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Sunday, 12 April 2015 22:00

Help Wanted: West Michigan employers grapple with shrinking labor pool, skills gap

Written by  MiBiz Special Report
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Put a group of local executives together to talk about their hiring needs and it probably won’t be long before the phrases start to fly.

“Talent gap.”

“Skills gap.”

“Talent drought.”

While the words they use may vary, local employers are nearly universal in calling it a “problem” that could stall West Michigan’s economic growth.

Last month, for example, a group of local manufacturing executives voiced their concerns at a breakfast event hosted by the Muskegon Lakeshore Chamber of Commerce.

The group, including executives from ADAC Automotive, Port City Group, Eagle Alloy and Swanson Pickle Co., talked extensively about the lack of qualified talent in the region and the long-term sustainability of the Muskegon area’s talent pool.

“On a day-to-day and month-to-month basis, it’s the technical talent drought,” said Muskegon panelist Jim Teets, president of ADAC Automotive. “We have a very difficult time replacing engineers and hiring new staff, and we need new talent like that all the time.”

The talent shortage isn’t just about technical talent either, according to John Workman, president of Eagle Alloy. Attracting qualified, entry-level talent has proven more difficult of late, he said, and could curtail future growth at the manufacturer of steel castings.

“We compete with ADAC and Port City primarily for talent,” he said. “What concerns me is how much the Eagle Alloy can grow with the employee base that’s [here].”

Those types of concerns were echoed two weeks ago at a Business Leaders for Michigan panel discussion in Grand Rapids with local executives from Meijer, Wolverine World Wide and Autocam Medical Devices.

The three companies operate in vastly different industries — retail, medical devices and footwear — but shared a common challenge these days: finding the right people.

The panelists attributed the challenge to a tightening labor market as well as to a mismatch of education to employer needs — the so-called “skills gap.”

“Our workforce doesn’t match the jobs needs out there,” according to Brian Long, an economist and director of supply chain management at Grand Valley State University. “The problem is that requirements for the labor force have shifted.

You’ve got high school graduates that don’t have any skills right now. That’s our gap.”

Recent economic reports seem to offer further evidence of the widening gulf between the labor supply and employer needs.

Federal employment numbers released this month showed that businesses added fewer jobs than expected in March, adding just 126,000 jobs versus the 245,000 jobs forecast, according to the Bureau of Labor Statistics.

Unemployment remained at 5.5 percent nationwide, and hourly wages were up just 0.3 percent.

The national numbers nearly mirror what Michigan is seeing, according to employers and economists, who see the talent gap as a hindrance to higher growth.

Construction and manufacturing, which represent two of the industries in West Michigan most affected by the skills gap, “showed little change this month” in the national BLS report.

It could get worse before it gets better, as local companies drain the already shallow labor pool further with new hiring in coming months, according to national studies of the West Michigan market.

National staffing firm Manpower Inc. projects that the Grand Rapids-Wyoming MSA will have the third-best hiring market on the nation in the second quarter.

In a quarterly survey by Manpower, 30 percent of respondents said they plan to hire in the April-to-June period. Nearly two-thirds will maintain staffing levels and 3 percent were unsure of their hiring plans.

Across Michigan, Manpower projects a “booming” job market with 27 percent of survey respondents planning to hire during the quarter.

The only MSAs with an outlook better than Grand Rapids’ were Boise, Idaho and Jacksonville, Fla., according to Manpower.

Part of the hiring growth will come from the small business sector, where owners are considerably more optimistic today than they were last fall, according to the results of a biannual survey by PNC Bank.

More respondents to the survey expect higher sales and profits through the summer and indicated that they are more optimistic about their own business prospects and local economic conditions.

Their hiring plans are “little changed” from the previous survey with 15 percent of respondents indicating they planned to add full-time employees. Just 1 percent of respondents said they intended to trim their workforce, down significantly from 19 percent last fall.

With the hiring challenges, more local companies have turned to temporary staffing. Grand Rapids ranked second nationally among metro areas for its concentration of workers in temporary employment, according to a recent report from jobs website CareerBuilder.com.

The Grand Rapids-Wyoming metro area had 24,739 temporary workers, which represent 4.7 percent of the total workforce, the CareerBuilder report notes. That’s more than double the national average of 2 percent. Only Memphis had a higher concentration of temp workers.

Nationwide, almost 3 million people work in temporary jobs, and that number is expected to grow 3 percent in 2015.

While temporary workers offer flexibility in the short-term, employers are calling for long-term solutions.

To help alleviate the workforce constraints, some employers such as Muskegon panelist John Swanson, president of Swanson Pickle Co., advocate for immigration reform to ease the flow of migrant workers to the region.

“There are too many (agricultural) products grown outside this country,” Swanson said. “Blueberries and asparagus are left in the fields. If you produce it in the U.S., you’ll manufacture it in the U.S.”

Others are looking to Michigan’s higher education institutions to work more closely with employers on programs for skilled trades.

Historically, West Michigan employers have been proactive in collaborating with higher education to address training challenges.

Organizations such as the Manufacturers Council, which is facilitated through economic development group The Right Place Inc., and Talent 2025 have worked to match up the region’s educational infrastructure to employer needs.

The state of Michigan also recently approved nearly $50 million in grants to community colleges for purchasing equipment and training students studying skilled trades.

Approximately $14.3 million was distributed to to West Michigan community colleges under the state’s Community College Skilled Trades Equipment Program (CCSTEP).

The CCSTEP comes in light of a reported talent shortage by manufacturers in need of skilled workers, according to a statement from Gov. Rick Snyder’s office.

“Manufacturing has created more than 114,500 jobs since 2009 and employers are still searching to fill thousands of available positions,” according to Chuck Hadden, president and CEO of the Michigan Manufacturers Association. “The (CCSTEP) provides Michigan’s next generation the equipment necessary to learn the skills manufacturers need.”

Leaders at the state level say getting businesses engaged in the training process is crucial to filling the gaps in the long term.

“It really is about employer involvement. I can’t stress that enough,” Stephanie Comai, director of the newly-formed Michigan Talent Investment Agency, said at the Business Leaders for Michigan event.

“We need employers to tell us what kinds of competencies and skills they need,” she said. “We need to make sure our dollars are being used most effectively, and it’s really getting that input from the employment community to identify where that investment will make the most difference.”

To help solve the talent issue, companies on the lakeshore panel said they have continued to work with local middle schools and high schools to educate students about careers in manufacturing.

ADAC Automotive’s Teets said that if manufacturers want to gain ground on talent, students need to have conversations with their parents about pursuing a career in manufacturing.

“It’s not your dad’s Oldsmobile anymore,” Teets of ADAC said. “It’s very high-tech on the shop floor so we need employees with advanced skills before they even get to the front door.”

This special report on talent was created using editorial content from the MiBiz Ticker. For daily updates on the region's business news, visit mibiz.com/news/breaking-news.

Read 3428 times Last modified on Monday, 13 April 2015 11:06

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