NKIP INTERVIEWS SEPTEMBER 2012 September 2012. BACKGROUND 2 Critical input for Strategic Plan development designed to meet employment needs of Northern.

NKIP INTERVIEWSSEPTEMBER 2012

September 2012

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BACKGROUND

Critical input for Strategic Plan development designed to meet employment needs of Northern Kentucky manufacturers.

The objectives of this research effort is twofold:

Workforce Needs Identify and project the needs of manufacturers in Northern Kentucky

Pipeline Development Understand perceptions and attitudes toward employment in the

manufacturing sector

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METHODOLOGY

• An in-depth survey was developed in collaboration with project leaders

• Two survey components – 1) Questionnaire: to assess attitudes and existing efforts toward the

workforce challenge2) Pre-survey packet: To identify specific workforce personnel challenges and

needs

• Interviewers consisted of key delegates from Tri-Ed, NKY Chamber, and AME Consortium

• Timing: June 12 – September 14, 2012

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WHO WAS SURVEYED?

Diverse and representative sample – by company size and industry

39 employers participated, representing one-third of the population

Half of the top 30 manufacturing employers in NKY50%

Represents more than half of manufacturing employees55%

33%

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NUMBER OF FULL-TIME EMPLOYEES

10 or Less

10-49

50-99

100-249

250-499

500 or More

5%

14%

19%

22%

27%

14%

Size

What is the total number of full-time employees in your company in the Northern Kentucky area?

Subsectors

Machinery Manufacturing

Automotive Parts

Fabricated Metal Products

Printing and Related Support Activities

Food Manufacturing

Plastic and Rubber Products

Chemical Manufacturing

Electrical Equipment, Appliance and Component Manufacturing

Primary Metal Manufacturing

Confidential & Proprietary

Workforce Needs

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OVERVIEW & SUMMARY

Manufacturers expect growth in most areas over the next 10 years. The greatest increase in hiring is expected in the next 12 months, but finding qualified candidates is problem

Across all functional areas, nearly three-fifths of anticipated job openings are a result of attrition and retirement, with the remaining percentage attributed to growth.

The greatest number of job openings is expected for Manufacturing Technicians, an area that currently employs the largest number of workers.

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No Change; 17%

Some Increase, 64%

Large In-crease; 19%

Large ReductionSmall ReductionNo ChangeSome IncreaseLarge Increase

Which of the following best represents your company’s hiring expectation for production and technical positions in 2012?

A MAJORITY EXPECT AT LEAST SOME INCREASE IN HIRING OF PRODUCTION AND TECHNICAL POSITIONS

0%0%

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IN 3 YEARS, THE WORKFORCE IS EXPECTED TO HAVE A HIGHER SHARE OF HIGHLY SKILLED WORKERS.

Current In 3 Years Change

Highly Skilled 26% 28% 2.8

Skilled 49% 47% -1.4

Unskilled 25% 21% -3.7

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47%

3%

50%

Training

Increase Decrease Stay the Same

36%

14%

50%

Recruiting

Increase Decrease Stay the Same

Compared to calendar year 2011, will your 2012 workforce budget increase, decrease, or remain the same?

HALF EXPECT NO CHANGE IN RECRUITING AND TRAINING BUDGETS, THOUGH MANY EXPECT INCREASES

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Unfilled jobs due to lack of skilled candidates (per employer)

5.6

VACANCIES

Unfilled jobs today due to a lack of skilled candidates

680+

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CATEGORIES OF UNFILLED JOBS: DUE TO A LACK OF SKILLED CANDIDATES

Category Includes:

Maintenance Maintenance Tech, Electrical Maintenance

Engineering Process, Controls, Manufacturing, Electrical, Applications, Quality

Machine Operators Machine Operators, CNC Machine Operators

Welders Welders

Mechanics Industrial, Maintenance, Equipment

Assembly Assembly Tech, Skilled Assembly

Tool & Die Tool and Die, Rotary Die

How many jobs are currently unfilled due to a lack of skilled applicants? What categories are these unfilled jobs typically in?

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TOP FIVE DIFFICULTIES DUE TO WORKFORCE SHORTAGES(national comparisons)

Achieving or maintaining target levels of customer service and satisfaction

Maintaining quality levels consistent with customer requirements

Achieving productivity targets

Maintaining production levels consistent with customer demand

Expanding current production capacity

16%

35%

32%

51%

n/a

44%

50%

56%

56%

NKY 61%

Has your company experienced difficulty in the following operational areas due to workforce shortages or employee skill deficiencies?

National

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OTHER DIFFICULTIES DUE TO SHORTAGES(national comparisons)

New product production lines

Effective sales and marketing

Implementing new technology

New product development and innovation

Effective supply chain planning and management

Implementing quality improvement processes

17%

11%

22%

25%

31%

NKY 42%

17%

24%

27%

13%

National 20%

Has your company experienced difficulty in the following operational areas due to workforce shortages or employee skill deficiencies?

