Some recruiting methods: higher wages, tax incentives for those relocating and the forgiveness of student loans, as well as enhanced training for students, new recruits and current employees.
They call it the “Not So Heavy Metal” tour. It’s a lighthearted effort by Minnesota-based Alexandria Industries to introduce middle and high school students — as well the general public — to manufacturing.
While the name is humorous, it belies an issue that is anything but. The component manufacturing company, with about 550 employees roughly two hours north of the Twin Cities of St. Paul and Minneapolis, faces an acute problem affecting many rural manufacturers: a shortage of workers to fill skilled and unskilled positions.
The company, which supplies manufacturers in the medical, automotive and defense industries, among others, has at least 50 unfilled jobs, and its predicament is not unusual.
“It doesn’t matter whether the company is in Michigan, Wisconsin, Texas or Pennsylvania,” said Tom Schabel, chief executive of Alexandria Industries. “One of the top issues is the difficulty of finding people.”
Skilled positions can remain open for months and even unskilled positions can take 60 days to fill, he said.
Shortages may seem counterintuitive, given the widespread fear that automation, robotics and offshoring have all reduced employment in manufacturing. While jobs in absolute numbers have declined from a decade ago, the sustained economic recovery, a lack of skilled workers and the retirement of many baby boomers have led to open positions. Even though the gyrating tariff environment is causing anxiety across industries, manufacturers are still hiring.
But up to 2 million skilled jobs could go unfilled by 2025, according to a 2015 report (the most recent data available) from the Manufacturing Institute, a nonprofit affiliate of the National Association of Manufacturers.
As a result, the previously unthinkable has begun to happen: A third of companies surveyed by the Manufacturing Institute reported that they had already turned away new work because of a lack of manpower, according to Carolyn Lee, the group’s executive director.
To address the shortages, manufacturers, as well as state and local governments, are increasing recruiting efforts. Although no statistics are available to analyze their effectiveness, these measures include higher wages, tax incentives for those relocating and the forgiveness of student loans, as well as enhanced training for students, new recruits and current employees.
Companies are also offering perks like on-site day care and health care. Alexandria Industries, for example, offers a free health clinic within a block of its facility. “While it was initially an attempt to deal with escalating health care costs, it is increasing a recruiting and retention tool” for workers and their families, Schabel said. Employers like 114-year-old Wigwam Mills, based in Sheboygan, Wisconsin, offer cash bonuses to employees who bring in new recruits who stay at least 60 days, said Thomas Wheeler, president and chief executive.
Another stopgap measure is to increase overtime. In Minnesota, Schabel said, getting employees to work extra hours is usually not difficult during the winter. Summer, however, is another story, when residents take advantage of the nearby lakes and rivers. As a result, Alexandria Industries recently introduced a program in which every employee, including Schabel, was required to work eight hours of overtime per month.
Many companies, in addition, are encouraging their graying workforce to postpone retirement or, in some cases, return to work as consultants or part-time contractors.
To appeal to a younger generation, some companies are promoting greater collaboration among teams as well as renovating their cafeterias and even installing amenities like pool tables.
Some are taking a page from Silicon Valley, investing in Wi-Fi-enabled buses to ferry workers from greater distances. “We have a lot to sell in terms of integrity of our business, but we need to get creative” to bring the workers here, Wheeler said. His company will begin to deploy buses in the fall to provide transportation for those who commute from Milwaukee or Green Bay, Wisconsin.
Most important, Wheeler added, “while we need to create an environment that is safe and well run with competitive compensation and benefits, that alone isn’t enough. We also need to offer a path for career growth.”
Local state and municipal governments are also adopting financial incentives to entice workers to move or return to their rural roots. Colorado Jump Start is a state-run program that waives income taxes for those who relocate to rural areas of the state for four years. Businesses that locate in distressed areas can obtain relief from a range of state and local taxes for up to four years.
