At Hayes Manufacturing southeast of Traverse City, vice president Penny Challender watches nervously as customer orders pile up.
A year ago, the firm had 563 unfilled orders as of Aug. 8.
“Today,” Challender said in early August, “I have 976. We are late on some orders, orders we should not be late on.”
The problem: A shortage of skilled machinists to turn out the flywheel couplings, bearing supports and drive shafts the firm makes for industrial applications. It has sufficient demand to start a second shift ‒ if only it could find the workers.
“We talk about it every week,” she said.
“We have been warned about this for 20 years that this is coming, a shortage of skilled machinists. Now it’s here.”
And while the lack of skilled labor is a critical issue statewide, it’s especially troublesome for rural firms as they compete with urban employers, often for the same workers, forcing companies to seek innovative ways to lure applicants through the door.
“We are in Fife Lake,” Challender said, describing a quiet community of about 500 people some 30 minutes from Traverse City and Cadillac. “It is about as rural as it can get.”
“They Hoover up every graduate that comes out of there,” she said.
It’s a game of musical chairs that often leaves rural Michigan firms out of luck, said one regional economic advocate.
“We have a number of manufacturers in our region, which is rural, but many of our manufacturers are in very rural areas of this region,” said Matt McCauley, executive director of Networks Northwest, a planning body for 10 counties in the northwestern Lower Peninsula. “They could be on a county road that is miles and miles from any nearby community.”
That makes it tough to compete with urban employers for workers inclined to live in cities or metropolitan areas – and don’t want to drive 30 miles to work. He noted as well that lack of fixed public transportation and adequate child care has long been an issue in the region, again putting rural employers at a disadvantage compared to many metropolitan firms.
Kevin Schlueter, CEO of Kalkaska Screw Products: “There’s not people out there with technical skills, especially in rural areas.” (Courtesy photo)
Manufacturers in wide swaths of rural Michigan are further handicapped by a notable disparity in the scope and quality of high school vocational programs offered by state’s 56 intermediate school districts. Of those districts, 23 have no dedicated vocational property tax millage and often struggle to support diverse career training programs.
Companies making their own luck
As a result, some firms and manufacturing groups in Michigan are seeking innovative solutions to this workforce dilemma.
Grand Haven-based Shape Corp., a steel and aluminum manufacturer, is investing $300,000 over three years to bring a manufacturing program to Grand Haven High School. It’s a partnership with the Michigan Manufacturers Association and Southfield-based SME Education Foundation, which aims to spread similar programs throughout the state.
“The idea is to find out what skill is needed and take that to the local high school,” said Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association.
“This is about creating a program that will create a talent pipeline for the manufacturer but also a career path for kids.”
At Graceland Fruit, a specialty dried fruit manufacturer in Frankfort, south of Glen Arbor, that employs about 210 workers in Michigan, officials heard a consistent refrain on what workers need.
“Day care, day care, day care,” said Doug Rath, vice president of human resources for Graceland. Rath said it’s more an issue for its entry level, unskilled workers than skilled workers, with local daycare providers at capacity and with waiting lists.
Team Elmer’s, a construction firm based in Traverse City, uses a kitchen sink approach to find workers. With about 465 workers, it has about 60 unfilled positions – everything from road crews and mechanics to bulldozer, excavator and certified crane operators to heavy haul and concrete mix truck drivers.
It’s turned to geo-fencing – targeting potential hires with mobile tracking technology – as well as online postings on sites like Indeed, Pure Michigan Talent Connect and at colleges and universities. It uses Facebook, Snapchat and Instagram to post openings. The firm also partners with a local community college to promote construction as a career option to high school and middle school students and sponsors an event at the career technical center that features hands-on demonstrations about the construction trade.
Rath said the company is exploring the prospect of opening a day care center – perhaps in partnership with an existing local provider – to provide that service for its workers.
“If we could provide day care for our staff, that could help us attract and retain people,” he said.
Outside of Michigan, manufacturers – as well as state governments – are turning to other remedies:
- In rural central Minnesota, metal-and-plastic manufacturer Alexandria Industries offers a free health clinic near its facility. With about 550 workers, it has at least 50 unfilled jobs.
