3/26/2019 | 3 MINUTE READ

Mix Human Capital and Robots to Meet Growing Demands

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Manufacturing production in the U.S. is estimated to grow 2.8 percent from 2018 to 2022 (a faster increase than other segments of the general economy), and manufacturing continues to have an outside influence on regional economies. Longstanding economic analysis has posited for every dollar invested in manufacturing, and the result is $1.40 in additional economic activity.

Along with the predicted manufacturing production output, the need for skilled workers in areas such as CNC machining, fabricating, welding and manufacturing engineers is also on the rise. By 2025, as many as 2 million manufacturing jobs are projected to be unfilled. Welding alone will need an estimated 90,000 welders around the U.S. by 2024, according to Lincoln Tech, a training school for welding students, with campuses throughout the country.

Rather than continue to either ignore the problem or complain about it, some manufacturers are taking a multi-faceted approach to bridge the gap—not only for next year, but also for 15 years down the road. They are exploring mixing robots into their workforce and attempting to diversify their mix of labor on the shop floor. Amazon, for example, added 40,000 industrial robot units to its fleet, along with 100,000 new humans in recent years.

One question being asked by skeptics is, “Are robots the answer for the lack of an available labor force? Will robots replace workers?” Surprising to many, the answer is no to both questions. According to Jeff Burnstein, president of the Association for Advancing Automation (A3), “Hysterical stories keep being printed in the media, but the robot we see doesn’t match the idea of robots being a job killer,” Mr. Burnstein says. “If it were true, then if robot sales were to rise, you'd expect unemployment to rise. We looked at a 20-year period of manufacturing jobs and overall employment in the U.S., and every time robot sales rose, unemployment fell. Every time robot sales fell, unemployment rose.”

For those employers who need to hire human capital, there are two basic categories these hiring needs fall into:

  1. Change in the marketplace, regarding wage and talent scarcity
  2. Attracting entry-level employees, from the shop floor to the engineering desk

Some employers are successfully partnering with community colleges, universities and even high school career programs to build a pipeline of future skilled workers. One ambitious employer, who is looking to corner the market on fresh college graduates, has introduced a three-week PTO/vacation policy for all new hires. The employer discovered that his local competitors were only offering between 10 and 14 days of vacation time to new hires. To be seen as a “manufacturer employer of choice” and to beat out his competition, he decided that an extra week of time off was very attractive to a millennial workforce.

Another example of a company creatively finding ways to attract workers is an employer that uses entry-level and semi-skilled workers is running two shifts, avoiding costly overtime and staffing their facility seven days per week. The manufacturer runs a four-day work week for one group of employees, Monday through Thursday, 10 hours per day. Those employees work four days per week and three days off to spend time with family.

Then, the manufacturer runs a second group of employees on a three-day work week schedule, Friday through Sunday, with an eight-hour attendance bonus for every employee who works all their assigned 32 hours. For the three-day-per-week employee that is earning $12 per hour, they earn a $96 per weekend attendance bonus. They are earning a 40-hour paycheck in 32 hours of time. For the employer, assuming those eight hours would have been paid out at time and a half at $18 per hour instead of $12 per hour, they are saving $48 per that eight-hour timeframe.

Manufacturers need to get creative to get their work/product out the door to meet customer demands. The data indicates that there simply will not be enough employees to get the work accomplished. By blending the technology of robots, with existing human capital, then putting creativity around their newly hired employees, manufactures will be able to give themselves a fighting chance to keep up with their customer demands.

About the Author

Todd Palmer

Todd Palmer is the president of Diversified Industrial Staffing, a national skilled labor recruiting firm, based in Troy, Michigan. 
Contact tpalmer@diversifiedindustrialstaffing.com.