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We Can Solve the Technical Skills Gap! by Paul Perkins

This article originally appeared in a newsletter for the National Governor’s Association. It is being reprinted here with their permission.

Where Will Technically-Skilled Workers Be Found to Ensure A Bright Economic Future?

Sometimes too much of a good thing can bring about its own demise, and it seems we face the specter of that outcome today. Our economic success has brought about very low unemployment – April, 2018 unemployment dipped below 4% for the first time in 17 years—and as a result, companies can’t find the people they need to maintain their output, much less grow it. Most acutely, companies cannot find workers with technical skills to fill the burgeoning ranks of technical jobs.

The reason for the large shortage of technical workers is partly driven by companies’ growth but is even more affected by the underlying driver of this growth: productivity improvements due to technology. Technology is rapidly being implemented in every job, and the jobs that already use technology are being upgraded with new types of technology.

In manufacturing, for example, assemblers must now be able to interact with computer terminals to read schematics, analyze production information, and operate computer-controlled tools. Machine operators operate much more sophisticated machines and are expected to perform basic maintenance and troubleshooting tasks. Further, advances in computing power and reduced costs of technology are enabling more manufacturing processes to be automated, generating the need for an ever-increasing number of maintenance and IT technicians in our workforce.

Unfortunately, at just the time when technical workers are needed most, fewer people are choosing technical careers than ever before. By some estimates, the number of people leaving high school who are choosing technical careers aligns with only about 50% of the demand. The result is that we don’t have the maintenance technicians, programmers, IT specialists, production technicians, and engineers to sustain our economic expansion.

Why Do We Have a Shortage of Technical Workers?

What has brought us to this precarious state, you might ask? For one, our youth education system has not kept up with the changes in technology and the way people work. Many secondary education systems have not made career and technical education programs a priority, instead viewing them as a path for low-achieving students. As a result, career and technical education systems in most states desperately need updated facilities, curricula, and program structure.

Students and parents need dramatically better information about technical careers.  According to the Brookings Institution, technical jobs across all sectors pay significantly better than non-technical jobs and have a more robust career ladder. Similarly, the National Association for Manufacturing (NAM) reports that manufacturing jobs pay on average about 20% better than other industry sectors. And beyond compensation, there are many other attractive aspects of technical and manufacturing careers. So why are so few students choosing these career paths? The answer has to be that both students and parents simply don’t know about the wealth of choices available.

Solving the Shortage

Solving these problems will best come from a partnership between education, industry, and government. It is not just a financial resource challenge, but a marketing challenge as well. The solution involves three elements:

  • Better education about career options
  • Hands-on learning with relevant classroom technology
  • Extensive work-based learning

Many school systems are attacking these problems by re-designing their career exploration tools to create a modern, up-to-date exposure to the various career sectors, imbedding these tools in earlier grades and increasing the number of student exploration experiences. Some school systems are specifically targeting key industries and the technical jobs within these industries, actively encouraging students to seek these career paths.

All these changes in career exploration are spot-on but they aren’t sufficient in themselves. Have you ever tried to make an important decision without knowing what you are doing? Until individuals actually try the work it is difficult to know if they will like it or be good at it. Students need to get first-hand experience; they need to be immersed. Our current educational system, though, often leaves this experience to the time when students are actually in the workforce, often after heavily investing time and money into a degree where they find the jobs associated with it lacking. This may be one reason why the average age of a community college student is late 20’s.

To provide hands-on experiences with various types of work, today’s leading school systems are increasingly implementing or revamping broad-based technology/career pathway programs in grades 7-12. These classes generally involve many different types of technology and processes, incorporate project-based learning, and align to career pathways such as healthcare and manufacturing/engineering.  Studies have shown that quality technology classes consistently motivate students to perform better in academic courses as well as help them chart a better career path.

The third element needed to solve the technical worker shortage is to provide students with opportunities to experience the workplace first-hand. Collectively called work-based learning, these experiences can include summer internships, co-ops, and apprenticeships. Working at an actual business provides a realistic experience that further aids in career exploration and helps students master critical work ethic skills.  Apprenticeships have the added benefit of developing a higher level of skill than other types of work-based learning.