- Company CEO Tom Schabel told the New York Times the clinic is a “recruiting and retention tool” for workers. “It doesn’t matter whether the company is in Michigan, Wisconsin, Texas or Pennsylvania. One of the top issues is the difficulty of finding people.”
- In Sheboygan, Wisc., north of Milwaukee, Wigwam Mills offers cash bonuses to workers who bring in new recruits. The socks manufacturer plans to offer bus service to workers this fall who commute to the plant from Milwaukee or Green Bay.
- Kansas is trying to recruit rural workers by declaring 77 counties rural opportunity zones. It offers workers who relocate to any of those counties student loan repayment of up to $15,000 and state income waivers of up to five years.
- It’s similar to a program launched in 2016 in three rural Michigan counties that pays off college loans up to $15,000 for graduates who move back and find a job within six months.
- Colorado offers tax breaks to rural businesses and their workers. Qualified businesses can be exempt from state income tax and receive refunds for sales and use taxes. Employees in firms with up to 300 workers may receive income tax credits for up to four years.
McCauley, of Networks Northwest, applauds Michigan’s Marshall Plan for Talent, a measure signed in June by Gov. Rick Snyder to funnel $100 million over five years into Michigan’s public high schools to boost training for on-demand jobs. Noting there are more than 100,000 unfilled jobs statewide, he said that should pay off in a better talent pipeline for employers both urban and rural.
But whether it will plug this talent gap remains to be seen.
According to Pure Talent Connect, the state’s jobs website, there were more than 8,300 unfilled skilled trades job openings in 2017 across all industries, with 6,200 more expected to open up each year through 2022. It projects that professional trades will account for more than 500,000 jobs statewide by 2024 – with some 15,000 new job openings a year during that time.
As more and more skilled Baby Boom workers retire, up to two million skilled U.S. jobs are expected to go unfilled by 2025, according to a 2015 report by the Manufacturing Institute, a nonprofit affiliate of the National Association of Manufacturers. A third of companies surveyed by the institute reported they had turned away new work because they lacked needed manpower.
“It’s demographics and the school system,” said Johnston of the Michigan Manufacturers Association.
“The Boomers with skills, the tool-and-die workers and machinists, are aging out. As a practical matter, career tech programs were shut down all over the state in the late 1990s. We need to redevelop the talent pool.”
We’ll train them ourselves
At Kalkaska Screw Products, 25 miles east of Traverse City, CEO Kevin Schlueter said he no longer expects a qualified skilled trades job applicant to walk in the door. It’s not for lack of trying – he said he’s been to every high school guidance counselor within a 20-mile radius to let them know: “If you have a student who wants to go to work, I’ve got a job for them.”
“We don’t hire for skilled trades any more,” Schlueter said. “There’s not people out there with technical skills, especially in rural areas where the pool of candidates is much smaller than an urban area.”
Instead, Schlueter looks for applicants without technical skills who the firm believes can become that skilled worker.
“We hire people for what I used to call soft skills, but now I call them employability skills. Will this person show up to work every day? Is this person a good work candidate? They have to fit within our culture.”
Challender of Hayes Manufacturing can relate.
She said the firm has trouble attracting and keeping workers to do even entry-level jobs at the plant.
“Very often, they won’t come back after lunch,” she said.
But there are examples the other way as well.
Challender said there’s a key trait – call it curiosity – that may suggest which new hires are destined to become a valuable asset.
“Some young people, they are very curious. They come in and watch the very experienced machinists. They will try things and learn from their mistakes.”
Tyler Briegel, 25, started at Hayes Manufacturing six years ago. At 16, in a summer job at a Traverse City factory, he began exploring how to program a computer numerically controlled machine.
“Everything it did intrigued me. I wanted to learn how everything was controlled. I started teaching myself.”
Briegel began as a set-up operator of one of the CNC machines at Hayes Manufacturing.
“Before I knew it, I was programming for all the (CNC machines),” he said, as he now occupies a supervisory position that also meant a nice bump in pay.
“I enjoy programming a lot. Process engineering is what we call it.”
His advice to other prospective young workers: “You can make a good living off manufacturing. But you have to grasp it, find the right employer and have the drive to become better. Ultimately, employers are paying for skills.”