Manufacturing is Not Dead

The Rise of High-Skill, High-Wage Production Jobs

BY DR. YUSTINA SALEH, ROB SENTZ, AND MEREDITH METSKER  |  March 2018

After decades of job loss and a struggling reputation, manufacturing has made a comeback in the United States. Since the recession, production jobs have increased—and so have the knowledge and skill requirements.

After analyzing hundreds of thousands of job postings, we observed that manufacturers need multi-functional engineering technicians possessing both traditional manufacturing and engineering skills. The result is that today's high-value production worker is a hybrid of a boots-on-the-ground technician and an engineer laser-focused on improving how things get done.

The technical skills required yield competitive wages and also transfer well to other in-demand industries such as finance, professional services, and health care. To ensure the future of domestic manufacturing, educators and employers must recognize the potential of these high-skilled production jobs and work together to train the next generation of workers.

In this paper, we will (1) show the demand for domestic production jobs since the recession, (2) summarize the major skills that employers need, and (3) explain the compensation and transferability for these skill sets.

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Highlights

  • Manufacturing has added nearly one million new jobs since the end of the recession. A growing share of these jobs require postsecondary education.
  • Domestic manufacturing increasingly behaves like a high-tech industry in that it needs a smaller, specialized workforce.
  • Employers need workers who blend traditional production skills (machining, welding, fabrication technologies) with engineering skills (process improvement, quality assurance, design).
  • Workers who successfully blend these skills receive higher wages and, perhaps more importantly, can move up the career ladder in their companies or transition to other industries.

Methodology

We used a diverse set of labor market data sources.

  • First, we considered industry and occupation data from traditional government sources to deduce the overall demand for production jobs.
  • Second, we evaluated nearly 400,000 job postings from 2017 to determine the top skills requested by employers.
  • Third, we analyzed compensation data collected from traditional sources, job postings, résumés, and online profiles to determine whether these skills lead to increased wages.
  • Finally, we used job postings and résumé and profile data to trace how these skills transition to similar occupations in industries outside manufacturing. By blending multiple sources, this methodology overcomes the limits of standard labor taxonomies to show the big economic picture.

What Happened To Manufacturing?

Manufacturing used to be the United States' top employer. During the Industrial Revolution, workers traded hand tools for powered machinery, and one-off projects turned into mass production. Later, during and after World War II, manufacturing dominated the economy.

Then it didn’t.

Between 1990 and 2007, manufacturing lost four million jobs. From December 2007 to January 2010, it shed another two million-plus jobs, making it the hardest-hit industry of the Great Recession. Meanwhile, health care rose to the top with three million new jobs.

To get a clear picture of manufacturing performance over the past three decades, we pulled data from several time periods. The following table shows manufacturing's compared to other industries from 2000 to 2009—just into the recession.

*These CES numbers differ from the CPS number (2.7 million jobs lost).

Table 1. Industry Performance, 2001-2009
Emsi Industry Data

Interestingly, while manufacturing jobs have declined drastically since 1990, output escalated thanks to increased automation, efficiency, and offshoring (Figure 1).

Unfortunately, the decades-long job decline has deterred newer generations from pursuing occupations in manufacturing. Production jobs are stereotyped as dead ends, and students are encouraged to pursue a four-year degree rather than learn a trade. As a result, the manufacturing sector suffers from a skills gap and widespread vacancies, both of which will only worsen as the aging workforce retires.


Figure 1. MANUFACTURING EMPLOYMENT VS REAL OUTPUT, 1990-2017
Authors' estimate of Current Employment Statistics (CES) 1990-2017. Shaded areas represent U.S. recessions as officially reported by NBER. Real output is from U.S. Bureau of Labor Statistics, Manufacturing Sector: Real Output (OUTMS), retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/OUTMS, October 10, 2017.

THE NEW FACE OF MANUFACTURING

Like every other industry, manufacturing has adapted to a technological world. Humans are no longer needed for every simple thing. Automation, robotics, and modern processing power streamline the production environment.

Modern production workers must straddle two spheres: traditional manufacturing and modern manufacturing, or what Deloitte University Press calls the “smart factory.” Workers must keep one foot firmly rooted in the old world of machining and welding, while planting the other in the advanced computer-automated technologies of the future.

Since the Great Recession, manufacturing has grown by nearly one million new jobs (Table 2). While it's unlikely that employment will reach pre-recession levels, we still see fierce demand for workers.


Table 2. Industry Performance 2010-2017
Emsi Industry Data

The BLS's Job Openings and Labor Turnover Survey (JOLTS) (Figure 2) shows an impressive 350% increase in job openings over the past 10 years—a greater increase than those of the fast-growing health care and IT sectors. Unemployment in manufacturing is also extremely low at 2.6% (Figure 3), which is better than many industries.