Kansas has a two-pronged approach. It has declared 77 counties as rural opportunity zones, and workers relocating to any of those areas may qualify for help with student loan repayment up to $15,000 or may be eligible for a state income tax waiver up to five years. Vermont recently enacted legislation to pay up to $10,000 for those relocating to the state who work remotely for companies based elsewhere.
Longer term, both private companies and state and local governments are focusing on training, whether on site or by partnering with local secondary schools as well as nearby colleges. Determining that curriculum can be difficult, said Christopher Chung, chief executive of the Economic Development Partnership of North Carolina. Industry often evolves faster than education providers. “As a result, there’s always a lag in what industry needs and what the education system is cranking out,” he said.
There’s also the risk that the training is too general for a skilled pool, John Molinaro, chief executive of the Appalachian Partnership for Economic Growth, based in Ohio, said. He advocates for so-called upskilling — where current employees are trained to take on more sophisticated work.
For students, the training can be high tech. In Campbell County, Tennessee, for example, students don technical gear and use tools to learn welding skills with a twist: Their initial introduction is through a virtual reality computer program, said the deputy mayor, Andy Wallace.
Companies are also taking chances on candidates who lack experience. Several years ago, Sheldon Burslie, now 28, moved away from his Twin Cities roots with his young family. Although he had neither a college degree nor a manufacturing background, Alexandria Industries hired him and provided technical, as well as leadership, training. Six years in, he has been promoted and plans to stay “until I retire.”
Dana Jordan, president of Cascade Rescue in Sandpoint, Idaho, described a man who walked in off the street and offered his services. “He told me that he worked on a farm all his life, but with a family he needed more income. I told him I don’t have any cows, but I can use an entry-level assembler. He’s the salt of the earth, and six years later, he’s still here.”
In addition, some companies are hiring former prisoners. BMT Manufacturing, a company in rural Tennessee that makes trailers, has a program for inmates nearing release to train them in technical and life skills, said Keith Simpson, its president. The company has grown and will soon expand its plant in Jacksboro, Tennessee, in part with former prisoners.
Veterans are another source of workers, but have often been overlooked. That is beginning to change. The Defense Department already has what it calls a skills-bridging program for those nearing the end of their enlistments. In addition, the Manufacturing Institute in January introduced a new program, Heroes MAKE America, to offer more advanced training in manufacturing skills for people leaving the military; the program also would connect them with prospective employers, Lee said.
In January, the first program began in Fort Riley in Kansas; a second site will open this year in Texas at Fort Hood.
Concentrating on the armed forces has another benefit: Veterans appear to be more willing to relocate. “A significant number of armed forces say they want to go where there is opportunity,” Lee said.
It’s unclear whether other younger workers are willing to go rural; there’s a perception that recent college graduates prefer metropolitan areas. But that, Molinaro said, is an urban legend. With short commutes and open spaces, these areas can attract workers of all ages as long as suitable, affordable housing is available. Although Burslie of Alexandria Industries says he misses the proximity to his extended family, he earns more and his costs, such as housing, have been “slashed in half.”
Still, manufacturing has an image problem.
Students may shy from pursuing manufacturing jobs because of the misconception that it is “dark, dirty and dangerous work,” Chung said. The reality can be very different. Modern, advanced factories incorporate automation and robotics in brighter spaces, he said.
Lee said that while 80 percent of those surveyed think it was important to invest in manufacturing, “only a third want their children to pursue manufacturing careers.”
To counter those perceptions, many factories open their plants to the public to show what really goes on, Schabel said. Other communities, like Gaston County, North Carolina, highlight high school students who accept jobs in manufacturing by having a “career signing day,” a nod to the annual events in many communities in which star high school athletes announce the colleges they will attend.
Skilled foreign labor remains an attractive alternative, although often difficult to obtain, especially in the current political environment. Wheeler of Wigwam says his company has retained a lawyer to apply for work visas for mechanics, who are in particularly short supply. He is focusing on recruiting from Honduras, because he became familiar with their high level of skill when working at another company, he said.
Wheeler hopes to bring some to Sheboygan. “The hardest thing will be the winters,” he said, “when they’re here and can’t feel their nose or their toes.”