Short on Skilled Workers, Employers Offer Training, Chance to Grow: Pathways to Prosperity

May 08, 2019 - "Press Releases"

CLEVELAND, Ohio – Help-wanted ads and online job boards, career fairs, even employment agencies … nothing seemed to bring in the skilled, blue-collar workers employers needed. So, they decided to grow their own.

Ohio CAT, Ohio’s main authorized Caterpillar dealer headquartered in Broadview Heights, created a program with Owens Community College in Toledo to train service technicians. And Talan Products, in Cleveland’s Collinwood neighborhood, started an on-the-job training program for metal stamping press operators.

These companies are among several in Northeast Ohio that are doing their part to close today’s skills gap, meaning the mismatch between what skills workers have and the ones employers need.

Ohio CAT President Ken Taylor said educational systems shouldn’t be the only ones preparing today’s students for tomorrow’s jobs. Employers too should play a key role.

“The employer involvement makes a difference because we're the ones who have the most at stake,” he said.

Talan had a good track record for in-house training to upgrade employees’ skills. For example, Miguel Lugo rose from general laborer to plant and tool room manager in less than 10 years. CEO Steve Peplin was confident Talan could train workers, even if they had no manufacturing experience.

“They have to have good mechanical aptitude, a good work ethic and a desire to learn,” he said. “We can take that, teach them and bring them from an entry level to a skilled trade in two years.”

The service technicians’ program isn’t the only way the company has sought to close the skills gap. It is active in I Build America Ohio, part of a national effort to recruit more young people into the construction industry. Taylor said part of running the business must now include community outreach – even speaking to groups of young people – in an effort to change perceptions about blue-collar careers.

“Before, employers didn’t have to do much of anything to find employees,” Taylor said. “They would just come to us.”

Back then, there were enough skilled workers in the pipeline. Today there aren’t. Reasons range from the reluctance of many employers to train workers, to young people not knowing about the good-paying jobs because of the current emphasis placed on going to college.

The Cleveland metro area economy grew by 2.9 percent last year to $139 billion, which was more than any Ohio metro, according to the U.S. Bureau of Economic Analysis. A rebound in manufacturing was a major factor in its growth. The Cleveland metro has the largest economy in Ohio and the 28th largest metro economy in the U.S.

“Middle skills is suffering from a PR problem,” said Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce, which released the “Good Jobs That Pay without a B.A.” report last year

Middle-skills misunderstood

The misperceptions about blue-collar jobs, such as those in manufacturing, may lead to visions of a dying smokestack industry, where people do backbreaking work in dank conditions.

“What they don’t see is that advanced manufacturing is so sophisticated now,” she said. “It’s not a lot of hammering. You might be pressing a button or programming a computer.”

Smith said solving the PR problem also entails discussing pay. She said the earnings differential between workers with only a high school diploma and those with middle-skills training is 25 percent. (For those with at least an undergraduate degree it is about 85 percent.)

“Aligning Opportunities in Northeast Ohio,” a report released in May by Team Northeast Ohio, in partnership with the Cleveland Foundation, focused on middle-skill jobs paying at least $23.19 an hour. Among the manufacturing jobs were millwrights, who build and maintain manufacturing equipment, with a median salary of $65,897 and tool and die makers, machinists who makes tools used in the manufacturing process, with a median of $52,268.

Ohio CAT is having difficulty filling 25 openings for service technicians, with 5 to 7 years experience, despite paying $60,000 to $70,000. Training new workers hasn’t been enough thought to offset a common blue-collar trend: a steady wave of long-time employee retirements thinning the ranks.

Paul Liesem recently retired as senior vice president. His duties now as workforce development consultant include joining with I Build America Ohio to raise the image of blue-collar jobs.

“We’re changing perceptions about the construction industry,” he said. “Everybody doesn’t need to go to a four-year college, “ Liesem said. “So many don’t complete school, end up with a pile of debt and then find out that they really should be doing something with their hands.”