Figure 2. Analysis of Job Openings from JOLTS, 2007-2017
Analysis of Job Openings from JOLTS, 2007-2017

Figure 3. Analysis of Manufacturing Unemployment, 2010-2017
US Bureau of Labor Statistics

Figure 4. Total Job Postings, 2014-2017
Emsi Job Posting Analytics, 2014-2017

Job postings over the last three years also demonstrate that production jobs are on the rise. In fact, production jobs are on par with IT and business/finance jobs in terms of raw demand (Figure 4).

This uptick in job postings doesn't surprise us. Nearly half of the nine million people working in production jobs are 45 or older (Figure 5), spurring employers to seek younger workers to fill the impending gaps. However, attracting students to training programs is notoriously difficult. Both the National Association of Manufacturers and the American Welding Society predict massive shortages, possibly as soon as 2020.


Figure 5. Industry Age Breakdown, 2017
Emsi Demographic Data

National Skill Clusters

We examined nearly 400,000 production job postings from 2017 to determine the top skills that employers need. Our analysis covers the United States and three individual states: a traditional hub of manufacturing (Michigan); a representative of the West Coast (California); and an emerging region for manufacturing in the Southeast (Tennessee).

As we walk through our analysis, keep two caveats in mind.

  • First, our data is based on the skills listed by employers in their job ads. If an employer needs a particular skill, but doesn't advertise for it, the skill won't show up. Some employers don't post all of their needs online, choosing instead to work directly with local community colleges, workforce boards, and other training providers to build programs that train new workers.
  • Second, advertisements for production jobs tend to include the harder-to-find technical skills that manufacturers need. Our analysis is therefore oriented to advanced positions—hybrids of traditional manufacturing and engineering.

Now let's consider production jobs at the national level. Here are the companies that made the most job postings for production workers in 2017 (Figure 6).


Figure 6. Companies That Posted the Most Jobs for Production Workers, 2017
Emsi Job Posting Analytics, 2017

The postings are dominated by the following categories:

  • Aerospace and defense product manufacturers (Lockheed Martin, United Technologies, Raytheon, Northrop Grumman)
  • Auto manufacturing and parts (General Motors, Tesla, Johnson Controls)
  • Building and construction materials (Oldcastle, Mohawk)
  • Consumer goods (Ashley Furniture, Honeywell, Corning)
  • Health care and biotech (Siemens, Thermo Fisher Scientific)

The most in-demand skills can be sorted into four groups, or skill clusters:

  1. Traditional Production Skills: Welding, machining, fabrication, etc.
  2. Computer-Automated Technologies (CAT): Computerized technologies that aid in the design and creation of products.
  3. Six Sigma: Engineering and process improvement methodologies that improve efficiency and effectiveness by removing waste and reducing variation.
  4. Good Manufacturing Practices (GMP): Quality control processes that ensure the product meets quality requirements.

The following graphic (Figure 7) illustrates three primary characteristics of these skill clusters and the intricate relationships between them:

  1. Prominence – Each skill cluster is critical to production jobs, but some skill clusters are especially prominent, appearing more frequently in the job postings. In our graphics, the cluster on the upper left is the most prominent, followed by upper right, lower right, and lower left.
  2. Figure 7
  3. Correlation – Certain skills are unique to the cluster (like ARC welding in traditional manufacturing); they don't often occur in other clusters. These skills are portrayed near the outside of the circle, away from the overlapping skills at the center. Skills that are still highly correlated to the cluster, but that also appear in other clusters (such as 3D modeling in computer-automated technologies) are positioned closer to the core of the chart.
  4. Overlap – Finally, some skills are highly correlated to multiple clusters. For example, continuous process improvement occurs in both the Six Sigma and the GMP clusters. When a skill is shared by two clusters, this likely indicates that companies employ workers with this skill in a variety of jobs.

When we examined the top four skill clusters for production jobs across the U.S., we found that two of the clusters (traditional and computer-automated technologies) are more aligned with what we typically associate with production workers. The other two clusters (Six Sigma and GMP) are more oriented toward engineering. See Figure 8 below.


FIGURE 8. TOP FOUR SKILL CLUSTERS IN THE U.S.
Emsi Job Posting Analytics, 2017

1.    Traditional Skills – Traditional production skills remain in high demand and are the most prominent across all production job postings. Despite the increasing automation of tasks, employers still place a premium on tried-and-true production skills like welding, machining, and brazing. Below, and in each of the following graphics, the numbered list indicates the top skills found in the cluster.


