The inability to attract and retain talent is a top concern for manufacturers.
That’s the refrain manufacturers have preached for years, and according to a report prepared by Deloitte and The Manufacturing Institute, an estimated 2.4 million manufacturing jobs could go unfilled by 2028.
What’s behind the shortfall?
The short answer: a significant skills gap.
The opportunities are being created faster than employers can fill them, say the experts, despite an estimated $26.2 billion spend in 2019 on internal and external training programs for new and existing manufacturing employees.
The industry is doubling down on workforce training efforts and clamoring to develop pathways to evolve along with advanced technology, said Brian Davis, executive VP and COO at B&D Industrial, a distributor of industrial products and services.
His own company is not immune; it’s working to counter the issue by repositioning as a technical distributor and a service organization, all the while forging an innovative culture.
Serving on the boards of both the Power Transmission Distributors Association and the Bearing Specialists Association, Davis has a unique vantage point that allows him to gauge stress points across the power transmission/motion control industries.
He spoke with Machine Design about technological disruption, preparing for the next generation and what it might take to meet the shortfall.
Q: As a board member of both BSA and PTDA, what are the overlapping trends the power transmission/motion control industry faces?
Davis: From an industry perspective, a Venn diagram would show a total overlap. PTDA serves a broader distributor and manufacturer base, but both associations have members serving a manufacturing end-user. A major industry trend that has affected the associations for a number of years is consolidation, both on the manufacturer and distributor sides. As companies acquire smaller competitors the pool for membership in each association shrinks, and the ability of the associations to serve the needs of both very large and very small members is challenged.
Another trend is generational shift. The generation that is reaching retirement age had certain expectations of what value an association should provide and it differs from the expectations of the younger generation that’s taking its place. Associations have to be open to change to meet these evolving requirements in the same way that we as members need to be open to the needs of our customers. Determining what those expectations and requirements are is top priority for both associations in my opinion.
Q. How is automation affecting business processes? First, with respect to the industry at large. Second, at B&D Industrial.
Davis: Our industry or our company isn’t any different than other industries in that automation has had a huge impact. From an industry perspective, our customers are much more automated in the manner in which they produce their products. This has eliminated some applications we have sold parts into in the past, as well as opened up new opportunities for us to move into different lines of business.
Customers have also become much more automated in the way they use data. They have been able to better utilize technology to inform them of what critical components they need to have on hand, or close by. This has lessened the number of breakdowns in their plants, which at one time was key to our value proposition in the form of local inventory and 24/7 availability. We still have these services available to customers, but we have had to augment that with more value-added services.
Also, automation has affected processes in the way that we pay and are paid, the way that we check price and delivery—as well as order product from suppliers—and the way that we compile and store documentation. When you take a step back and think of the ways automation and technology have impacted the way we conduct business versus the way things were done 20 years ago, it’s difficult to come up with the things that have not been impacted by technology.
Q. The PTDA conducted research on the challenges in recruitment and retention last year. Can you describe some of the challenges your industry colleagues are facing?
Davis: The major one, which is challenging nearly every industry and company, is the amount of people reaching retirement age. Many of the key people, with many years of experience, are leaving at essentially the same time. The situation is exacerbated by the fact that our industry does not have the appeal, on the surface, that other industries have. There aren’t a lot of people who grow up dreaming of selling bearings! It is imperative for those of us in the industry to do a better job of telling the story of why the careers that we have to offer contain the same level of potential as others.
On top of that, we have to open up our minds to the way that we hire and how we treat new entrants into our companies. Many companies in our industry are blessed to have a lot of long-term employees––people who haven’t made a habit of jumping from job to job or even industry to industry. I believe younger people have different expectations. It seems like a lot of them value flexibility, family time, purpose beyond the “job.” We have to craft a message for these potential employees that shows them they can get these things in our companies, and we have to deliver for them once they become employees.
Q. B&D Industrial’s products and services extend across the supply chain, from OEMs to utilities and companies with automation and MRO needs. What are your company’s unique hiring and retention challenges and how do you address them?
Davis: One challenge is retention. In addition, a big part of our business is in gearbox repair and precision field service. We employ millwrights, mechanics and machinists in this business and these positions, particularly the ones that require skilled labor, are increasingly hard to fill. One reason is that there are less and less young people choosing a technical route and learning a trade. There aren’t enough skilled tradespeople to fill all of the roles that exist. It’s extremely competitive to find and retain these employees.
Another issue that I would say is probably more of a potential challenge than one we face day-to-day involves the engineers and IT people that we employ. These are critical roles in our organization. There is a movement with a lot of people entering the workforce in these areas—and probably other disciplines as well—who don’t want to be employees of any company. They prefer to work as contractors so they can work for multiple organizations and have freedom of movement. This is not the way we have ever desired to do business. We will have to be prepared to adjust to this one way or the other. I couldn’t tell you we are necessarily prepared for that today.