ARC's Dick Hill's Skills Gap Presentation from ARC's 2008 Industry Forum in Orlando, FL.

1. Addressing the Skills Gap in
Manufacturing Operations
Dick Hill
Vice President
ARC Advisory Group
Dhill@arcweb.com

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What Skills Uncertainty Gap?
StaffingLevel
Safe Operating Level
Gap
Skilled and Working For You
TimeToday

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Changing Workforce Demographics
Persons 65 and Over - US Census 2002
The paradox is that although workers
are getting older on average, the
average retirement age has dropped
to 58 years.
Workers Live Longer – Retire Earlier

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Average Age of Personnel
Large Middle Aged Population
0% 20% 40% 60% 80% 100%
Operators
Process &
Production
Engineers
Control
Engineers
Maintenance &
Instrument
Technicians
Shift Supervisor
Line
Management
Below 30 yrs
30 yrs - 50 yrs
Over 50 yrs
Source: ARC 2007 Survey

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Manufacturing Lacks Appeal
How Do You Get Them Interested…
…In Being Here?

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Current Education Level for Operators
* Other includes, special certificates, technical school, or task specific training
0% 10% 20% 30% 40% 50% 60%
College Degree
Prior Experience in a
Similar Position
None
Associates Degree
or Equivalent
Other
High School Diploma
*
Majority of Operators Arrive with a
High School Diploma
Source: ARC 2007 Survey

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Best Practices for Hiring Qualified
Personnel
• Provide Visible Leadership Support for
Training Programs
• Collaborate with Local Schools
• Minimum Hiring Standards
• Structured Induction Programs
• Experienced Mentoring Programs
What Practices Work
For You?
Source: ARC 2007 Survey

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How Do You Know Your Team Is Prepared?
0%
10%
20%
30%
40%
50%
60%
70%
0-2% 2-5% 5-10% Over 10%
Percent of Annual Hours Spent on Training
PercentofPopulation
Training Hours Do Not Reflect the Impending Crisis
Time Spent Training
Source: ARC 2007 Survey

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0% 20% 40% 60% 80% 100%
Less Than 40
40-80
80-160
More Than 160
On The Job Training (OJT) Computer Based Training (CBT)
Simulator Based Training Abnormal Situation/Incident
Classroom (On-site) (Supplier) Classroom (On-site) (Other)
Classroom (Off-site) (Supplier) Classroom (Off-site) (Other)
Operator Training Options versus Hours
Heavy
Reliance
on OJT
Source: ARC 2007 Survey
Supplier-
based
Classroom

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Control Engineers Training Options Versus Hours
0% 20% 40% 60% 80% 100%
Less Than 40
40-80
80-160
More Than 160
On The Job Training (OJT) Computer Based Training (CBT)
Simulator Based Training Abnormal Situation/Incident
Classroom (On-site) (Supplier) Classroom (On-site) (Other)
Classroom (Off-site) (Supplier) Classroom (Off-site) (Other)
More
Supplier-
based
Training

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Current Practices for Operator Skills
0% 20% 40% 60% 80% 100%
Incident Training
"What If" Training
Retiree Mentors
Off Shift Mentors
Certivication Process
Induction Process
Yes
No
Few Take Advantage of Retiree Resource
And Incident Training may be Inadequate
Source: ARC 2007 Survey

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Best Practice for Training
• Establish a Testing Program with Success
Criteria
• Link Certification to Job Function and/or
Reward
• Conduct Regular Gap Analyses Between
Employee and Mentor
• Encourage Employees to Obtain Industry-
recognized Qualifications
• Provide Periodic Recertification
What Practices Work
For You?
Source: ARC 2007 Survey

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New Company
The Issue of Retention
Your Company
How Do You Keep Them?
What Makes Trained Employees Leave?
Concerns about “Your Company”
Better Working Conditions
More/Less Responsibility
Location – Weather
Growth Potential
Recognition
Money
?

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Best Practices for Retention
• Clear Job Description
• Challenging Work Environment
• Employee Feedback Process
• Establish Training Standards
• A Plan for Every Person
• Emphasis on Skills Not Cost of Training
• Inclusive Project Teams
• Mentor Programs for Learning
• Clear Reward-for-Performance
What Practices Work
For You?
Source: ARC 2007 Survey

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Does Your Performance Measurement
System Reward or Punish?
People Need To Know How They Are Being Measured
And The Measures Need To Actionable
KPI
KPI

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Thank You.
For more information, contact the author at
dhill@arcweb.com. Please visit our web pages at
www.arcweb.com