February 2020 Volume 2

OPERATIONS & MANAGEMENT

Apprenticeship Programs: Vital to Closing the Skills Gap By Virginia Rounds, Director of the ICATT Apprenticeship Program

The price of vacancy in the high-tech manufacturing industry is staggering, and while companies recognize this is a problem, the true cost has become such a part of the status quo that it is often overlooked. For example, due to factors ranging from overtime and excessive turnover to recurring unplanned downtime, one manufacturer in the Midwest calculated that vacancies in one of their departments cost them more than $6 million per year. Before investigating further, most of the executives were only considering the premium cost of the overtime in this department, which was a “modest” five figure sum. A significant hidden cost is lost opportunity and plateauing growth. In April 2018, U.S. manufacturers reported that though demand for goods is robust, an insufficient labor pool is one factor causing them to miss out on potential sales (Manufacturing.net 2018). Adding to the current wave of boomer retirements is the increasingly tight labor market. The most recent statistics from the Department of Labor (DoL) show a 3.5 percent U.S. unemployment rate as of December 2019. It’s now an employee’s market, where job-seekers have numerous options to choose from (BoL Statistics 2019). Automation is certainly a solution that many manufacturers are turning to, but who will maintain these automated systems? A long-term workforce development strategy to recruit, train, and retain employees is no longer optional. There is no one-size-fits-all solution, but there are organizations and programs chipping away at the problem. Companies must become much more attractive and present themselves in a way that they provide mid- to long-term career pathways instead of just job openings.

An apprenticeship program delivers exactly that: the first step for career seekers on their path, and a way to create the talent that manufacturers need. Tony Velotta, Organizational Development Leader at Scot Forge of Spring Grove, IL, states, “Workforce Development is evolving into finding resources that are currently not in the workforce instead of fiercely competing for those that are.This means starting in the high schools and developing students into the next generation workforce. The Apprenticeship program is beneficial to both student and the company. Graduating students obtain a near-debt-free degree and the company obtains a ‘career-ready’ employee.” The Structure of a Successful ApprenticeshipProgram An outdated apprenticeship structure in which the first few months are spent on menial tasks to “pay your dues” is simply not effective in attracting the bright young people the industry needs. Apprentices want guided, hands-on learning. The 2018 Training Benchmarks survey by the ASE Training Managers Council found that young automotive technicians age 18-24 prefer to receive training through practical, hands-on, instructor-led training, and via a mentor (ASE Training Managers Council 2018). The German Dual Education System for apprenticeships is one such structure gaining considerable attention in the United States, with its approach to training well-rounded and highly-skilled technicians. The philosophy of this time-tested system is to actively train apprentices both in the classroom and on the job. The on-the-job training is detailed and deliberate, and covers a broad base of skills which are applicable to multiple employers and not just one specific job. For manufacturers, the core competencies needed for, say, an industrial mechanic, are agreed upon by companies across multiple industries, and each employer has the chance to customize or expand these competencies to their needs. Through comprehensive exams, apprentices prove they have gained the skills necessary to succeed. According to the German American Chambers of Commerce, over 85 U.S. companies in thirteen states have apprenticeship programs certified to these German standards, and over 600 apprentices have been trained by the programs. According to Arnd Herwig, Vice President Development at Brose North America, which participates in Michigan's MAT2 program, the certification ensures a standard

FIA MAGAZINE | FEBRUARY 2020 47