty that even good quality related technical instruction does not necessarily improve the chances of success for that worker, for that employer.

We have the resources and capabilities needed to repair the damage done to our skilled workforce, if only we would accept these important differences and align our resources in most practical and pragmatic way. Workers and employers do not have time for a rerun of what has not worked before. For more information on a highly effective and proven approach, visit the Proactive Technologies website. You might find the PTIpromo – “A Preview of an Upcoming Presentation” (13 minutes) worth your time.