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Workforce Pipeline: A Smart Resolution: A Workforce Health Check


Healthy resolutions are rampant this time of year. In our personal lives, we pledge to eat better, join the gym, and schedule an annual physical.

As we kick off 2015, now is also the perfect time to take stock of the health of your company’s workforce, and resolve to put time and energy into developing the most important asset you have: people.

That is one of the secrets of world-class companies – those that excel operationally and financially. Research shows that what sets these companies apart from their competitors is an understanding of, and commitment to, investing in their employees, also known as “human capital.”
  Workforce Pipeline
While there are several components to developing human capital such as talent acquisition, performance management, rewards and recognition, success planning and process system design, one critical area is workforce development. The findings are clear: model companies are outperforming others in large part because they manage and train differently.

With just 39% of manufacturers anywhere close to world-class manufacturing status, according to Tooling U-SME’s 2014 Manufacturing Insights Report, there are plenty of opportunities for manufacturers of all sizes to capture new productivity and profits through a focus on human capital.

The Skills Shortage

To demonstrate the urgency of this focus on human capital to drive competitiveness, it is important to consider the dramatic existing and pending talent shortages. As predicted, the skills gap is a major challenge for many manufacturers, due to limited employee pipeline, a retiring workforce, reshoring and the changing pace of technology.

According to The Boston Consulting Group (BCG), without aggressive action, the next decade is expected to bring a potential shortfall of 875,000 machinists, welders, industrial-machinery mechanics and industrial engineers. 

While the exact number of unfilled jobs is often debated, this shortage of human capital is impacting manufacturers today. Nine out of ten manufacturers are having difficulty finding skilled workers and they say this is directly hurting the bottom line, according to an SME survey. In fact, nearly 60% of the survey respondents said the gap in skilled labor impacted their company’s ability to grow.

This impacts our nation, too, as manufacturing is an important driver for the US economy and for the country to remain competitive. For continued growth, manufacturers must have access to skilled labor.

With business success on the line, the choice to focus on training and development should be clear. For instance, a well-trained employee will more effectively utilize the capability of new equipment, leading to increased innovation and productivity. 

This is important as we see companies beginning to invest again in new equipment. According to a recent article in The Wall Street Journal, the average age of industrial equipment in the US has risen above 10 years, the highest since pre-World War II.  With capital spending predicted to show improvements of 5.3% in 2015, it will be critical for employers to train workers on this new equipment to take advantage of technical advances for continued innovation.

Consider that BEST organizations—organizations recognized by the Association for Talent Development (ATD) that demonstrate enterprise-wide success as a result of employee learning and development—average 57.7 learning hours per employee vs. average companies that spend only about half of that: 30.3 learning hours per employee, according the ATD 2013 State of the Industry Report.

The best training programs tie directly to the bottom line, helping boost productivity and profitability, while reducing expenses related to overtime, downtime, waste, and more.

Beware Execution Gaps

In some cases though, there is not alignment between objectives that will drive a business forward and action. For instance, according to the Manufacturing Insights Report, many manufacturers are struggling with three critical initiatives, despite their importance to world-class manufacturing status and business success. For success in these areas, companies need to have the right people in the right places with the right training.

These areas are:

  • Continuous improvement—improving quality, cost, speed, value, and safety
  • Workforce development—building a workforce with skills and motivation
  • Production planning for new products—moving new product designs efficiently through production and into the market

There is a major threat to competitiveness, however, due to the existence of serious “execution gaps” between high executive awareness of the importance of these three initiatives and low support (i.e., resources, investments) for their implementation.

For instance, 85% of manufacturers rated continuous improvement as important or highly important. Yet many of these executives are not supporting their continuous improvement initiatives with investments, resources, training, leadership commitment, etc.—and thus, are not succeeding with their efforts.

It’s increasingly clear that training and professional development are not only vital to manufacturing success related to these three initiatives, but essential tactics in meeting the growing talent challenges.

Boosting the Bottom Line through Training

A structured training program using best practices based around competency models like Tooling U-SME’s Competency Framework, blended learning which combines theory and application, and a data-driven approach to measuring, tracking and assessing learning can fill existing gaps and prepare the workforce for the future while meeting business objectives.

As we enter the New Year, we encourage manufacturers to take a free Workforce 2021 Readiness Assessment to determine their ability to face the growing talent gap. Through answering a series of questions about your company’s knowledge retention, readiness of future skill requirements and the status of employee development programs, your company will be able to assess its ability to meet the workforce challenges that are quickly approaching.

The bottom line is a well-trained workforce is a competitive advantage, allowing companies to drive innovation, customer satisfaction, quality, productivity and growth. The beneficial by-products are engaged and loyal employees, satisfied stakeholders, and a thriving economy.Jeannine Kunz


Jeannine Kunz is managing director of workforce and education at SME, where she leads a team dedicated to the ongoing education of the manufacturing workforce. Tooling U-SME, a  division of SME, can be found at


This article was first published in the January 2015 edition of Manufacturing Engineering magazine. Click here for PDF.


Published Date : 1/1/2015

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