Manufacturing Jobs and Returning Veterans

In the 2011 Skills Gap study conducted by Deloitte Consulting LLP and the Manufacturing Institute of over 1,100 manufacturing executives, 83% reported a moderate to severe shortage of skilled production workers and expect this shortage to worsen over the next three to five years. The survey found that 5% of current jobs at those manufacturers who responded to the survey were unfilled due to insufficient qualified applicants. That translates to roughly 600,000 jobs that are going unfilled, despite the 12.5 million Americans out of work, as of July 2012.

The Demand: The State of the Manufacturing Union

In the 2011 Skills Gap study conducted by Deloitte Consulting LLP and the Manufacturing Institute of over 1,100 manufacturing executives, 83% reported a moderate to severe shortage of skilled production workers and expect this shortage to worsen over the next three to five years. The survey found that 5% of current jobs at those manufacturers who responded to the survey were unfilled due to insufficient qualified applicants. That translates to roughly 600,000 jobs that are going unfilled, despite the 12.5 million Americans out of work, as of July 2012.

The consequences of this on the industry are acutely disruptive. U.S. manufacturing has grown (Q1 2012) by 9.1% versus 1.8% for the total economy, escalating the need to clear the recruitment pipeline and rapidly bring in employees who can support the industry’s growth. In the absence of those employees, manufacturing’s growth could begin to regress. 51% of the manufacturers who responded to the Deloitte study reported difficulty in meeting consumer demand for production, 35% reported difficulty in achieving production targets, 27% reported difficulty in new product development and innovation, 24% reported difficulty implementing new technology, and 20% struggled to implement quality improvement processes, as a result of labour shortages. Furthermore, labour shortages in skilled production jobs (e.g., machinists, operators, craft workers, distributors, and technicians) and production support positions (e.g., industrial engineers, manufacturing engineers, planners, etc.) are adversely affecting their company’s ability to expand operations and improve productivity, according to 74% and 42% of the manufacturers who responded, respectively.

The Supply: Veterans in the Labor Market

According to the Deloitte report, nearly 1,000 multinational corporations have established their European base in Ireland. Pharmaceutical manufacturers, medical device makers, information communications technology (ICT) providers, and financial services, are leaders of FDI in Ireland. The incentives for these companies are numerous and extend far beyond the highly attractive 12.5% corporate tax rate. Of foreign companies in Ireland, U.S. companies comprise a significant portion: 600 U.S. companies currently operate in Ireland and employ 100,000 workers, according to a report by ‘60 Minutes’. Moreover, the U.S. paid 33% (or one-third) of Ireland’s total corporate tax, according to the Deloitte report, over the past 10 years.

A Package Deal

As of 2011, there were 21.6 million men and women ages 18 and older who have served in our Armed Forces (approximately 2.4 million of which have served since September 2001) within our civilian population. There are more high school graduates who have completed some college among today’s veterans than those in earlier cohorts, according to the Bureau of Labour Statistics.

The 2011 unemployment rate for all veterans was 8.3%, below the overall unemployment rate for those who had never served in the military (8.7%), which, given the considerable challenges veterans face re-entering the marketplace, is testament to their resiliency and industriousness. The unemployment rate for post – 9/11 veterans — many of whom have fairly recently reentered civilian life –averaged 12.1% in 2011. The unemployment rate was 30.2% for the youngest post 9/11 veterans (those aged 18 to 24), much higher than the 16.1% unemployment rate for non-veterans in the same age group. As of May 2013, there were 1.9 million unemployed veterans.

The Challenges and Opportunities

In a healthy economy, reentering the civilian workforce can be difficult, and though there have been signs of recovery, manufacturers are cautiously adding to their headcount, according to a labour economist at the Brookings Institution. Aside from the sluggish economic recovery, another barrier is the difficulty translating the valuable and relevant skills veterans have obtained during their military terms to applicable positions in the civilian labour market. Analysts speculate that one possible cause is that civilian employers and recruiters, unfamiliar with military occupational titles, are not able to connect their relevant experience to a suitable position within their company.

In a recent poll conducted by the Society for Human Resource Management, 78% of employers responded that a skills map that translates military job skills into civilian jobs skills would help in their efforts to recruit and hire veterans. Equipping veterans with a better grasp of civilian professional terminology, would also aid in bridging the gap between their military experience and civilian work. Lastly, though many veterans have the skills and aptitude to succeed in manufacturing, they often lack the necessary credentialing to be considered for jobs in the sector.

