DIY Way to Beat The Manufacturing Skills Gap: Schweitzer Engineering
The skills gap bedeviling U.S. manufacturers has given rise to hundreds of programs to train workers. And most of these efforts, though varied in other ways, share one important trait: the schooling that occurs happens offsite, not at the factories for which workers are being trained. It could be at a community college, regional or local “workforce development” agency, or other independent organization.
The aim is to develop and sharpen skills of a potential assembly worker, or higher skilled manufacturing player, and then plug them in to an ongoing company operation with as little ramp-up time as possible.
Many employers prefer this model. Given the narrowing of the mission at many companies – to a core competency of a relative handful of tasks, letting others handle less-central requirements of the workplace – it makes sense to them. The very nature of training and integration of new workers – some drop out, some don’t make the cut, even the best can slow down the operation with questions and adjustments – seems antithetical to some operations designed to run 24 hours a day, 365 days a year, at flat-out 100% of capacity, with minimal layers of management.
But is there another way? The projected shortfall in manufacturing workers – the U.S. is expected to come up a full 2 million employees short of its required 3.4 million new workers in the sector in the decade ending 2025, according to a study by the Manufacturing Institute and Deloitte – is so significant that no approach should be ignored. And today, I want to recommend to every manufacturing CEO the very different experience of Schweitzer Engineering Laboratories, a maker of sophisticated equipment for the global power industry based in Pullman, Wash.
While others outsource, Schweitzer goes DIY. While others establish a tightly focused definition of work history and skills they’re looking for, Schweitzer focuses on fundamentals: “I like to hire smart people with good values and strong fundamental education,” says founder Ed Schweitzer, who started the company in his basement 35 years ago. Today, it employs just over 5,000 and has revenue of nearly $1billion.
I’m not suggesting that Ed Schweitzer’s way is the only way. But his company’s startling success at attracting, developing and retaining devoted employees shouldn’t be ignored. Schweitzer Engineering competes against far more glamorous technology companies for electrical engineering graduates, and more than holds its own. And given its remote location, about 75 miles south of Spokane near the Idaho border, conventional thinking suggests the company would long ago have exhausted the local labor market, where it employs more than one-in-ten residents (aside from the students at Washington State University). But a recent push to hire 100 assemblers, expected to take three months of concentrated recruiting, instead was completed in three weeks. (More on that below.)
So, ask yourself, under your company’s recruiting system, would you have hired Leo Ressa, known widely in Pullman as the guy who owned the shoe repair shop for 30 years? How about Terry Troyer, who spent 20 years running a couple of drive-thru espresso shops in nearby Lewiston, Idaho? Today, Ressa is 64 and Troyer is 60, and each is a manufacturing supervisor at Schweitzer, overseeing crews of 20 or more fellow employees, after having worked their way through a variety of departments and job functions.
Would you be planning to start an in-house algebra class, or one on writing, so that assemblers and others who’ve grown curious about how electricity works might re-start their education, or those who want to shift into customer-facing jobs can acquire better and deeper communication skills? And would you have campaigned heavily in favor of a school bond issue in Lewiston, diverting staff time to the cause, not to get potential workers trained on a particular machine but to get all high school graduates in the area better prepared for life?
“In education,” Ed Schweitzer tells me. “You’ve got to build from a strong foundation. Schools need to focus on that.” As for specific job skills, though, “we would rather teach our employee owners what they need to be doing here, and how to do it.”
(Employee owners? Read this article, published earlier, about Schweitzer Engineering’s ESOP and how it helps the company compete for talent and be more productive.)
In R&D, Schweitzer Engineering formerly required an associate’s degree for some technician jobs. Then, about five years ago, the company asked itself whether it shouldn’t scrap that and develop its own in-house curriculum. That led to better fit and a bigger pool of applicants, the company says.
Most employers talk a good game on employee retention, but competing impulses can undermine the effort. In recent months, Schweitzer Engineering has run at about 90% of capacity on its two-shift production schedule. Some managers might take that as a signal to reduce employment and get closer to 100%. But knowing that orders rise and fall during the course of a year, Schweitzer instead decided to boost capacity by hiring those 100 new assemblers.