FIGURE 9. TRADITIONAL PRODUCTION SKILLS, MANUFACTURING'S MOST PROMINENT SKILL CLUSTER TRADITIONAL MANUFACTURING

TRADITIONAL MANUFACTURING

  1. Arc Welding
  2. Plasma Cutting
  3. Flame Cutting
  4. Brazing (Metal Work)
  5. Gas Metal Arc Welding
  6. Plasma Arc Welding
  7. Shielded Metal Arc Welding
  8. Gas Tungsten Arc Welding
  9. Notching
  10. Annealing (Metallurgy)
FIGURE 9. TRADITIONAL PRODUCTION SKILLS, MANUFACTURING'S MOST PROMINENT SKILL CLUSTER TRADITIONAL MANUFACTURING
Emsi Job Posting Analytics, 2017

2.    Computer-Automated Technologies (CAT) – The CAT cluster (Figure 10) is where manufacturing's expanding automation shows up. CAT involves the knowledge of processes and experience with technology to design and create products. Employers frequently look for people who have A) strong working knowledge of trigonometry, computer-aided manufacturing, and computer design, and B) experience in blueprinting, 3D modeling, Siemens NX (among other tools), electrical discharge machining, and tolerance (measuring and monitoring the permissible limits of variation when creating products and parts).

Figure 10. COMPUTER-AUTOMATED TECHNOLOGIES (CAT), MANUFACTURING'S SECOND MOST PROMINENT SKILL CLUSTER COMPUTER-AUTOMATED TECHNOLOGIES

Computer-Aided Manufacturing

  1. Computer-Aided Manufacturing
  2. Computer-Aided Design
  3. SolidWorks (CAD)
  4. Electrical Discharge Machining
  5. Blueprinting
  6. Trigonometry
  7. Coordinate Measuring Machine (CMM)
  8. Siemens NX
  9. 3D Modeling
  10. Geometric Dimensioning and Tolerancing
Figure 10. COMPUTER-AUTOMATED TECHNOLOGIES (CAT), MANUFACTURING'S SECOND MOST PROMINENT SKILL CLUSTER COMPUTER-AUTOMATED TECHNOLOGIES
Emsi Job Posting Analytics, 2017

3.    Six Sigma or Lean Process – Six Sigma is a data-driven methodology that improves performance by removing waste and reducing variation. Manufacturers operate under intense and precise parameters, so it is imperative that workers maintain these high standards. Examples of the top knowledge, skills, and abilities related to Six Sigma are continuous process improvement, business process improvement, value stream mapping, operational excellence, and Kanban Principles.

Figure 11. SIX SIGMA OR LEAN PROCESS, MANUFACTURING'S THIRD MOST PROMINENT SKILL CLUSTER

Six Sigma

  1. Continuous Improvement Process
  2. Business Process Improvement
  3. Value Stream Mapping
  4. Operational Excellence
  5. Kanban Principles
  6. Change Management
  7. DMAIC
  8. Gemba
  9. Material Flow
  10. Manufacturing Operations
  11. Material Requirements Planning
Figure 11. SIX SIGMA OR LEAN PROCESS, MANUFACTURING'S THIRD MOST PROMINENT SKILL CLUSTER
Emsi Job Posting Analytics, 2017

4.    Good Manufacturing Practices – This final cluster is about quality control. GMP ensures that the product meets the necessary quality requirements, whether the requirements are internal, customer-driven, or imposed by government administrations such as the Food and Drug Administration. This perfection is achieved only through constant monitoring and perpetual process improvement.

FIGURE 12. GOOD MANUFACTURING PRACTICES, MANUFACTURING'S FOURTH MOST PROMINENT SKILL CLUSTER

Good Manufacturing Practices

  1. Quality Management Systems
  2. Continuous Quality Improvement (CQI)
  3. Corrective and Preventive Actions
  4. Advanced Product Quality Planning
  5. Certified Global Meeting Planner
  6. Continuous Improvement Process
  7. Failure Mode Effects Analysis
  8. Business Process Improvement
  9. ISO/TS 16949
  10. ASQ Certified
FIGURE 12. GOOD MANUFACTURING PRACTICES, MANUFACTURING'S FOURTH MOST PROMINENT SKILL CLUSTER
Emsi Job Posting Analytics, 2017

Overall, the national skill cluster shows that manufacturing employers need workers with traditional production skills mixed with engineering-type skills. The demand for such a broad skill set is eye-catching, especially in this era of hyper-specialization. Workers must understand the tools of the trade as well as the advanced machinery dominating the field.

