U.S. Manufacturers Say There Aren't Enough Skilled Workers To Fill Job Openings
U.S. manufacturers are failing to fill thousands of vacant jobs, surprising when 14 million people are searching for work.
Technology giant Siemens Corp., the U.S. arm of Germany's Siemens AG (SI.N), has over 3,000 jobs open all over the country. More than half require science, technology, engineering and math-related skills.
Other companies report job vacancies that range from six to 200, with some positions open for at least nine months.
Manufacturing is hurt by a dearth of skilled workers.
"What we have been saying for quite a while is that even though there is a high unemployment rate, it's very difficult to find skilled people," said Jeff Owens, president of ATS, a manufacturing consulting services company.
A survey by ManpowerGroup found that a record 52 percent of U.S. employers have difficulty filling critical positions within their organizations -- up from 14 percent in 2010.
Owens said his company, which counts manufacturing behemoths Caterpillar (CAT.N) and Motorola among its clients, has at any given time about 200 open positions .
"We are pro-actively working to fill them. It can take 90 to a hundred days, probably, to fill them," he told Reuters. "We are creating jobs. We just don't necessarily have the right people to fill them."
On average, companies usually take seven weeks to fill job openings.
MISMATCH OF SKILLS AND JOBS
Most of the jobs hard to fill are for skilled trades, Internet technology, engineers, sales representatives and machine operators.
Yet American colleges are producing fewer math and science graduates as students favor social sciences, whose workload is perceived to be manageable, leading to a skills mismatch.
Math, engineering, technology and computer science students accounted for about 11.1 percent of college graduates in 1980, according to government data. That share dropped to about 8.9 percent in 2009.
An aging population of skilled workers is adding to the problem. As the baby boomers retire, there are fewer skilled workers available to replace them.
"Many of the younger kids that are coming out of college have been discouraged to go into manufacturing," said Dennis Bray, president and CEO of Contour Precision Group.
"A lot of the college graduates have chosen a curriculum and degree that does not give them the necessary science and math skills to be of immediate benefit to companies such as ours."
Contour Precision, based in Clover, South Carolina, does contract work for the energy and aerospace industries. It is currently looking for six technicians. It has had positions open since last year.
Unemployment in manufacturing is at 8.4 percent, below the overall rate of 9.1 percent. According to the Labor Department's latest Job Openings and Labor Turnover survey, there were 240,000 open jobs in manufacturing in August up 38.7 percent from a year ago.
The problem is sufficiently serious that businesses are pushing Congress to address the issue of visas and help them hire more high-skilled foreigners.
STRUCTURAL UNEMPLOYMENT?
These companies' inability to fill open jobs suggests that part of the unemployment problem confronting the nation could be more of a structural nature rather than a downturn in the business cycle.
Two years after the end of the worst recession since the Great Depression of the 1930s, about 14 million Americans are still unemployed.
In September, nearly 45 percent of them had been out of work for six months or more. The longer people are out of the workforce, the more dated their skills become, making it even harder to reintegrate them into the labor market.
The types of jobs available are also changing.
Medium-skilled repetitive tasks that can be computerized continue to disappear. First, it was from the factory floor, but it also affects the back office, where processing and support jobs are declining.
The strongest job growth is concentrated in healthcare and the scientific, technical and computer fields, which usually require at least a post-secondary education.
"The old jobs are not coming back. We need to invest in education and training to get people prepared to fill these high-skilled, high-wage jobs of the future," said Eric Spiegel, president and CEO of Siemens Corp.
Siemens is recruiting in states where unemployment is high. Pennsylvania, Florida, Texas, North Carolina, New Jersey, California, Illinois, Georgia and New York have jobless rates that range from 8 percent to 12.1 percent.
According to the Conference Board, workers with computer and math or science skills have a far better chance of getting a job, with one worker applying for every three of these types of jobs advertised. In contrast, there are roughly three people for every advertised job in sales.
PLENTY OF WELL-PAYING JOBS
Few of the thousands of jobs open in the manufacturing sector are low-wage positions.
Workers at the very low levels can earn as much as $30 an hour, with annual salaries for engineers ranging from $75,000 to $100,000. At Siemens, the average potential salary offered for its open positions is $89,000 a year.
Manufacturing lost its appeal during the 1990s when companies started moving production to Asian countries like China, in search of cheap labor. But rising wages in China are forcing some companies to bring production back home.
Although manufacturing accounts for about 12 percent of U.S. gross domestic product and about 10 percent of total non-farm employment, it has been the main pillar of support for the economy and one of the highest-paying sectors.
The shortage of skilled workers is also compounded by the depressed housing market, which is making it tough for Americans to relocate to where the jobs are.
The housing market crash has left many people with home loans owing financial institutions more than what their houses are worth, making it difficult for them to sell.
BRING IN THE ARMY
In hopes of addressing the skills gap, companies such as Siemens and ATS are turning to the military, targeting veterans. Siemens is embarking on apprenticeship programs, while ATS is running training programs for young people.
"We have found that veterans have extensive technical training and experience that they gain through military service, and these skills are extremely valuable to us and match up well with many of our over 3,000 open positions," Spiegel said.
Siemens has hired 450 military veterans so far this year.
Others are teaming up with professional bodies like the Society of Manufacturing Engineers (SME), which has developed online courses to support its members.
"We are not filling the pipeline with enough candidates for these positions. This problem has been ongoing for the last three or four years," said Mark Tomlinson, CEO of the Society of Manufacturing Engineers.
But the long-term solution lies in revamping the nation's education system to meet the current challenges and invest more in vocational training, industry leaders say.
"Often people say we do have vocational training, but it's geared toward yesterday's technology and yesterday's job opportunities," said ATS's Owens. "I am not sure the educators are on the mark with what exactly needs to be taught for today's environment."
(Reporting by Lucia Mutikani; Editing by Jan Paschal)
Copyright 2011 Thomson Reuters. Click for Restrictions.
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First Posted: 10/12/11 07:06 PM ET Updated: 12/12/11 05:12 AM ET