The Great Skills Mismatch

Despite persistently high unemployment numbers, companies are struggling to find engineers and skilled laborers. What’s behind this gap—and what can today’s CEOs do to find the talent they need?

February 26 2013 by William J. Holstein


OHIO: Urgently Pursuing Upskilling

Michael Canty runs a classic, niche-manufacturing company in Highland Heights, Ohio, on the eastern outskirts of Cleveland. His $10-million-a-year privately held Alloy Bellows & Precision Welding makes industrial bellows that resemble metal accordions that expand and contract. They are used in jet engines and gas turbine engines for power generation, both high temperature, high stress environments.

The way Alloy Bellows survives in a brutally competitive, demanding business is by insisting on ever higher levels of training for its 63-person work force, which includes recent immigrants from Russia, Lithuania and Croatia, as manufacturing techniques become more automated and more sophisticated. “We do a lot of internal training—it’s almost constant,” Canty says. “We also have a lot of cross training. No one knows just how to do just one thing. Once someone learns more than one job, their perspective of whatever they’re doing grows. If they are a machinist and go downstream into where those machine parts go, they have a better understanding of the whole process.”

But Canty also turns to local community colleges, primarily Cuyahoga Community College (Tri-C), for help in upskilling his workforce. “If we want several people to learn something like blueprint reading or dimensional inspecting, it makes sense to bring Tri-C in because it’s an objective source,” Canty says. “Often their information is better. They may be more current in their knowledge of new equipment and new techniques. And it provides an outside voice. Someone on the floor hears an outside voice and it gets recognized and is heard a little more clearly.”

Plus, the price is right. Canty estimates that it costs half as much to have Tri-C experts come to his plant than for him to conduct the training himself. The reason it costs so much less is that Tri-C can obtain state funding to help defray costs.

Does the training pay off? Canty does not seek to attach a single return on investment (ROI) number to his training efforts but instead looks at other metrics. “Quality goes up, errors go down, people move from job to job more easily without error, and on-time shipping goes up,” he explains. “We bar-code every single function, every single person. It helps with scheduling, but it also helps us analyze efficiency and productivity ratings. It allows us to set standards to see where the variances are. I’m convinced that training has a very positive effect.” All that may explain why his profit margins are up almost 50 percent over the past few years.

Soft skills also are important and need to be upgraded constantly. “I don’t know of any operation that doesn’t require communication from one function to another,” Canty says. “Without cooperation and communication, you end up with a far more dysfunctional plant [than] would otherwise be the case.”

He has adopted a liberal educational-reimbursement policy, and that encourages some of his workers to take classes at Tri-C in the evenings. “If you’re making 15 to 18 bucks an hour and you have a family of four, it’s pretty hard to be thinking about paying thousands of dollars for a course,” Canty says. “Another effect is that it provides self-esteem to individuals who go to those classes and prepare for promotions. It gives them status.”

Susan Muha, executive vice president at Tri-C, says that about 40 percent of what Tri-C does is upskilling of existing workers at companies like Alloy Bellows. “We take a core program and change 20 or 30 percent of it, then package it and go out and train,” she says. Tri-C staff may take a welding simulator to a company for training, or the company may choose to send workers to Tri-C to be in a more neutral, non-work environment. “We’re open to anything,” Muha says. “That’s one of the beauties of most community colleges—we’re trying to figure out what will work best for that particular company.”