Your competition can purchase the same equipment you have. Your competition can be located in close proximity to your customers. Your competition can model your strategy, or conceive a stronger one. Your competition can hire the same lean manufacturing consultants to implement improved processes.
So, what, then, is the real point of differentiation in the marketplace? It’s your people—the men and women on your team who have broad market and customer expertise, and deep technical knowledge. It’s your ability to retain the talented people you have today and attract the right new talent as you grow in the future.
And therein lies the problem—we are facing an unprecedented lack of skilled labor in the U.S., and it is impacting businesses everywhere. You feel it every day in your printing organizations. The lack of available skilled talent when it comes to prepress and ink technicians, press operators, customer service expertise, technical customer-focused field knowledge and so on is directly impacting your ability to grow business.
You are not alone. What was a frustrating nuisance in the past has now become a full-scale crisis, and it is affecting printers large and small across the U.S. [infogram id=”0cc24880-d837-46a0-b009-c20c3b6bf3bc” prefix=”2P2″]
Skilled Labor
Last year marked the first time since 2007 that a labor shortage was directly slowing and impeding job growth. The U.S. Department of Labor (DOL) reported 6.2 million open jobs just a few months ago in June, up 8 percent from May. More than 52 percent of business owners reported no qualified applicants for the open positions at their firms. Employer demand for labor now appears to be greater than the supply and the so-called “Silver Tsunami” of Baby Boomer retirements is starting to crash.
A recent Booz & Co. study of more than 1,000 CEOs from around the world found the No. 1 business concern among all respondents is the availability of skilled labor. Not professional roles, but those more traditional “skilled trades” roles, often requiring a high school degree and vocational training or an apprenticeship. Eighty-four percent of the CEOs polled stated there is a talent shortage in manufacturing in particular, with six out of 10 open production positions going unfilled due to a talent shortage.
This leads us to ask: How did we arrive at this point and, more importantly, what can we do to solve the problem?
We are experiencing an unprecedented confluence of five significant factors contributing to the current labor shortage; the aforementioned Silver Tsunami of Baby Boomer retirements, a rapid period of economic expansion, a significant rise in “drop-outs” from the labor force, market disconnects between the need for and investment in training, and a historic decline in real manufacturing wages.
The Silver Tsunami
The Silver Tsunami is a phrase that was coined to refer to the economic implications of the aging workforce and the onset of Baby Boomer retirements. In June 2016, the Bureau of Labor Statistics (BLS) published an alarming report that stated the year 2020 will mark the tipping point in which, for the first time in U.S. history, people 65 years of age and older will outnumber people 5 years of age and younger. The same study found that by 2022, more than 25 percent of the U.S. workforce will be 55 years of age or older, up from 14 percent in 2002.
All of this means we are entering a phase over the next five years where roughly half of U.S. businesses will lose 10 percent to 20 percent of their workforce due to retirement. We are currently in the midst of the third-longest period of economic growth in U.S. history. We have the lowest level of jobless claims since 1973 and more than 700,000 new manufacturing jobs have been created since 2010.
There are roughly 10 million working age men, primarily “blue-collar,” missing from the U.S. labor force, which represents roughly 20 percent of the total workforce with a high school diploma or less. Depending on which study you read, you can find various explanations as to the cause of this declining labor force participation rate, most of which focus on supply-side factors or demand-side factors. One thing is certain—there is a growing number of people who lack the basic skills needed for today’s jobs.
Investment in Training
Data from the DOL shows formal apprenticeships in manufacturing are down 40 percent since 2003, and currently less than 1 percent of the U.S. manufacturing workforce is in any type of formal apprenticeship. To put this figure in perspective, the U.S. currently has roughly 285,000 people in any type of formal apprenticeship, while Germany has roughly 1.4 million. The reasons for this are numerous, but here is one: Thin margins can make it difficult for employers to invest long term in creating their own workforce talent pool, and training in the U.S. is typically treated as an expense rather than a long-term investment in talent.
In the printing industry in particular, this lack of apprenticeship investment results in companies using traditional, reactive approaches, such as hiring from competitors and enforcing mandatory overtime, in order to fill gaps in the labor force and meet customer needs.
