
Don't Blame a 'Skills Gap' for Lack of Hiring in Manufacturing - _delirium
http://fivethirtyeight.com/features/dont-blame-a-skills-gap-for-lack-of-hiring-in-manufacturing/
======
taneq
> The manufacturing industry has become so specialized that companies are
> looking for hyperspecific skills that few outside workers could be expected
> to have.

I've seen this in action. A company hires someone, that person bounces around
the company picking up various skills, roles and responsibilities.

Time passes, that person leaves the company, and the company looks for a
replacement, completely ignoring the fact that the role and the employee who
filled it grew organically together over the years, making it impossible to
find a drop-in replacement.

They then complain that there's a skills shortage because none of the
electrical engineers applying for the position are proficient with both
graphic design in Corel Draw, and operating the shop's CNC lathe.

~~~
larrydag
ITT closing down doesn't help. There definitely seems like a need to fill
technical certifications.

~~~
mox1
The article talks about this, and claims that most of these jobs don't require
certifications.

They basically require plant specific on the job training, which for whatever
reason companies aren't providing.

It's similar to the tech industry where jobs ask for 10 years of node.js
experience, 15 years of Coffeescript and advanced linux kernel knowledge....If
you need that person, your going to have to train him.

------
danvoell
The biggest "gap" in manufacturing is the wages gap. Most new jobs in
manufacturing require less skills than a Walmart greeter. They either stand
around and press a button or stand around and pull a piece of plastic off a
part. Manufacturers aren't willing to pay much more than $MinimumWage per hour
for this job. The people who apply for these jobs are just a revolving door
that cycle through all the local manufacturers once they get bored. And then
manufacturers complain because they can't find someone who wants minimum wage
and wants to press a button for the next 30 years and is dependable. They cite
"work ethic". Technology and capitalism are the only one's we can blame in
this situation.

~~~
djschnei
"Blame technology and capitalism"? Are you advocating that a higher minimum
wage would fix this? How exactly would pricing labor above it's actual value
cause MORE of it?

~~~
dpritchett
If these manufactured products can't be brought to market without the button
pushers, the value of the button pushing is almost certainly higher than
minimum wage.

~~~
r_smart
In which case the minimum wage is unnecessary. I had one of these button
pushing jobs (well it was more complicated than that, but still not
demanding), and was paid well above minimum wage.

~~~
djschnei
Exactly where I was going to go. Economies are about allocation of finite
resources (labor being one of those). If a company is so poorly ran that it
can't determine the correct price it's willing to pay for labor through cost-
benefit analysis, I'd rather it not exist. Politically, we have a thing for
making it harder for bad companies to fail.

~~~
r_smart
Agreed! There are bad businesses making bad decisions all the time. Just
waiting for someone to come eat their lunch. But we sort of shelter them from
those consequences.

My only disagreement with you is that I'm happy for a bad business to exist as
long as it can manage it. I just don't think we should save them from being
destroyed by their dysfunction.

~~~
djschnei
I guess I just mean I don't think we (government) should keep bad business
afloat. If they can manage on their own, who am I to say it's bad ;D

------
theandrewbailey
> Companies, the authors write, “are unwilling or unable to solve their skill
> challenges through internal training, even for skills that are highly
> specific to a particular plant.”

That's true for all companies. They don't want to spend the money to train,
since employees can (and often do) leave after just a few years (if not
months), but are also unwilling to make the workplace a more desirable one.

~~~
Bahamut
It's pretty sad, as the solution is staring at them in the face. These are the
companies who refuse to adapt.

~~~
lj3
It's not that simple. The economic situation on the ground is that anybody
making less than $70k a year is better off on welfare. Factory workers make
less than half that. Who would willingly train to do a hard, monotonous job
when they could sit on the couch doing nothing and get paid more?

~~~
rubidium
Reality check (no idea where you live... but your blithe statement reveals
some serious lack of understanding of the situation of most people in the US):

The U.S. Census Bureau reported in September 2014 that U.S. real (inflation
adjusted) median household income was $51,939.

Making $50k a year is WAAAAAAAAAAAAAY better than being on welfare.

~~~
mcguire
" _...median household income..._ "

That's also very likely two paychecks.

------
randomgyatwork
It seems like what they really want is someone with twice the skills for half
the pay.

