While the labor crisis lingers in West Michigan, manufacturers are spending millions of dollars on upskilling their incumbent employees to keep up with growth.
Manufacturers nationwide are set to spend $26.2 billion on training initiatives for employees in 2020, according to the Manufacturing Institute. In Michigan, internal upskilling and training programs have been growing across the state throughout the current economic expansion.
The upskilling programs at Marne-based metal fabricator DeWys Manufacturing Inc. develop “organically” based on the skills needed in the company’s shop, according to Laura Preuss, director of workforce development at DeWys.
“(Upskilling) allows the company to fill positions differently than ever before,” Preuss told MiBiz.
Workforce development at DeWys, which the company calls DeWys University, started with onboarding training for welders in 2012 and has grown to cover all aspects of the company, including a new leadership and management training that the company has developed in the last 18 months.
The company’s investments in training grow by about 5 percent on a year-over-year basis, according to Preuss. While she did not disclose how much the company has spent on developing the DeWys University programming, she said the firm does not cap spending on workforce training nor does it have a specific budget that it must work within.
“It’s not about if we’re going to do it or how much money is involved,” Preuss said. “Our return on investment is looked at from the numbers … every month. From profits to our utilization numbers to our quality numbers, if our numbers are doing well, that’s a reflection of how we’re performing inside the company.”
DeWys has three full-time trainers and three part-time trainers on staff at the company. The vast majority — around 80 percent — of the company’s 220 employees have been through some form of skills training at DeWys University, Preuss said. About 40 percent of the programming is focused on upskilling existing employees and the rest is training for new hires.
“It’s something we have decided as a company is part of our values,” Preuss said. “This has become who we are.”
The state of Michigan has also invested heavily in workforce development programs.
The Michigan Economic Development Corp., which is supported through public and private funds, is the state’s economic development agency and marketing arm for workforce development efforts. The MEDC also provides an online interface, Pure Michigan Talent Connect, that facilitates matching job seekers with employers as well as training opportunities.
The state also operates 16 independent regional Michigan Works! centers that receive local, state and federal support.
Through Michigan Works!, the state has given more than 3,136 companies awards averaging more than $31,000 each to spend on talent development through its Going Pro program.
West Michigan employers have historically received the biggest slice of the state’s Going Pro funding. Nearly $10 million was distributed to employers in Allegan, Barry, Ionia, Kent, Montcalm, Muskegon and Ottawa counties in 2019.
Employers that receive the funds must also match the state’s investment with cash or in-kind contributions in support of the training project, effectively doubling total investment in the training.
More than 350 companies in West Michigan applied for 2020 Going Pro funding, according to West Michigan Works!. However, Gov. Whitmer line-item vetoed $37.3 million in funding for the Going Pro program last October in a budget fight with Republicans. The funding has yet to be restored.
However, lawmakers last week negotiated a deal with the governor that ties partial restoration of Going Pro into the state’s emergency coronavirus response. The bill, which passed in the state House on Tuesday, includes $15 million in Going Pro funds as well as funding for the state’s Pure Michigan tourism campaign, school programs, pending legal settlements and partial restoration of many more of the budget items that were vetoed in October. As of press time, the bill was expected to pass in the Senate and be signed by Gov. Whitmer.
Muskegon-based tool manufacturer Anderson Global Inc. will spend about $316,000 on training in 2020, according to Angel Ball, human resources director at the company.
Anderson Global sticks tightly to its annual training budget and any workforce development grants it receives are “on top of that,” Ball told MiBiz.
The company received $114,890 in Going Pro funds in 2019.
“Because the competition is so crazy with China and Mexico and other low-wage nations, we have to keep up on the latest and greatest to be competitive,” Ball said. Continuous training opportunities also help with employee retention, she added.
Anderson Global has provided on-the-job apprenticeships for more than 40 years but has more recently developed upskilling programs. Most of the company’s 100 employees now go through skills training each year, according to Ball. Anderson Global also pays for some of its employees to attend Muskegon Community College.
However, as growth in the manufacturing sector slows, the company has started to apply for more state and federal grant funding to develop its workforce programs.
“The automotive industry has not had as profitable of years recently, so we’ve been applying for the grants to invest more in our incumbent workers,” Ball said, adding that the company has been training its manufacturing workforce in “technology that is changing,” including computer-aided design (CAD) programs.
While it’s tough to calculate a direct return on investment for skills learned, Anderson Global often correlates increased efficiencies to its training programs, according to Ball.
“What we put into training is an essential component in staying competitive in this international marketplace,” she said.