OWATONNA – The imminent workforce shortage was once again a focal point during the presentation of Enterprise Minnesota’s annual survey results regarding manufacturing in Minnesota.
President and CEO of Enterprise Minnesota Bob Kill presented the results of the State of Manufacturing survey to a group of roughly 100 professionals at the Owatonna Country Club Tuesday morning. The results, for the most part, remained consistent with previous years, finding a high amount of optimism and confidence in manufacturing companies for their financial future, as well as showcasing a plateau for both economic expansion and company expectations.
It was the concern with recruiting and retaining skilled workers, however, which continued to weigh largely on the minds of the 400 manufacturing executives that were interviewed for the survey in March.
“The qualified worker shortage clearly gives healthcare a run for its money,” Kill said regarding the top concerns for the majority of manufacturing companies. “If you look at the metrics, the cost of healthcare individually is the largest, but when you start combining the three different ways of looking at qualified workers and put those numbers together it gets to be pretty huge.”
This is the 11th year that Enterprise Minnesota has conducted the State of Manufacturing survey, and Kill was happy to report that Minnesota manufacturers continue to thrive in a strong economy. The severe worker shortage unfortunately continues to overshadow growth and profitability in the industry, which is why 54% of manufacturing companies in rural Minnesota are focused on maximizing productivity, with efforts such as automation and continuous improvement, to combat the crisis.
Kill stated that nearly half of executives pinpointed the inability to attract qualified workers as the biggest impediment to growth, showing a 14-point increase since the 2017 survey. Faced with this issue, most manufacturers say they are addressing the worker shortage with efforts to maximize productivity with 76% stating they emphasize improving “people development and process improvement equally.”
Ironically, Kill says that there is little investment — less than 15% — by companies to provide leadership training for their employees.
“If you’re not developing your people, they’re going to leave you today,” Kill added. “That’s especially going to be an issue if this economy is a little less vibrant in the next couple of years – smaller companies that don’t realize that there are resources in the public sector to do people development and process improvement, they’re going to struggle more than they might feel like they will.”
After the presentation of the survey results, a panel of manufacturing professionals further discussed some of the results – largely focusing on the workforce shortage and how to combat the glaring issue. The panel consisted of Dennis Heimerman, President and Founder of Metal Services of Blooming Prairie, Inc.; Daryle Pomrank, President and Owner of Winnebago Manufacturing Co. in Blue Earth; Craig Porter, President and Owner of PlastiCert, Inc. in Lewiston; and Bob Isaacson, Executive Director of the Minnesota Department of Employment and Economic Development, Office of Business Finance.
“We really work hard at making our company a destination place — a place where people want to — and we work hard at expanding our visibility,” Porter said about how PlastiCert advertises their employment opportunities.
Pomranke added that at Winnebago they have an average of 95% retention in their 45-50 employees, so they put a large focus on keeping their employees happy by providing cross-training and allowing room for career growth.
The three manufacturers largely agreed that one of the biggest obstacles the industry faces when it comes to the worker shortage, however, is breaking the mold in the education system.
“Schools still are not talking about how [manufacturing jobs] can be real career paths,” Pomranke said, explaining that most schools also lack the funding to bring in industrial arts programs to the high school level.
“Junior high isn’t too young to introduce them to manufacturing,” Heimerman added. “Their little wheels are turning and if you can get a piece of wood or metal in their hands, they might be able to realize that this is where they want to be.”
Full results from the State of Manufacturing 2019 survey can be accessed by visiting EnterpriseMinnesota.org.