The Cost of Doing Business

Developing skilled employees internally is expensive, but not doing so might be more expensive still.

Columns From: 10/3/2012 Modern Machine Shop, ,

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Peter Zelinski

Too few prospective employees are entering the workforce trained in skills that are relevant to modern manufacturing. Whose fault is this shortfall? I could point fingers—I bet you could, too. But whose problem is it to solve? Frankly, it’s yours. Stark as that sounds, the challenge of recruiting and training manufacturing staffing will fall to the manufacturing business owners and facility managers in need of this staff. It’s hard to see a likely solution to the immediate lack of skilled manufacturing tradespeople except that manufacturers themselves will increasingly take on the training and development of this talent.

 
The cost of doing this is high indeed. The training time necessary to raise a new recruit into a profitable production staff member able to work autonomously is only the most obvious part of the expense. The other costs are likely to include:
 
• Resume sifting.
 
• Interviewing.
 
• Choosing the wrong candidate and having to start over.
 
• Choosing the right candidate and having to pay well to keep that person from being lured away.
 
• Losing good employees anyway, despite your best efforts, because other employers are facing the same personnel problems you are.
 
Taken together, these costs are expensive. Their unpredictability effectively makes them more expensive still. But how much longer are you willing to go understaffed? More to the point: What price will you pay next year and the year after that for not taking the steps this year toward increasing your talent pool?
 
There is a danger in assuming that the wrenching previous decade for U.S. manufacturing is indicative of how the current decade or the next decade will play out. Lately, manufacturing activity has been strong. What if that strength continues? Shipping costs and overseas labor costs are rising, increasingly leading OEMs that serve North American consumption to do so with North American manufacturing. Meanwhile, the U.S. population is growing and a particularly large cohort of it is proceeding into young adulthood—suggesting that consumption will increase and lift manufacturing along with it. No doubt there will still be dips, both gradual and sudden, but the upward effect of these positive pressures on U.S. manufacturing seems likely to have staying power.
 
Recruiting, training and retaining talented staff may now have become simply an inevitable extra cost of doing business for manufacturers, and a high cost at that. However, considering the level of manufacturing opportunity that it seems reasonable to expect in the future, this cost today likely represents an investment in tomorrow that is well worth making. 
 
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