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Very Frequently Somewhat Frequently

Not Too Frequently Not At All

47%

31%

22%

0%

How frequently does your organization fill jobs with candidates that require a significant amount of additional training?

APPLICANTS REQUIRING ADDITIONAL AND SIGNIFICANT AMOUNTS OF TRAINING IS A CONSTANT

CATEGORY

Machine Operations

Maintenance

Quality

Mechanics

Engineering

Lean Training

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33%11% 17% 8% 6%

36%

39% 31%19% 11%

Some A Lot

69%

17%27%

50% 48%

How much impact will an aging workforce and anticipated retirements have on each of the following areas?

SKILLED PRODUCTION, PRODUCTION SUPPORT, AND LEADERSHIP ARE EXPECTED TO SEE THE GREATEST IMPACT FROM RETIREMENTS

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Outsourcing of some functions

Focused recruiting on particular workforce segments

External training and certification programs

Use of contingent labor, such as staffing agencies

Use of overtime

Internal employee training and development programs

53%

61%

75%

89%

94%

94%

Has your company used any of the following methods to fill or reduce existing skill gaps in the past year?

TOP METHODS TO FILL OR REDUCE SKILL GAPS

HIGH CONFIDENCE IN CURRENT WORKFORCE, YET LOW CONFIDENCE IN REPLACEMENTS

Our technical workforce currently has the knowledge, skills and abilities for us to be successful.

When we need to fill a technical position, we can quickly and easily find the individual with the

technical knowledge, skills and abilities that we need

88%agree

80%disagree

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Inadequate computer skills

Inadequate reading, writing, communication skills

Inadequate math skills

Inadequate problem-solving skills

Lack of basic technical training (degree, industry certification or vocational training)

Inadequate basic employability skills (attendance timeliness, work ethic, etc.)

8%

28%

31%

31%

31%

53%

22%

31%

17%

42%

47%

22%

A significant or major problem A moderate problem

BASIC EMPLOYABILITY SKILLS ARE A CRITICAL DEFICIENCYHow critical are the following skill deficiencies among job candidates?

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ESTIMATED WORKFORCE NEED IN THREE YEARS

more than 2,500 jobs

Replacements 6%

Workforce Growth 9%

TOTAL WORKFORCE EXPANSION 15%

In total, over the next three years…

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CRITICAL SKILLED POSITIONS THAT ARE CURRENTLY EXPERIENCING SHORTAGES

Manufacturing Technicians Electronic Technicians and

Repairers Industrial Electrician Machine Maintenance Specialist Machine Tool Operators (CNC &

Conventional) Machinist (CNC & Conventional) Welders (MIG - Steel and

Aluminum; TIG - Steel and Aluminum)

Finisher

CAD - Drafter CNC Press Brake Set-up and

Operator Metal Fabricator/Mechanic Hydraulic / Pneumatic

Technicians Engineering Technician Engineer -

Process/Manufacturing Engineer - Design Applications Engineer

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CRITICAL SKILLED POSITIONS NEEDED – 10 years

In the next 10 years…

6,250 jobs

in these highly technical careers will need to be filled.

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DEMAND LEVEL TITLE GROWTHESTIMATE

High Demand

Manufacturing TechniciansMachine Maintenance SpecialistElectronic Technician and RepairerWeldersEngineer-Process/ManufacturingEngineer-Design

2671695532453326330

10 YEAR PROJECTED GROWTH

Some DemandMachinistsMachine Tool OperatorIndustrial Electricians

281260180

Near Stable

Applications EngineerMetal FabricatorsEngineering TechnicianCAD DraftersCNC Press Brake Set-Up and OperatorsFinishersHydraulic Pneumatic

120969453714938

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CORE COMPETENCIES – CRITICAL SKILLED POSITIONS

CAD skills

CNC Programming

Machine maintenance

Process and machine troubleshooting

Precision measurement

Use of diagnostic tools

Problem solving

Confidential & Proprietary

Pipeline

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OVERVIEW & SUMMARY

Method: Focus groups, 8-10 participants each

Timing: June 4-6, 2012

Segments:High School Students (2)Parents (2)Educators (1)Displaced Workers (1)

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OBJECTIVES

Understand perceptions and attitudes toward manufacturing

Determine why manufacturing is not a commonly pursued career

Identify messages that can create positive impressions about manufacturing careers

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FINDINGS

Manufacturing industry is misunderstood by many

Outsourcing has damaged perceived opportunity in the industry; take caution when reversing

Using local schools to build a reciprocal relationship is key

There is interest for some to have the ability to work after high school

Displaced workers looking for opportunity, but training will be a barrier

Confidential & Proprietary

Considerations

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CONSIDERATIONS

Create the brand – Messaging must be concise, convincing, and consistent

Use messaging that is emotional, that provides hope, and that communicates purpose

Provide information about the industry

Segment groups and prioritize efforts according to need

Give manufacturers tools too, communicate from the inside out

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