Apprenticeship: A Path to Excellence

Apprenticeships are not new to the U.S., but they have mainly been applied in the construction industry through trade organizations for post-high school students. Students and parents too often view them as an alternative to higher education for those with less ability, not as a form of higher education or a part of a successful career in fields outside of construction. In contrast, several countries in Europe use apprenticeships much more broadly. Consider Switzerland’s approach:

  • Apprenticeships are industry-driven and available for many different industries and occupations.
  • They are open to people at any age starting in high school at ages 15-16.
  • Apprenticeships interleave paid employment with classroom learning over a period of 1-1/2 years to 4 years. A common format is to attend school 2 or 3 days a week and work the remaining days.
  • The Swiss system is based on a highly permeable, or flexible, model that weaves the apprenticeship path into a university framework – students graduating from an apprenticeship program can easily enter a variety of university programs.
  • 70% of students choose an apprenticeship as their initial career path.
  • Many CEOs of famous Swiss corporations have taken the apprenticeship path.

A much more robust deployment of apprenticeships in a style similar to Switzerland’s could greatly benefit both companies and students. By starting students in high school at grade 11 following introductory technology/pathway classroom courses where students develop basic technical skills, companies would experience an immediate step-jump in the size of the worker pool. They would get relatively inexpensive workers who would become productive very quickly and continue to build their skills through classroom learning during the apprenticeship.

The benefits to students are significant as well. By participating in an apprenticeship, students would earn money to support themselves, experience work at a realistic level, develop critical work ethic skills, and become skilled at a level sufficient to obtain a high-paying job. As in Switzerland, success depends on engaging students while they are still in high school. By giving them the option to enter the program in their last two years and continuing their program for 1-2 years after high school, students gain tremendous experience and direction. This system connects secondary and post-secondary systems in a cohesive way that produces highly trained individuals by the age of 20 years old.

This flexible model positions the apprenticeship path as an equally acceptable and integrated route to all high achieving careers, whether university is involved or not. Students can choose to change directions at any time:  no path is irreversible. The apprenticeship path is consequently seen by the Swiss as a low risk choice because careers pay well for graduates of apprenticeship programs and graduates can seamlessly go on to higher levels of education at any time. Do we need more proof than the many Swiss CEOs who took the apprenticeship path?

As in Switzerland, our industry sectors’ major trade and professional organizations need to play a leading role in identifying the types of apprenticeship programs, program length, and the competencies needed. Individual companies should be able to tailor a program as well so that students learn the latest technology and ensure that apprentices are highly productive for the companies.  Swiss industry pays over half the cost of the apprenticeship system – approximately 60% – with most of this cost being wages paid to the apprentices. The wages paid to apprentices during the program period coupled with their increasing skills make them a “net add” to companies’ bottom lines while they are still apprentices. This in part explains why so many small and medium size Swiss companies participate in the apprenticeship program.

While the U.S. has much to learn from other countries using apprenticeships, there are many promising U.S. initiatives already in progress. I am most familiar with Indiana’s progress:

  • Governor Holcomb’s Office of Apprenticeship and Work-Based Learning, under the Department of Workforce Development, is charged with increasing apprenticeships in non-traditional industries and growing apprenticeships and other types of work-based learning in high schools.
  • Indiana is beginning to deploy USDOL’s recently created Industrial Manufacturing Technician (IMT) Apprenticeship program. This 18-month registered program carries the MSSC CPT certification and is designed to produce high-tech production technicians to fill the many entry level positions open today.
  • My own company, Amatrol of Jeffersonville, IN, recently implemented the IMT program with much success, starting with one apprentice and quickly growing to six. The program has enabled us to hire workers without prior manufacturing experience and quickly skill them up to productive status. It has also been very motivational to the apprentices.
  • Seven different high schools in our local area are including IMT in their schools, supported by pathway technology courses, to create a youth pipeline for other local industries who want to participate in the apprenticeship program.

The shortage of technical workers is at once both a global and local problem. No country is totally immune to its effects. The U.S. is making progress but much more needs to be done. Time is of the essence if we are to ensure that our companies don’t look elsewhere for their next business expansion because they can’t find the technical workers they need.

Paul Perkins

Past Chair, Indiana Workforce Investment Council

President, Amatrol, Inc.

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