Also of note is how frequently continuous process improvement and business process improvement appear in the job postings. This indicates a strong need for workers well-versed in the practices that help the company eliminate waste, ensure the production environment operates at a high level, vigilantly track quality standards, and so on. Even small mistakes can have huge ramifications. We're all well aware of the massive financial and public relations damage of product recalls. Workers who successfully master and blend these skill sets are critical to maintaining a high-functioning workplace, and are therefore keenly sought after.

Soft Skills

While this research is focused on technical skills, we would be remiss to skip the important soft skills that also show up in production job postings. Manufacturers often value skills like leadership, problem solving, innovation, computer literacy, and writing just as much as they value the technical skills. In the following graphic (Figure 13), we also see that workers need to be proficient in Excel, Outlook, PowerPoint, and even Spanish. This goes to show that in every industry, a well-rounded worker is highly valued.


FIGURE 13. THE TOP SOFT SKILLS MENTIONED IN MANUFACTURING JOB POSTINGS
Emsi Job Posting Analytics, 2017

Regional Skill Clusters

MICHIGAN

As you'd expect, auto manufacturing dominates Michigan's manufacturing scene. General Motors, Ford, Chrysler, and many part suppliers published the most job postings in 2017.

FIGURE 14. Top Employers in Michigan
Emsi Job Posting Analytics, 2017

In a deviation from the national picture, Michigan has two new clusters: vehicles and industrial design, which are closely aligned to the state's auto production specialization. The vehicles cluster encompasses production skills primarily related to the specialized needs of auto, aerospace, and defense. Industrial design is the creation of products and systems optimized for manufacturability and efficiency.

Vehicles and traditional manufacturing are both characterized by skills like hydraulics, preventive maintenance, predictive analysis, and pneumatics. However, vehicles is more specialized, defined by its own set of skills like engines, steering, and transmissions.

We saw strong overlap between GMP and Six Sigma at the national level, but here in Michigan we observe an overlap between industrial design and Six Sigma. Five key skills appear in both clusters:

  1. DMAIC (Define, Measure, Analyze, Improve, Control) – A data-driven strategy to improve any kind of process.
  2. Design for Six Sigma – In this case, Design for Six Sigma “is used to design or re-design a product or service from the ground up.”
  3. DMADV (Define, Measure, Analyze, Design, Verify) – A procedure applied to new processes to ensure Six Sigma quality.
  4. CAPA (Corrective and Preventive Actions) – Actions that eliminate existing and potential errors in processes.
  5. Kanban Principles – A lean production technique that uses consumer supply and demand to regulate production and workflow.

Across the board, there is a strong fusion between production (traditional manufacturing, vehicles) and process improvement (industrial design, Six Sigma).

Figure 15. MICHIGAN'S TOP FOUR SKILL CLUSTERS
Emsi Job Posting Analytics, 2017

FIGURE 16. VEHICLES, MICHIGAN'S MOST PROMINENT CLUSTER

Vehicles

  1. Machining
  2. Hydraulics
  3. Engines
  4. Steering
  5. Preventive Maintenance
  6. Transmission
  7. Mechanics
  8. Optical Comparator
  9. Pneumatics
  10. Blueprinting
  11. Predictive Analytics
FIGURE 16. VEHICLES, MICHIGAN'S MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 17. TRADITIONAL MANUFACTURING, MICHIGAN'S SECOND MOST PROMINENT CLUSTER

Traditional Manufacturing

  1. Metal Inert Gas (MIG) Welding
  2. ARC Welding
  3. Brazing (Metal Work)
  4. Hydraulics
  5. Pneumatics
  6. Predictive Analytics
  7. Programmable Logic Controllers
  8. Preventive Maintenance
  9. Human-Computer Interaction
  10. Robotic
FIGURE 17. TRADITIONAL MANUFACTURING, MICHIGAN'S SECOND MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 18. SIX SIGMA, MICHIGAN'S THIRD MOST PROMINENT CLUSTER

Six Sigma

  1. Continuous Improvement Process
  2. Value Stream Mapping
  3. Kanban Principles
  4. Lean Six Sigma
  5. DMADV
  6. Business Process Improvement
  7. Corrective and Preventive Actions
  8. Human Factors and Ergonomics
  9. DMAIC
  10. Operational Excellence
  11. Change Management
  12. Design For Six Sigma
FIGURE 18. SIX SIGMA, MICHIGAN'S THIRD MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 19. INDUSTRIAL DESIGN, MICHIGAN'S FOURTH MOST PROMINENT CLUSTER

Industrial Design

  1. Product Design
  2. DMADV
  3. Corrective and Preventive Actions
  4. Design for Six Sigma
  5. DMAIC
  6. Advanced Manufacturing
  7. Value Stream Mapping
  8. Computer-Aided Engineering (CAE)
  9. New Product Development
  10. Design for Manufacturability
  11. Kanban Principles
FIGURE 19. INDUSTRIAL DESIGN, MICHIGAN'S FOURTH MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

CALIFORNIA

California is dominated by aerospace and defense, along with auto manufacturers. As a result, California's top skill clusters are similar to Michigan's, but the order is slightly different and GMP replaces traditional manufacturing. Vehicles is still the most prominent cluster and is now closely followed by industrial design, indicative of the advanced engineering going on throughout the state. Six Sigma is our third cluster. And fourth, we see that GMP has returned, which is likely due to California's high concentration of biotechnology and food production.


