Working around the labor shortage
Finding qualified workers ranks high on a list of challenges for manufacturers in the state
Minnesota manufacturers say they feel positive about the future. But while confidence is reaching record highs, manufacturers are also growing more concerned about being able to find and retain workers, according to an annual survey.
It’s a challenge that businesses in the Marshall area are dealing with as well, said Marshall EDA Director Tara Onken.
“It’s hard to find qualified people,” Onken said. As a result, some companies are partnering with educators to help find and train new employees.
Onken said workforce development was one of the issues brought up at a panel discussion she took part in last week. The event, held in Willmar, came after Enterprise Minnesota released the results of its 2019 State of Manufacturing survey. The survey interviewed 400 manufacturing executives and conducted focus groups across Minnesota.
The survey results said 93% of executives felt “confident” about their companies’ financial futures. This was the same percentage as last year, and the levels of confidence expressed in 2018 and 2019 have been the highest in the State of Manufacturing survey’s 11-year history. Survey results said 59% of executives expected increases in gross revenue, and 58% expected employee wages would increase this year. Large companies, with revenues greater than $5 million or more than 50 employees, projected higher increases in wages.
However, the survey said manufacturers are also concerned about a labor shortage. Attracting and retaining a qualified workforce ranked as a top concern, with 48% of manufacturers saying it was a challenge that might negatively impact their future growth. Over the past two years, employee recruitment and retention has become an even bigger concern than the costs of health insurance, which 30% of manufacturers ranked as a challenge this year.
Finding qualified workers was ranked as a challenge more by bigger companies, the survey said. Machine operators and assemblers ranked as the most in-demand jobs.
In southern and southwest Minnesota, more than half of manufacturers said the workforce was a big challenge, at 54% and 52%, respectively. West central Minnesota wasn’t far behind, with 48% of manufacturers rating the workforce as a challenge. In southwestern Minnesota, 76% of manufacturers said the labor shortage was making it difficult for companies to grow, survey results said.
The majority of manufacturers surveyed, at 54%, said they were trying to work around the shortage by maximizing productivity. Other responses included increasing compensation, which 38% of manufacturers said they were doing, and working directly with technical colleges, which 27% of manufacturers said they were doing.
Marshall City Council member John DeCramer attended the State of Manufacturing presentation in Willmar. The survey “seems to be pretty accurate based on what I’m hearing,” from manufacturing businesses in the Marshall area, DeCramer said.
“It’s going to be more of an ongoing concern for all the manufacturing entities in southwest Minnesota,” said Alan Macht at Action Manufacturing in Marshall. Besides the challenge of finding qualified workers, low unemployment rates mean there are fewer employees for available for businesses to hire, he said. Macht said Action Manufacturing has worked with high school career classes and technical colleges, as well as the Southwest Minnesota Private Industry Council, to try and develop interest in manufacturing and connect with potential employees.
Onken said there were “a lot of good conversations” going on at the State of Manufacturing presentation in Willmar.
Part of addressing labor shortages in the manufacturing industry will be working to reduce the stigma of getting trade or technical education, she said. A four-year degree isn’t always necessary for a good career, Onken said.
Retaining young graduates, and finding ways to encourage them to enter job fields like manufacturing, will be important going into the future, DeCramer said.