Skilled Worker ShortageThe equipment manufacturing industry’s skilled labor shortage is quite costly.

However, as it turns out, it could get even be worse in the near future. Two-year college enrollment is lagging far behind four-year colleges, and other technical vocations are dealing with a similar trend. So what does this mean for AEM members and their industry counterparts? In short, intense competition to acquire the services of the skilled labor candidates currently working today.

Equipment manufacturers desperately want to avoid falling victim to the ever-growing skilled labor shortage. In order to do so, they need to think long and hard about their strategies for recruiting employees, as the sources and methods they relied upon in the past may no longer work.

Causes of the Skilled Worker Shortage

  • A lack of people with the requisite “hard skills.” – In the not-so-distant past, a solid pool of candidates existed with the skills, wherewithal and motivation to work in the industry. That’s not so much the case anymore.
  • The repair technician shortage has always been a local problem. – In the case of repair technicians, many go away to school, but they want to come back home to find a job. As a result, dealerships hire great employees, only to see many of them quite a year or two later.
  • Parents push their children to attend four-year schools. – It as much the case 20 years ago as it is today. In many cases, however, young people would be better served to pursue two-year degrees that offer excellent career opportunities in certain occupations.
  • Recruiting often starts too late. – The vast majority of skilled trades simply haven’t been aggressive enough in their outreach to high school guidance counselors. The prevailing thought today is outreach must begin when students are still in middle school. These budding, young minds need to be exposed to the equipment industry much earlier than they are right now, and the same goes for their parents and teachers. When families and educators see eye-to-eye on the opportunities available in manufacturing, the likelihood is much greater that career and technical education programs (CTE) will continue to be offered.

Tips for Engaging in Earlier Outreach

Equipment manufacturers need to identify and begin recruiting local individuals well before they enter college. Doing so allows for students to secure a better understanding of companies in the industry prior to graduation.

When it comes to outreach, companies need to work and identify potential employees in their first year of school, versus days, weeks – or even months – before they graduate. Organizations should also strongly consider attending career fairs for not only graduating students, but also those just beginning college who may be seeking part-time or summer employment. In addition, internships are also a great option.

In short, there are many advantages to conducting student outreach earlier:

  • It allows for the opportunity to build better relationships with students
  • It gives both students and employers ample time to determine if things are a good fit
  • It allows students’ education to be tailored to the needs of the industry and specific job

Closing the Skills GapRemaining engaged throughout students’ academic careers is vitally important. Organizations can get involved with clubs and other student organizations, helping to sponsor events or provide guest speakers. Some companies also arrange field trips to either the company itself or other industry events, for example.

Avoid Bad Hires

Bringing in new employees costs a significant amount of money. According to According to Jerry Randecker of Jordan-Sitter Associates, an employee recruiting firm, costs can range from 16 percent for entry-level employees, to 213 percent for senior management. Those costs mount as a result of job postings, administration, employee training and everything else that goes along with hiring a new employee.

So with such large amounts of money involved, organizations simply cannot afford to make mistakes when it comes to hiring people.

Here are some core best practices that can help them find an ideal match:

  • Have a well-defined job description. – That allows the employer to know precisely what it is looking for.
  • Identify good candidates through multi-faceted recruiting. – Job postings, temp agencies, trade schools, specialized recruiting firms, etc.
  • Consider referrals and word of mouth. – Statistics show that many younger employees found their last job through a social network such as Facebook or LinkedIn. Internal job postings can also prove very effective these days. Local organizations and churches, etc. can also be viable sources of potential employees.
  • Have a plan and prepare for interviews. – Proper questioning of a candidate helps get beyond what they want you to hear and have prepared for.
  • Don’t rely too much on interviews. – Due diligence is important, but be choosy when it comes to scheduling in-person meetings.
  • Employee assessments are also important. – References, drug tests, criminal record, driving record. This is especially important when hiring lower-paying, entry-level employees.
  • Put a job offer in writing. – This is to make sure everyone is on the same page with respect to pay and benefits, etc.
  • Follow-up with employees daily, monthly and annually. – And it doesn’t have to be a formal review every time.

Online job boards such as Monster, Career Builder, Indeed and Craigslist are capable of yielding quality results, but companies need to expend some effort. These websites will often generate a large volume of applicants, but many are ill-suited to the various positions. So again, it’s important to have a well-planned recruitment strategy—complete with well-defined job descriptions and job requirements—in order to generate as high a concentration of good leads as possible.

Companies are having to worker harder than ever to assemble teams in the current low-unemployment economy. Having a good strategy and following proven best practices can help—with lasting, positive results. It just takes a little time and dedication to develop the strategy, along with a willingness to think a bit outside the box and recognize that what has worked in the past may no longer suffice.

This article appeared in a recent edition of the CONEXPO-CON/AGG 365 newsletter.

For more coverage of equipment manufacturing industry trends and issues, subscribe to the AEM Industry Advisor