FIGURE 20. MANUFACTURING EMPLOYERS IN CALIFORNIA WITH THE MOST JOB POSTINGS IN 2017
Emsi Job Posting Analytics, 2017

There is also one skill that, for the first time in our analysis, appears in three clusters: corrective and preventive actions (CAPA). It appears at the overlap of industrial design, Six Sigma, and GMP. According to the FDA, CAPA is a key skill meant to ensure that rules, regulations, and processes in a variety of tasks are followed and documented.


FIGURE 21. CALIFORNIA'S TOP FOUR SKILLS CLUSTERS
Emsi Job Posting Analytics, 2017

FIGURE 22. VEHICLES, CALIFORNIA'S MOST PROMINENT CLUSTER

Vehicles

  1. Hydraulics
  2. Electrical Wirings
  3. Engines
  4. Programmable Logic Controllers
  5. Pneumatics
  6. Production Equipment Controls
  7. Blueprinting
  8. Wiring Diagram
  9. Predictive Analytics
  10. Predictive Maintenance
FIGURE 22. VEHICLES, CALIFORNIA'S MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 23. INDUSTRIAL DESIGN, CALIFORNIA'S SECOND MOST PROMINENT CLUSTER

Industrial Design

  1. Mechanical Engineering
  2. CATIA
  3. 3D Modeling
  4. Creo Elements/Pro
  5. Design For Manufacturability
  6. Siemens NX
  7. Product Data Management
  8. Corrective and Preventive Actions
  9. Ergonomics
  10. Machinery Design
FIGURE 23. INDUSTRIAL DESIGN, CALIFORNIA'S SECOND MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 24. SIX SIGMA, CALIFORNIA'S THIRD MOST PROMINENT CLUSTER

Six Sigma

  1. Continuous Improvement Process
  2. Lean Six Sigma
  3. Business Process Improvement
  4. Value Stream Mapping
  5. DMAIC
  6. Kanban Principles
  7. Change Management
  8. Operational Excellence
  9. Gemba
  10. Corrective and Preventive Actions
FIGURE 24. SIX SIGMA, CALIFORNIA'S THIRD MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 25. GOOD MANUFACTURING PRACTICES, CALIFORNIA'S FOURTH MOST PROMINENT CLUSTER

Good Manufaturing Practices

  1. Hazard Analysis and Critical Control Points
  2. Product Quality Assurance
  3. Corrective and Preventive Actions
  4. Pharmaceuticals
  5. ISO 13485
  6. Product Quality Management
  7. ASQ Certified
  8. ISO 9000
  9. Biotechnology
  10. Good Clinical Practice
  11. Advanced Product Quality Planning
FIGURE 25. GOOD MANUFACTURING PRACTICES, CALIFORNIA'S FOURTH MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

Note that while Michigan had two classic production skill clusters (traditional manufacturing and vehicles) and two engineer-type skill clusters (industrial design and Six Sigma), California has only one traditional cluster (vehicles) and three engineer clusters (industrial design, Six Sigma, and GMP). Again, this demand for more advanced skills is influenced by California's specialization in aerospace/defense products, automobiles, and biotech.

TENNESSEE

Compared to California and Michigan, Tennessee's manufacturing scene is small, but diverse. A wide variety of industries call Tennessee home:

  • Automobiles and auto parts (Bridgestone, Denso, Valvoline, Tesla, Nissan)
  • Aerospace (Teledyne)
  • Food (Coca-Cola, Tyson, Rich Products)

FIGURE 26. MANUFACTURING EMPLOYERS IN TENNESSEE WITH THE MOST JOB POSTINGS IN 2017
Emsi Job Posting Analytics, 2017
FIGURE 27. TENNESSEE'S TOP FOUR SKILL CLUSTERS
Emsi Job Posting Analytics, 2017

Like the nation, traditional manufacturing is Tennessee's most prominent cluster. Six Sigma moves into the second most prominent spot and is the only cluster to appear in high demand across the U.S. and in each of our state regions. This indicates that Six Sigma is critical to a wide range of production jobs. Vehicles comes in at third most prominent, followed by CAT. Note the tight connection between traditional manufacturing, vehicles, and CAT with one recurring skill: machining. Whereas California was more oriented to engineering, employers in Tennessee are placing a higher premium on workers with production technology skills.


