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Reshoring: 6 ways to overcome shortages of skilled workers



A skilled machinist monitors the cut on a vertical turning center.

A skilled machinist monitors the cut
on a vertical turning center.

When a manufacturer brings production home from overseas, how does it find the skilled workers needed to staff its facilities? An increasing number of manufacturers have been finding sound economic reasons to return to the home base, after spending the last decade or two offshoring production to low cost countries in Asia and elsewhere. Problems relating to quality, communication, transportation costs and delays, worker exploitation, culture differences and more have forced a rethink of the supply chain.

But once having set up production stateside, another problem looms. With a decade of job losses in manufacturing positions, skilled workers are hard to find. This brings them to a paradox – unfilled jobs in an economy with high unemployment. These unfilled openings are not nurses or engineers or web developers, as an article in Forbes last year pointed out, but welders, electricians, machinists, tool & die makers and other similar skilled trades. All these are essential to manufacturers’ operations. So what is a manufacturer to do?

Some specialists have suggestions. In a speech last year to the Toronto Board of Trade, Michael Denham, Managing Director of Accenture in Canada, outlined some strategies that can be implemented, following a survey of 100 companies.

Reinvent the company

Traditional company structures based on a line-and-staff organization with a rigid hierarchy may not make the best use of skills already available in the company. An organizational structure that is more flexible and career tracks for employees that focus on skills rather than functions can open opportunities. For example, a skill center with people who have analytical skills can support operations such as finance, HR, logistics and operations.

Reassess employees

Hidden talent in existing employees needs to be uncovered. Employees frequently have skills that their employer is not aware of. Employee capabilities should be surveyed. One fabricator found that a shop worker, an immigrant from the Philippines, was a registered architect in his home country. He was moved into the estimating office of the engineering department to fill a gap in staffing.

Recruit capacity to learn

Job descriptions tend to be too narrow, requiring very specific skills which are hard to find. On the other hand, hiring people with the aptitude for the skill and the capacity to learn quickly may access a much broader group of candidates. New hires go straight into training programs where they learn the specific skills needed.

A candidate showing strong math skills and an aptitude for quick learning may not yet be an electronics technician but will respond well to internal training. Accenture identified leadership, problem solving, analytical skills and technology skills as those most needed within the organizations surveyed.



Redeploy skills

Skills utilized in one sector may be transferable to another. Experience in one industry may have close similarity to another.  Skill sets may be common to different positions.  Capital intensive industries are more used to redeploying employees, since when a capital intensive operation such as a mine comes to the end of its useful life or shifts from exploration to operation, employers will redeploy their skilled workers to other positions or locations.  Manufacturers of equipment and supplies for utilities may find that forestry workers have the right knowledge and skills for their operation, for example.

Some other strategies have been set out by Darrell M. West, vice president and director of  Governance Studies and  founding director of the  Center for Technology  Innovation at Brookings.

Retraining

By collaborating with training institutions, industries can help unemployed workers to be trained in the skills needed by employers.  As the face and technology of industry changes, new skills are needed.  In addition to economic swings, unemployment can frequently be traced to new technologies that need new skills.  Workers may not see the need themselves, only being aware that it gets more and more difficult to get hired.  Industries and institutions need to be proactive to provide for upskilling of workers and to make them aware of the need of ongoing training.

Foreign workers

A simple reality is that if there is a shortage of workers with certain skills then bringing in foreigners with those skills will complement our workforce, not compete with it.  It is a fallacy that every job for an immigrant means one less job for an American.  Immigrant workers often complement American workers, enabling hiring of more Americans.  The Philippine architect mentioned above meant that much more opportunity for other employees that were dependent on filling the opening.  It should also be remembered that immigrants, by the very fact of having taken the step of uprooting their lives for another country, are generally energetic and positive people with initiative.  The National Foundation for American Policy found that almost half American startup companies were launched by immigrants and forty percent of the immigrant founders in the survey entered the United States as employment-sponsored immigrants.

Companies will face new challenges as reshoring picks up tempo but the results, providing they are properly planned for, will be beneficial.

What methods have you found to overcome skills shortages in your industry?

 



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