Homegrown

At first glance, Ohio CAT and Talan appear to have little in common.

Ohio CAT’s campus on East Royalton Road is dotted with rows of heavy machinery decked in Caterpillar yellow. The headquarters for the 1,406-employee company is an attractive two-year-old building sporting banks of windows and an entry facade framed in Caterpillar yellow. The 80-employee Talan is headquartered in an old factory on Cochran Road that speaks more to function than aesthetics, covered with panels of gray metal and few windows.

What the two companies share is a drive to tackle the skills gap by providing training.

Ohio CAT first experienced a shortage of service technicians more than two decades ago. In the mid 1990s, it joined with other regional CAT dealers to start a training program in which students alternated between taking classes at Owens Community College and working at the dealer.

Taylor said the approach was later nationally adopted by Caterpillar as the ThinkBIG program. Students can qualify for full tuition reimbursement for an associate’s degree based on grades and other conditions.

Jared Arters and Jacob Squire, both 21, are now service technicians at Ohio CAT after completing the program. Both were in technical education programs in high school, where they learned about ThinkBIG.

“My family always told me, ‘College is overrated for what you want to do,’” Arters said.

Matt Michelson, 30, has worked at the dealer since completing the service technician program in 2012. He wished he had known about the training while he was in high school, because “he had a love for fixing things.” He joined the Marines after graduating because he believed that was his best option since he wasn’t college bound.

“I think they'll always be kids that want to learn with their hands,” Michelson said. “The more exposure they have to programs like this, the more it will help them in choosing a career.”

He’s probably right. There are often 100 applicants for the 10 slots annually allotted to Ohio CAT, said Employment Manager Eileen Toghill, who is in charge of recruiting. Candidates must meet several requirements, including a 3.0 grade point average and passing a mechanical test.

At Talan, help-wanted ads and recruiters almost always worked in attracting qualified press operators and other applicants. Then about five years ago they began coming up empty. The recession hit manufacturing hard. When the economy improved, many who would have been interested in the industry, were scared away fearing layoffs.

“We could have just said, ‘We can’t find people and thrown up our hands,” said Lugo, the plant manager.

Instead, Talan started its own on-the-job-training program for entry-level workers.

Desman Leonard, 20, is among the new employees to take advantage of it. He training to be a press operator and preparing to enter the company’s tool-and-die apprenticeship. Before joining Talan, he held low-wage, dead-end jobs.

“At Talan there's real opportunity to advance in my career path,” said Leonard, whose goal is to become a tool-and-die engineer.

Won’t they leave?

While Ohio CAT and Talan have made training a constant, many employers only commit training dollars for middle-skills training during a good economy, said Daniel Shoag, a visiting associate professor at the Weatherhead School of Management at Case Western Reserve University.

“I think now that the unemployment rate is pretty low, and the labor market is tight, employers are more willing to do that kind of training,” said Shoag, an associate professor at the Harvard Kennedy School.

He said during the recession, employers often cut training programs because it was easy to hire laid-off, experienced workers. Shoag said employer perception about “the size of the skills gap depends on the state of the labor market.”

This differs from other countries, such as Germany and Switzerland, where employer commitment to training middle-skill workers is less cyclical and more ingrained. Schools and employers routinely collaborate on such training as an extensive apprenticeship program. In the U.S., employers who shy away from training say they do so because it is too costly to spend money on employees who may leave.

Both Taylor and Talans’ Peplin said that isn’t the case. Ohio CAT has a safeguard, requiring ThinkBIG employees to repay the tuition reimbursement on a prorated basis should they leave before 2 1/2 years.

Peplin said employees’ motivations for leaving a company have little to do with training.

“We don't really get poached a lot,” he said. “You have to be a desirable workplace, you have to pay enough and you have to nurture your people so that they appreciate you and know that they can have a career at the company.”

Short on Skilled Workers, Employers Offer Training, Chance to Grow: Pathways to Prosperity

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