FIGURE 28. TRADITIONAL MANUFACTURING, TENNESSEE'S MOST PROMINENT CLUSTER

Traditional Manufacturing

  1. Metal Inert Gas (MIG) Welding
  2. Welding
  3. Gas Metal Arc Welding
  4. Brazing (Metal Work)
  5. ARC Welding
  6. Machining
  7. Oxy-Fuel Welding and Cutting
  8. Fabrication
  9. Computer Numerical Control (CNC)
  10. Blueprinting
FIGURE 28. TRADITIONAL MANUFACTURING, TENNESSEE'S MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 29. SIX SIGMA, TENNESSEE'S SECOND MOST PROMINENT CLUSTER

Six Sigma

  1. Lean Manufacturing
  2. Continuous Improvement Process
  3. Six Sigma Methodology
  4. Value Stream Mapping
  5. Corrective and Preventive Actions
  6. Kanban Principles
  7. Material Requirements Planning
  8. Statistical Process Controls
  9. Gemba
  10. Cycle Time Variation
  11. Process Flow Diagrams
FIGURE 29. SIX SIGMA, TENNESSEE'S SECOND MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 30. VEHICLES, TENNESSEE'S THIRD MOST PROMINENT CLUSTER

Vehicles

  1. Engines
  2. Hydraulics
  3. Pneumatics
  4. Electrical Systems
  5. Programmable Logic Controllers
  6. Powertrain
  7. Welding
  8. Machining
  9. Predictive Maintenance
  10. Fabrication
FIGURE 30. VEHICLES, TENNESSEE'S THIRD MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

FIGURE 31. COMPUTER-AUTOMATED TECHNOLOGIES, TENNESSEE'S FOURTH MOST PROMINENT CLUSTER

Computer-Automated Technologies

  1. AutoCAD
  2. SolidWorks (CAD)
  3. Machining
  4. Computer-Aided Design
  5. Computer Numerical Control (CNC)
  6. Process Flow Diagrams
  7. Prototype (Manufacturing)
  8. Advanced Product Quality Planning
  9. Failure Mode Effects Analysis
  10. Product Design
FIGURE 31. COMPUTER-AUTOMATED TECHNOLOGIES, TENNESSEE'S FOURTH MOST PROMINENT CLUSTER
Emsi Job Posting Analytics, 2017

Compensation and Transferability

Now that we have a handle on the skills, we want to consider two important questions. First, what are employers willing to pay for the production skills we've discussed? Second, are these skills creating upward mobility or transferability for those who attain them?

GOVERNMENT COMPENSATION DATA

Using government data to consider wages for production workers, we see that the mean wage is $15.90 per hour or $33K per year—far below the national mean wage for all occupations ($23.64 per hour, $49K per year; see Figure 32 below). This average is also below the wages of many jobs that don't require formal postsecondary education, which means jobseekers lacking a college degree aren't likely to choose manufacturing when they could earn better wages somewhere else.


FIGURE 32. ANNUAL COMPENSATION FOR PRODUCTION OCCUPATIONS IN THE UNITED STATES, 2016

However, existing taxonomies within government data struggle to tell the whole story. The low hourly wage is likely weighed down by the large number of workers engaged in on-the-job training (OJT), during which they're paid less. If employees leave the company without completing the training, they never reach a higher wage tier. The company must then hire replacements at the same OJT level, and so on. Government data cannot capture this nuance, so we see perpetually low average wages.

SKILLS-BASED COMPENSATION DATA

To derive a more accurate wage estimation for these new production jobs, we used a new skills-based compensation model. But first, a quick note about what makes wage analysis so tricky.

Throughout this paper, we've observed that an increasing number of manufacturing jobs straddle engineering and production. Yet the taxonomies within government data can't account for this blended nature. For instance, government data would classify a new job as either machine operator or mechanical engineer, but in reality, it's both.

This is an unavoidable challenge when categorizing emerging occupations or skills. Emerging occupations and skills hardly ever fall out of the sky. Rather, they are the byproducts of two or three types of work coming together to solve a new problem, or to create a better approach for solving an old one. We observed the same phenomena in our recent data science research: statistics and mathematics joined with computer science and software to create data science.

The same has occurred in manufacturing. The new hybrids of traditional production workers and engineers should be thought of as engineering technicians or technologists. But the job is far too nascent for government data to capture with its current categories.