My friend's dad always told me it was hard to find people to hire, but he also
said to hire someone he'd need to be able to make 3x what they cost to keep
around.

~~~
gregpilling
3x is the low end. I try to keep my factory at 6x . When you try to run at 3x,
then you may drift down to 2x or less. If you aim for 6x, then you survive
fine when it drifts down to 4x, and you are doing great when it goes up to
10x.

I think that people who aren't employers can lose sight of the fact that some
people are actually worth negative money per hour. Some people, even at $8.05
per hour, are not worth even that. Others, like the mythical 10x programmer,
are worth 10x the high wage you pay them (or more). A huge variation.

Example. Joe makes $8.05 sweeping the floor. Joe is not very diligent with his
work, and sweeps some aluminum dust and debris into a pile of iron dust and
debris, accidentally creates thermite and sets the corner of the factory on
fire. This now costs in one day what Joe would have made in a year (this
actually happened to me, last month. Thanks Bryan for putting it out).

Example 2 (another true story! a good friend's company) Roy is drilling holes
in a hydraulic press, actually in a dozen hydraulic presses that are all sold
and need to ship. He breaks the 1" drill bit he is using, and undaunted and
unwilling to tell anyone, he replaces the 1" bit with a smaller 15/16" bit and
continues drilling. The presses ship out, all 12 of them, very heavy and with
high shipping costs ($800 for the press and $200 for the shipping), and they
get delivered to the customers. Yay! A hard busy week, but it all went out!
Yay! bonuses for everyone! Then next week the phone starts ringing and it is
discovered that all 12 presses are not unusable - the hole is too small to fit
the piece that goes into it. All 12 presses come back, shipping borne both
ways by manufacturer, and the presses are scrapped and replaced. Roy caused
over $10,000 in losses for a very small company in exchange for the $300
dollars in pay. Roy was worth -$250 per hour that week. Negative $250 per
hour.

Of course we want twice the skills for half the pay. I would settle for twice
the skills for twice the pay though. It is just so hard to find the "twice the
skills" part. I would be delighted to find 1x the skills, even that is hard.
When you find the person with 10x the skills, I recommend making it so they
never want to leave. Equity in the company (or a cage of some kind in the
basement, LOL)

~~~
clifanatic
> all 12 presses are not unusable

You shipped out $10,000 worth of deliverables without even so much as testing
that they were usable? You have a manufacturing process that doesn't do basic
acceptance testing of each unit as it comes off the line? And you really think
this is a personnel problem?

~~~
dropit_sphere
A) wasn't the grandparent's company

B) isn't really relevant to the topic of discussion, which the possibility of
someone being worth negative money/hr

C) could have been kinder :)

------
davidf18
If this article is correct, if firms aren't flexible enough to train workers
with specific skills if they can't find anyone with that skill set that
suggests that the firm _is not filling jobs it needs_ and thus not as
productive as it should be increasing shareholder value.

That means that there is bad management and the board which represents
shareholders should dump the current management and find management that is
focused on doing what it takes legally to improve shareholder value.

~~~
Bartweiss
Take the cynical view and recognize that this isn't a totally free market.
Everyone has an incentive to kick back and let someone else solve the problem.

Paying for training is usually a crappy deal, because someone else can use the
same money to raise wages and steal your trained workers. You can address this
with things like repayment-required contracts, but that's ugly and difficult
for most jobs. Plus, you've got a better option: get it for free!

So yes, you operate at slightly lower efficiency, but it's not because you're
dumb. Instead, you're hoping that someone else (a competitor or ideally the
government) will train up some employees you can then hire. Ideally, you get
the government to push a career-training program in your desired field,
producing a glut of specialized workers who not only don't need training, but
keep wages down because they're only skilled in one specialized field.

In which case, the management is perfectly sensible and 'sticky' wages in the
face of a hiring gap make total sense.

~~~
davidf18
Well, it makes the appearance that they are not employing and training people
that are working to maximize shareholder value. The explanation that you
present seems interesting but too complicated. If they lack employees and need
to train them in order to improve productivity and thus shareholder value they
should do this.

I think there is a lack of transparency to shareholders that understand their
management is lazy/incompetent.

Also, in the article, it would be helpful to have the journalist interview
some firms and ask them why they don't train people if they can't find them.
Make it explicit.

~~~
Bartweiss
That would have been a really good addition to the article. We could probably
tell a dozen different stories ranging from "surprising industry-specific
complications" to "basic incompetence", and it's a shame the piece doesn't try
to get an actual answer on which one holds.

------
FussyZeus
We have more than a few factories in our area offering barely $40k for
incredibly specific skillsets involving various types of machines, totally
unwilling to train.

This is actually a really good explanation for how so much of the technology
in the Warhammer 40k universe is unknown and worshipped; nobody was willing to
train anyone on how it worked.

~~~
r_smart
On topic: $40k seems pretty decent for an operator, though with training.

Off topic: I'm still new to WH40k (started running a Rogue Trader game), but
my impression is that the tech ignorance was a mixture of a psuedo-religious
cult seizing control, information lost in the many wars, and the intentional
intellectual poverty of the populace that keeps them docile.

~~~
ryandrake
> On topic: $40k seems pretty decent for an operator, though with training.

