Apprenticeship Programs Support Growing Manufacturers
The US continues to see strong economic numbers. We’ve seen seven straight quarters of positive results from the National Association of Manufacturers (NAM) Manufacturing Outlook Index. This is the time for manufacturers to begin or expand their apprenticeship programs if they want to keep growing and strengthen their teams.
Ray Chalmers at Gray has a great article highlighting a few of the reasons why and some companies doing it well.
Businesses are finding it harder to hire quality people
For the third straight NAM survey, the inability to attract and retain a quality workforce remains the top business challenge for manufacturers, cited by 76.7 percent of respondents. With robust predicted job growth and an encouraging economic outlook, finding and keeping the right talent is a critical mission more manufacturing companies are taking on themselves.
Costs are lower for companies long-term
Companies have to make money to stay in business, pay employees, and to grow. Our team at The Made in America Movement represents 20,000 American companies in manufacturing and technology. Thanks to these companies, we are able to see behind the scenes of companies that are just starting out, large enterprises that are scaling their businesses, and many that in between.
Companies grow best when they’re making long-term decisions, rather than chasing short-term profits. Some companies do this quite well. Others simply get hyper-focused on the short-term during hard times and do not reset their viewpoint when things begin to improve.
Starting and running an apprenticeship program can increase short-term costs but the long-term benefits to the company are incredible, not just in lowered expenses.
Calculating program costs and goals up front is essential. The ICATT Apprenticeship Program team works with employers to help establish program metrics and costs before getting any program off the ground. It recommends employers ask questions such as:
- How much are we spending to attract and retain talent?
- How effective are these efforts?
- What is the typical cost for onboarding and fully training a new employee in the business areas affected by the skills gap?
- How much is the skills gap causing in overtime costs?
- What downstream effects of overtime have been experienced (turnover, morale issues, etc.)?
- How much is the skills gap causing in quality issues, delays and other production issues?
Many benefits for companies
The biggest advantages for a manufacturing company implementing an apprenticeship program are related to culture and retention, says Jeanine Kunz, vice president, Tooling U. Companies like Cox see lower turnover and heightened employee engagement. The program also helps them reach younger employees.
Years ago, every major manufacturer had apprenticeship programs. Some of them were formal programs and others were informal programs with the older employees naturally looking for ways to help the “newbies”. They were great examples of servant leadership, but in the past 30 years, many of these programs slowly faded away as so much of our manufacturing went overseas.
It’s great to see the trend of apprenticeship programs coming back. Does your company have one? Have you been part of one in the past?