First off, operating at close to maximum capacity risks disappointing a customer, explains Tony Lee, vice president of global factories. If Schweitzer, at 90%, loses a single day to an equipment breakdown or supply glitch, it takes 10 days to make that up. Overtime, popular in smaller doses, in large doses wears out employees and can lead to quality and productivity problems. “People get tired,” Lee tells me.
“The answer is obvious (to the people at Schweitzer, at least): over-hire, over-staff,” Lee says. Once the 100 new workers are trained, the company will have the capacity to more efficiently recover from an interruption. “What do you do with these people when orders are a little light? Well, you allow them to continue their education,” Lee explains. And that turns a job at Schweitzer into a career, reduces turnover and lifts employee satisfaction and productivity. “This is an employee retention program,” Lee says. “We need dedicated employees to make our factories run smoothly.”
How dedicated? When Schweitzer decided to recruit 100 new workers, it turned existing employees loose to spread the word. They tweeted. They texted. They called friends. They posted word on Facebook. The company, a dominant force in the local economy, held an open house, and gave tours. Lee alone brought in three hires.
A 90-day project wrapped up in three weeks. “It was a pleasant surprise,” Lee says. “We were concerned we’d saturated the market.”
Would your workers do your recruiting for you? Jessica Troyer, 24, joined Schweitzer Engineering about four years ago, after working in her mother’s espresso shops for years, and knew her mother was looking to make a change in career, too. “One day at work, I saw a poster saying we are hiring assemblers, and I ran home and told my mom,” Jessica says. She has a high school education and some college, and last November was promoted at Schweitzer to associate supervisor in the final test area, her first step toward a management career.
Her mom, Terry, moved up even more quickly, now supervising two areas on the swing shift, 3:00 PM to 11:30. Schweitzer Engineering saw in her someone who had run a business and trained a lot of young workers at her espresso shops. She learned more about the manufacturer with each job. “I’m a go-getter,” Terry Troyer says, laughing. “Once I do something a couple of times, I have it.”
A shoe repair customer who worked at Schweitzer suggested Leo Ressa apply in 2003, as he was mulling winding down his business. He was 51 at the time. Introduced at the weekly Schweitzer lunch with other new employees, Ressa recalls, “There were gasps in the crowd – people wondering where they were going to get their shoes fixed.” (Ed Schweitzer and others now patronize a shoe repair in Lewiston.) Ressa worked as an assembler for three years. Then, when his supervisor got another job, Ressa applied and was promoted. He turns 65 this fall and doesn’t feel like he’s anywhere near done with this second career. “I’m in good health and having a lot of fun,” he says.
Younger people who mightn’t seem a perfect fit find their way at Schweitzer, too. Elizabeth Stradley, 21, was an engineering student at the University of Idaho and got an internship at Schweitzer. About a year ago, she realized the abstract nature of engineering studies wasn’t for her, not now at least, but that she loved operating testing equipment at Schweitzer Engineering. The company happily moved her from intern to full-time technician. If she decides to return to school, a generous tuition reimbursement program awaits. And in the meantime, “I found a job I love.”
Terrin Thykeson, 29, says he “struggled with school – ADHD. School doesn’t work for me. I had a rule-following problem.” His mother and step father both worked at the company and his mother suggested he not apply until he was mature enough. “She wanted to make sure I was ready, and not ruin a great opportunity.” Thykeson joined the Army National Guard and learned diesel mechanics. That gave him confidence and six years ago he was hired at Schweitzer.
The on-the-job training suits him, and it isn’t limited to individual tasks but includes a broader theory of manufacturing that helps Thykeson understand his job and his workplace. In a testing operation, one task was to thread wires from a test station into Schweitzer equipment being prepped for shipping, a time-consuming and laborious job nobody liked. Thykeson studied it like a puzzle and, without being asked, figured out how to re-route the test wires and significantly simplify the work. “I like to solve problems,” he says. “I get to do that here.” He’s a supervisor now, too.
Stacey Doty, HR director at Schweitzer, helps design training, education and other programs to solve the problem of a manufacturing skills gap. Schweitzer Engineering hangs big posters on the walls that show the steps in career paths for assemblers to follow the success of Ressa, the Troyers and others. And the company is developing an apprenticeship program where workers can apply to gain experience in positions outside of manufacturing in areas such as sales, operations, technical fields and leadership. “There’s no one way to develop your people,” Doty says. “It takes various methods and opportunities.” For Schweitzer Engineering, most of that is happening under its own roof.