In October 2012, GE and the Institute for Veterans and Military Families at Syracuse University released the results of their ‘Voice of Veterans’ survey of over 1,000 veterans and active duty personnel under the age of 45. This is what they found:

  • 76% of young veterans are confident they can be successful in their careers, despite the many challenges faced when transitioning to civilian life; and this confidence level increases with age
  • 66% feel their skills are undervalued by private sector employers. Unparalleled work ethic, leadership, teamwork, discipline, and dedication are translatable skills they have to offer the civilian workforce.
  • 70% believe the skills they earned in the military align with a job in the manufacturing industry
  • 79% are motivated to find educational opportunities to help them find and advance their civilian career

Veterans who responded said training and education (comparable to that received in the military) are needed to facilitate a transition into civilian work life, a transition they very much seek, and they believe their background and existing skills will translate well into private sector employment.

Solutions

Government and industry are moving decisively to tap this heretofore untapped (or under tapped) resource. In June 2012, President Obama announced the launch of the Military-
to-Civilian Skills Certification Program. The initiative will enable up to 126,000 service members to obtain civilian (industry-recognised) credentials and certifications in a number of high-demand industries, for the trade skills they have learned and worked hard to master while in uniform.

The Department of Defense (DOD) is working with major manufacturing credentialing agencies to expand certifications to active duty military personnel in the fields of engineering, logistics, maintenance and welding, and exploring how credentialing opportunities can be integrated into existing military training programs and expanded to include everyone with relevant skills and training, thereby circumventing the cycle of long-term unemployment (or underemployment) that can occur when veterans leave active duty.

Two examples of pilot programs launched include a partnership between the American Welding Society, the National Institute for Metalworking Skills, and the U.S. Army Ordnance School at Fort Lee, the latter of which trains about 20,000 service members each year to develop, produce and maintain weapons. Service members who acquire these specialties will automatically receive the equivalent civilian credentials.

The second collaboration (of three launched in 2012), includes the partnership between the Army and the Society of Manufacturing Engineers to expand certification opportunities at the Army’s Engineer School at Fort Leonard Wood, Mo. The school is currently conducting a one-year pilot program for students to qualify as Certified Manufacturing Technologists and earn Lean Bronze Certification–industry-standard manufacturing engineering certifications.

Founded last year, the Get Skills to Work (GSTW) coalition, which originally included The Manufacturing Institute, GE, Boeing, Lockheed Martin, Alcoa Inc. LinkedIn, Futures Inc., Atlantic Council, the Gary Sinise Foundation and Techshop, has subsequently added 190 manufacturers. Many of the new coalition members are small-to mid-sized manufacturers, which often face a shortage of skilled workers. The GSTW coalition helps veterans and employers translate military skills into advanced manufacturing job requirements, accelerate skills training for U.S. veterans, and empowers employers with tools to recruit, onboard, and mentor veterans. As of May 2013, The GSTW coalition also added 1,000 training slots for veterans at TechShop (added to the VA’s existing sponsorship commitment of 2,000 memberships).

The GSTW program plans to help 15,000 veterans translate military experience to corresponding advanced manufacturing opportunities and is seeking additional partners to enable it to meet its goal of hiring 100,000 veterans by 2015. GE employs more than 10,000 U.S. military veterans and has set a goal of hiring 1,000 veterans each year for the next five years.

A Winning Match

The authors of the Deloitte and Manufacturing Institute studyxvi strongly underscore the point that to meet its current and future workforce demand, manufacturers must employ more innovative methodologies in workforce development. That mandate has led the industry to seek new recruits for its talent pipeline through partnering with veterans’ organizations and led to the discovery of an ample fount of new resources.

At a speech at the Honeywell plant in Golden Valley, Minn., in which he announced the launch of the Military-to-Civilian Skills Certification Program, President Obama remarked, “…if you can save a life on the battlefield, you can save a life in an ambulance. If you can oversee a convoy or millions of dollars of assets in Iraq, you can help manage a supply chain or balance its books here at home. If you can maintain the most advanced weapons in the world, if you’re an electrician on a Navy ship, well, you can manufacture the next generation of advanced technology in our factories like this one. If you’re working on complex machinery, you should be able to take those skills and find a manufacturing job right here–right here at home.”

For the 69% of (surveyed) unemployed veterans who cite “finding a job” as the greatest challenge to transitioning back to the civilian world, that is a challenge they are more than up for.

Epilogue

This whitepaper was commissioned and sponsored by eMaint Enterprises, LLC, in order to shed light on the high unemployment rate of returning veterans and the amount of skilled manufacturing jobs that they could fill. eMaint is one of the industry leaders in the evolving fields of CMMS systems and asset management/tracking software and is constantly striving to provide quality educational materials for the field of manufacturing.

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