HIGHER SKILLS LEAD TO HIGHER WAGES

To determine the wages associated with our skill clusters, we turned to a new compensation model that uses traditional sources mixed with observations taken from job postings and professional profiles. We then grouped the skills into the same clusters: traditional, CAT, vehicles, Six Sigma, GMP, and industrial design. This allowed us to determine the wages specific to each cluster.

We found that if workers possess these much-needed skills, compensation is greater than as indicated by government data (Table 3). For instance, the weighted average for workers who possess vehicle production skills is $48,585 per year. That’s significantly higher than the $33,000 mentioned earlier, which captures only pure production workers. Furthermore, if they possess 10 or more skills, the wage jumps to $57,000-$67,000, well beyond the high end of the wage curve we received from the government data. Likewise, workers proficient in skills related to GMP, industrial design, and Six Sigma are all paid greater wages.


TABLE 3. THE EFFECT OF UPSKILLING ON MANUFACTURING SALARIES COMPENSATION BY SKILLS FOR THE SIX CLUSTERS ANALYZED
Emsi Job Posting Analytics, 2017

Additionally, our research indicates that workers with traditional production experience can successfully progress into higher-paying positions when they acquire industrial design, GMP, and Six Sigma skills. Workers in the classic production areas are introduced to principles and techniques closely related to engineering, even business. Returning to school for an advanced engineering degree would prepare them for increased responsibility or a management position, both of which offer higher wages.

For example, one industrial designer at Texas Instruments began her studies at a community college, went on to earn her Ph.D., and is now working as an industrial engineer and solving complex business problems at the company.

Job Titles

To round out the picture, let's relate our skill clusters to associated job titles and typical education levels. In Table 4, we see the top job titles associated with each of our major skill clusters. For instance, “welder” is the most common job possessed by people with traditional skills. Workers with Six Sigma skills are most often manufacturing engineers or production supervisors.

As we explored the job titles associated with the skill clusters, we found them to be surprisingly generic. In other high-demand industries like IT and health care, the job titles are more specific. We also found that employers tend to overstate education requirements. For instance, some manufacturing plants may “require” a bachelor's degree, but will hire at the associate's level.

That said, here is a list of the most common job titles in each skill cluster. Each title is also associated with a specific level of education, based on the education reported by individuals currently working these jobs. The highest-paying skill clusters (GMP, industrial design, Six Sigma) are generally oriented toward engineering and tend to require bachelor's degrees. Note that for some manufacturing engineers/production supervisors, the required education is a high school diploma, yet they still earn decent wages thanks to their Six Sigma skills.


Table 4. Top Job Titles Associated With Manufacturing Skill Clusters
Emsi Job Posting Analytics, 2017

MANUFACTURING SKILLS ARE TRANSFERABLE TO OTHER INDUSTRIES

Our final question is this: Do these skills prepare workers for competitive career pathways—promotions within a company or transitions into similar positions outside manufacturing?

The answer is yes.

We've already noted that workers can increase their wages by acquiring advanced skills that qualify them for higher positions. These positions may exist within the same company. But related careers also abound outside manufacturing.

Opportunities are especially plentiful for workers with Six Sigma skills. Not only are Six Sigma skills useful in non-production departments within a company (departments like sales, operations, and finance), they're also in high demand within other industries. Figure 33 below provides three quick examples. The figure illustrates the distribution of demand for Six Sigma skills among three fast-growing, high-wage disciplines outside manufacturing: 1) professional services (legal, PR, accounting, etc.), 2) health care, and 3) finance.

Let's paint a picture. Say a young production worker earns $25 an hour as a welder or machine operator at a manufacturing company. While working part- or full-time, they acquire an engineering degree (or certificate) that provides Six Sigma-related skills. Now they transition into a quality assurance engineering role, which boosts their pay to $35 an hour. Once they gain experience with business process improvement, they take a few finance and accounting courses and move into a business role—within the same company or perhaps at a different organization. Given our data findings, such a pathway is very possible.