Since 2003, real wages from manufacturing workers declined by 4.4 percent, approximately three times faster than for U.S. workers as a whole. There are many theories for the decline in manufacturing wages, but the net effect on the printing industry is that young people don’t see much future earning potential and refrain from entering the industry.
Finding Answers
Now that we understand the causes, what are some potential solutions we can undertake as an industry? First, the printing industry a as whole does a poor job of marketing itself to young people. If today’s youth happen to think about the industry at all, they view printing businesses as old, dying institutions in a modern world. This means we need to look at creative and engaging ways to market our industry to the new generation of students that is not going to college.
Roughly 40 percent of today’s high school graduates do not move on to a four-year college. This means there is a big opportunity for the printing industry to invest in local high schools, junior colleges and trade schools. We need to present the printing industry as a modern one, with incredible technology and the offer of long-term career opportunities that come with increasing wages, employment security and no college debt.
We need to invest in long-term training and apprenticeships. We should be working together to fund and support programs like the Phoenix Challenge at the high school and college levels. We should co-invest, or offer industry support, for innovative new apprenticeship programs like FlexoTech. There is also opportunity for our numerous trade organizations to work together to fund print-industry specific marketing campaigns to build overall awareness.
Recruitment Techniques
We also need to consider alternative ways to source new talent. Our daily challenge of finding skilled labor was the reason we created GoGetter, a recruiting platform specific to the skilled trades that offers an easier way for companies looking for specific skills to reach talent.
There are also many company-specific approaches to solve the problem as well. For example, we know of one company in the industry that has had success by coming up with the innovative approach of partnering with local churches and encouraging youth to take internships and full-time positions. Another company in a rural area of the Midwest has invested substantial time in developing a formal apprenticeship program, dedicated specific equipment and full-time personnel to the program, and is now training its own in-house talent.
Working Together
The bottom line is printing is not going away, and the current crisis in our industry demands a strong call-to-action. The lack of talent in printing (and manufacturing in general) is a broad socio-economic problem, and one that is not easily solved. To the extent that we make progress in our industry, we must work together as business owners to fund innovative ideas and programs, industry marketing campaigns and formal apprenticeship schools. Most of all, we need to develop unique approaches to encourage today’s youth to see printing as a modern industry with a challenging, fast-paced environment offering great career potential!
About the Authors: Brendan Kinzie is a senior general management executive with global experience specializing in business startups and turnarounds. In the past, he worked for and with such industry leaders as E&J Gallo Winery, Constellation Brands, The Wine Group and AB InBev. Brendan is currently a general manager of Eurostampa, a 51-year-old, family-owned, premium wine and spirits label printer headquartered in Piedmont, Italy, with facilities in the Napa Valley, Scotland, France, Ohio and Guadalajara, Mexico. Brendan is an angel investor and active adviser to several entrepreneurial businesses operating in the tech, renewable energy, and wine and spirits sectors, and resides in Napa, CA.
James Stone is director of new business development at Eurostampa. He has extensive expertise in premium packaging, with more than 15 years of experience in the wine and spirits industry. James has been part of the founding team of two very successful startup printing companies in Napa and Modesto, CA. Prior to working in the print industry, he owned and operated a successful screen-printing and apparel company in California. His company specialized in branding and producing promotional products for many recognizable clients, including five of the top ski boat builders in the U.S. James was also instrumental in the creative design, concept blueprint and production for the famous Cowboy-Up western apparel brand, and created the brand identity for multiple wineries. He is also the co-founder of VinEquities. James currently serves on the FTA Board of Directors and FFTA Board of Trustees.
In 2015, Brendan and James, with another partner Fred Dale, started GoGetter. GoGetter was born out of the passion to rebuild America by solving the skilled trades crisis with an app that instantly connects people with skills with companies that need them. The pair found the current methods for reaching men and women in the skilled trades are broken or inadequate. Most don’t have a resume or are not adept at creating one, they don’t have large networks, and current job posting sites are poor at best. GoGetter’s app is currently in beta form..
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