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Why the workforce is the best investment manufacturers should make

There is an emplyee working to cut a cold hard piece of steel.
30 Dec 2013

Manufacturers can spend valuable resources partnering with the best suppliers, building factories in strategic positions and investing in innovative technology, but without a strong, skilled workforce, product quality isn't going to be up to par. Many businesses understand the importance of employing an experienced, high-performing workforce, and an article by Joseph Ricciardelli, a founding partner at Tecla Consulting, noted fostering talent among the workforce can make the most difference in leaning production processes, improving an entire organization's efficiency and implementing low cost manufacturing. In fact, a report from the International Labour Office in Geneva suggested a company's workforce is one of the keys for it to achieve sustainable, balanced growth.

The US' skills problem
Yet too many North American manufacturers are having trouble finding these talented workers in the U.S. In fact, according to The New York Times, a new report by the Organization for Economic Cooperation and Development found America's workers aren't the best in the world. By examining literacy, math skills and problem-solving through assessments, the report noted the U.S. workforce doesn't outperform other countries. While The New York Times suggested American companies benefit from employing foreign talent, yet relying on highly-skilled professionals immigrating to the U.S. isn't an effective long-term strategy.

Jonathon Rothwell, senior research associate at the Brookings Institution, told The New York Times many companies mistakenly believe that since the U.S. economy is recovering from the recession, it will be easier to find skilled workers.

"The recession did not fundamentally change the structure of the economy in terms of the supply and demand for skills or education," Rothwell said. "Before the recession, inadequate education was a major problem. It continues to be."

Rothwell also suggested the issue is worsening. Only 32 percent of Americans over the age of 25 have a bachelor's degree, despite 43 percent of new jobs requiring the qualification. 

When it comes to American manufacturing, the problem is even bigger. According to an outlook of the manufacturing industry for the new year by accounting and business advisor firm Habif, Arogeti & Wynne, despite many manufacturers reshoring their production processes, 67 percent of those that are looking for full-time staff are having issues finding workers with the needed skill sets. While baby boomers are remaining in the workplace longer, many were laid off from their skilled trades during the recession and found jobs elsewhere. In essence, workers are out there with the skills manufacturers need, but aren't returning to their previous fields. In fact, HA&W noted the skills gap goes even farther to the 1970s when manufacturing jobs declined in the U.S. Because more manufacturers are having trouble acquiring the right workers, many aren't able to innovate and may find themselves left behind are competitive manufacturing heats up across the globe.

Finding workers to invest in
U.S. manufacturers don't have to continue struggling to acquire the workers with experience in casting, welding and engineering. According to Ricciardelli, in times such as these manufacturers need to move quickly in order to remain profitable. For American companies, expanding to Mexico is the logical next step to find the workers needed to maintain revenue streams and continuously move the business forward. Mexico's workforce is dedicated to manufacturing, with universities and colleges dedicated to fostering engineering skill sets located near industrial clusters. Manufacturing students in Mexico often undergo internships at maquiladoras, giving them hands on training in real manufacturing environments. Offshore manufacturing in Mexico allows companies to remain close to the U.S. while keeping costs low and productivity high. For many American manufacturers that shy away from offshoring their production process to Asia or Europe, expanding to Mexico is the best way to remain close to the U.S. and still employ strong workers.

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