Depends. Any mention of a dollar figure must include the region in the US, or
it's totally meaningless. A 40K salary could easily be really good, really bad
or normal.

~~~
FussyZeus
That's true and even I don't have a point of reference as it's not my
industry, it's just a regular feature of our local papers to have the local
businessmen complaining about the lack of workers. I checked out the job
listings out of curiosity.

Whatever the case, apparently it's not enough since they can't attract people
who are willing to work for that wage.

------
tboyd47
> Weaver and Osterman offer a more industry-specific explanation: The
> manufacturing industry has become so specialized that companies are looking
> for hyperspecific skills that few outside workers could be expected to have.
> But companies have also become less likely to offer training for new hires.

I would argue that it's not specific to manufacturing. This sounds pretty
similar to a phenomenon found in software development. Sometimes the principal
developer on a project leaves the company and no one can read their code. Even
if you match the laundry list of technology buzzwords perfectly, their code
could just be unreadable.

Going deeper, maybe the problem is even more general than that. If you have
manufacturing equipment that no one in your company knows how to use, is that
still considered capital? If so, what is that capital worth?

What about code no one in the company understands? Patents? Excel
spreadsheets? Is it still intellectual property? Interesting times are ahead.

------
mcguire
" _Another possibility is that what companies mean by an “opening” has changed
— that in an age of online job listings, automated résumé screenings and
increasing temporary and contract work, companies are posting more jobs than
they ever expect to fill. There’s some evidence for this: Recruiting intensity
— a measure of how hard companies are trying to fill open positions — remains
below prerecession levels in both the manufacturing sector and the economy
overall._ "

That is an interesting theory. Unfortunately, the abstract of the referenced
paper doesn't seem like the paper mentions much evidence. Also, my limited
experience makes me doubt manufacturing companies are throwing out job
openings willy-nilly, trolling for applicants. (In non-blue-collar jobs,
sure.)

On the other hand, the current environment would seem to make it easy to
overestimate the number of openings.

~~~
Bartweiss
My experience suggests that this theory is dead on. Less because companies are
putting up more openings, and more because the meaning of "posting an opening"
has changed in a way that causes overcounting.

When Verizon wants a floor-sales clerk, they're likely putting the opening up
on Monster, Indeed, and several other sites besides. That's 5-6 "openings
posted" for one actual job, and it's made even worse if they aren't quick to
take down the postings (why bother? you just route the resumes to spam). 30
years ago, you were posting a single job in specific places, and job boards or
newspaper ads would turn over 'naturally' if you didn't keep the posting
active.

So I don't know how important it is, but I'm definitely assuming that postings
are being multiply counted these days.

~~~
wott
And what you mention is just a multiplication of posting of the same job post.

But there is also the case that more and more work is subcontracted. So you
can find posts that are slightly different but all refer to the same job
position: 1 by the company where the job will take place, 4 by different
subcontractors, and 3 more because 2 of the subcontractors have themselves
subcontracted the job.

~~~
Bartweiss
This is a great point I had overlooked.

I did once realize that I was interviewing for the same job twice, once as a
contractor and once as a direct employee. Everyone had been sufficiently
close-mouthed about the exact role that I got several phone interviews in
before things came to a head.

And I realize this is multiplicative, so it probably means every contractor
and the original company are _each_ putting up 2-5 postings for the same job.

------
a_thro_away
Programming machines. Recently a factory robot crushed a woman against a wall
when she entered its work space. A closed casket funeral. If there is a need
to program a machine, who is responsible if there is a safety issue involved?
or even identifying there is one? The factory worker only trained to program?
The supervisor, with infamous pressure to get and keep production running?...
BTW, according to CBS, State regulators suggested a $7000 fine(!!!), and said
a lockout device could have stopped it.

~~~
gregpilling
I own a factory robot welding cell. It has triple redundant safety systems. To
make it operate while human accessible, you have to activate the safety
interlocks on both doors, pull the triggers halfway (but not all the way) on
the teach pendant, and then the machine will only move at 10% speed. Even at
10% speed, if the robot turns and the cabling on it swings around, it can give
you a good hit (from the welding cable on top). Would not be fatal, but it
does give you a good whack on the head (I have experienced this!! haha).

Also, machine operating and machine programming are totally separate jobs.
Programming is very high skill level, and operating is fairly low - my 9 year
old son and his scout troop spent one night operating it to get their robot
badge.

Why did the woman enter the work space, and how did she turn off all the
safety devices? That would take a fair amount of effort on my machine, to get
inside it while it runs. It could be done if you really tried, but it would
take some effort.

As for training - nobody, and I mean NOBODY, has had the skill or training to
operate that robot in the 9 years I have owned it. The operators were all
trained by me, the factory owner. And while I have lots of pressure on me for
production, an industrial accident will destroy that. Better safe than shut
down by OSHA.

~~~
a_thro_away
I understand the separation of programming and operating, as I am a programmer
as well as having studied automated automotive valve welding and grinding at a
leading supplier (friction stem and seat welding, among others). The point I
was making, though probably not clear I admit, was that a factory operator
could be seen as a "machine programmer" simply because they were given that
title by the production owners, and trained on the job as such. For example,
technicians regularly do electrician functions in large factories, and all
safety and liability issues that arise with that. And, not all factory robots
are contained in an enclosure, they are in free 3D space; what interlock would
you suggest to keep a human out? Visual, ultrasonic? I simply ask who takes
responsibility for general machine programming Safety if there is not a simple
enclosure interlock situation? BTW, she didn't get by an interlock; apparently
there was not one there - which is my point exactly. BTW, a previous fatal
incident the proposed fine was <$100k, not a shut down - that doesn't seem
much of a disincentive to me.

------
Manupok
You would think it would be the manufacturing plant that’s off by itself in
the middle of nowhere that doesn’t have access to a pool of skilled labor —
but it didn’t turn out that way.