FIGURE 33. SIX SIGMA SKILLS APPEARING IN PROFESSIONAL SERVICES, HEALTH CARE, AND FINANCE INDUSTRIES
Emsi Profile Data, 2017

FIGURE 34. SIX SIGMA SKILLS IN HEALTH CARE

Health Care

  1. Business Process Improvement
  2. Quality Management Systems
  3. Statistical Process Controls
  4. Lean Six Sigma
  5. Supply Chain Management
  6. CAPA
  7. Failure Mode Effects Analysis
  8. ISO 13485
  9. Material Requirements Planning
  10. Continuous Improvement Process
  11. Good Manufacturing Practices
  12. Change Management
FIGURE 34. SIX SIGMA SKILLS IN HEALTH CARE
Emsi Job Posting Analytics, 2017

FIGURE 35. SIX SIGMA SKILLS IN FINANCE

Finance

  1. Lean Six Sigma
  2. Statistical Process Controls
  3. Value Stream Mapping
  4. Continuous Improvement Process
  5. Technology Strategies
  6. Project Management Professional
  7. Change Management
  8. Information Technology Management
  9. Manufacturing Operations
  10. DMAIC
  11. Business Transformation
FIGURE 35. SIX SIGMA SKILLS IN FINANCE
Emsi Job Posting Analytics, 2017

FIGURE 36. SIX SIGMA SKILLS IN PROFESSIONAL SERVICES

Professional Services

  1. Quality Management Systems
  2. Supply Chain Management
  3. Engineering Management
  4. Material Requirements Planning
  5. Value Stream Mapping
  6. Enterprise Resource Planning
  7. Inventory Control
  8. DMAIC
  9. Statistical Process Controls
  10. Continuous Improvement Process
FIGURE 36. SIX SIGMA SKILLS IN PROFESSIONAL SERVICES
Emsi Job Posting Analytics, 2017

Conclusion and Application

How do we solve the manufacturing talent shortage? Collaboration is vital. Below, we recommend a few first steps for employers, educators, students, and parents.

Employers

  1. Communicate the exciting possibilities. Young jobseekers don't naturally view manufacturing as a world of opportunity. It's also quite daunting to face job postings that require advanced skills and education. Hence, businesses should work extra hard to communicate compelling career pathways clearly marked with attainable skills at each level.
  2. Keep expectations realistic. The more skills and education are required, the fewer jobseekers will apply. Companies may consider opening more jobs to people with less than a bachelor's degree in order to increase the applicant pool. They can also invest in workforce and education programs that help younger and transitioning workers.
  3. Be willing to pay. Advanced skills require significant time and effort. If jobs pay too little, even at the entry level, young workers will likely opt for jobs in other industries that pay roughly the same (or higher) and require less training.

Educators and Employers

  1. Partner together. Community colleges are already attempting to bridge the manufacturing skills gap with workforce development programs. Like the eight winners of the Siemens-Aspen Community College STEM Award, or like Boeing and five Puget Sound community colleges, educators and employers can forge successful partnerships that train students and fill empty positions.
  2. Combine data with ground intel. To ensure that training programs meet employer demand, colleges should use labor market data to assess the region's needs, then validate those needs through conversations with employers on the ground.
  3. Communicate. Columbus State Community College has developed a wildly popular electromechanical manufacturing technology program—and an impressive marketing strategy to boot. Colleges can follow Columbus State's example as they communicate high-wage, in-demand job opportunities to prospective students.
  4. Provide work experience. Internships, apprenticeships, and work/study arrangements are incredibly valuable for students, colleges, and employers alike. Students gain hands-on experience, colleges earn higher placement and success rates, and employers hire better prepared workers.

STUDENTS AND PARENTS

  1. Get informed. Lack of knowledge about the labor market leads to missed opportunities—such as manufacturing. Instead of trusting stereotypes, gut instinct, or personal opinion, students and parents should research solid data before making decisions about their education and career.
  2. Start the conversation early. Long before college, students and parents should be deep in career exploration. What jobs are in demand? How much do they pay? What skills and education do they require? Do the skills stack and transfer easily? Does this career open the door to multiple opportunities, or is it a dead end?

The Future

In a post-recession renaissance, modern manufacturing has emerged with a remarkable new look. It's easy to bemoan the job loss that hit manufacturing in the 21st century, but that would be to ignore the industry's bright gift for the future: high-demand, high-wage careers with a fusion of traditional hands-on skills and tech-heavy engineering.

Yes, there are fewer jobs to go around, but the remaining jobs demand greater proficiency in a wider variety of skills. These jobs also provide great stepping stones to careers in other growing industries.

It's up to colleges and manufacturing companies to spread the word about these promising opportunities and help students navigate an exciting new world of highly educated, multi-skilled employees.

Emsi provides high-quality labor market data and expert analysis to professionals in higher education, economic development, workforce development, commercial real estate, and talent acquisition. Since 2000, hundreds of institutions and employers across the US, UK, and Canada have used Emsi to align programs with regional needs, recruit and retain students, equip students with career visions, support local business activity, and hire the right talent. Learn more at www.economicmodeling.com. Follow us @desktopecon or on LinkedIn.

For more information about this report or Emsi data, contact Rob Sentz at rob@economicmodeling.com.