Your Business at Risk: The Aging Workforce

Manufacturing industries relying on a skilled but aging workforce know they have a problem. Their dependence, however, on educational systems, support organizations, third-party service providers, recruiters and, in some cases, even sheer luck is ill-advised and won’t keep them out of long-term trouble. The looming workforce crisis may materialize at any moment as a sudden step-change. The time to act is now.

No News Is Bad News

We said we had a five-year problem four years ago. Now what?

An aging industrial workforce facing inevitable attrition with no influx of new workers to fill the gap is certainly not news. We said we had a “five-year problem” four years ago but we have yet to effectively combat this problem, which is already baring its teeth. The bad news is that the potential for a catastrophic step-change in workforce availability is higher than ever before.

Depending on the economy and other factors out of our control, a sudden drop in available skilled industrial workers is entirely possible. As time ticks by, we move closer to decision points or changes in conditions that may influence workers to retire early en masse rather than gradually through natural attrition.

What issues push us closer to this precipice, and how can we lessen vulnerability to a potential major downshift in workforce availability?

Do the Math

The risk of a workforce crisis is a function of time compounded by economic and social factors.

The workforce – and everything else in the universe – is aging. As baby boomers opt out of the workforce, manufacturers are already feeling the loss as those positions remain unfilled. As a result, we see many retired employees lured back to work as consultants or contractors to temporarily fill the gap. Multiply this problem by potential future economic and social factors and the result could be catastrophic.

If people fear a significant economic shift or downturn that could potentially impact their future, they may take the “safe bet” and retire early, drawing on monetary assets they believe may be worth more now than in the future. Rather than risk losing their nest egg or retirement pay-outs, they may be driven to take the money and run, potentially causing a mass workforce exodus.

For example, if the value or pay-out of lump sum pension plans goes down due to economic factors, a larger portion of the workforce could opt for early retirement. Interest rates and the payment value in lump sum pension plans are inversely proportional, so when interest rates go up, the value of the payment goes down. In this case, workers may opt to get out before the lump sum pension or payments fall so low they can’t recover the loss even if they keep working.

By the same token, if the stock market takes a large loss or threatens a future recession, workers with investments at risk could decide to cash out early. Any economic shift or change can significantly influence a worker’s decision to leave a company’s employ, and manufacturing is ill-prepared to handle a sudden large-scale loss of workforce resources.

Another facet of the workforce crisis comes in the form of generational and social shifts. Our culture is trending away from the 9-to-5 task-oriented worker to a more high-tech employee who wants an intuitive workplace and a participative environment. This change in job style preference broadly impacts the number of young people willing to enter the automation or engineering profession.

Combating the workforce shortage is a multi-faceted process requiring a thoughtful, multi-step approach. Knowledge transfer is the first step in mitigating risk.

Knowledge Transfer Is Key

Workforce development is knowledge transfer.

Capturing and sharing the specialized knowledge that the current workforce uses every day to keep operations running is key.

Over time, experienced operators have developed their own set of processes, decision-making strategies and maintenance routines that help them keep operations up and running. The old saying “when it makes that funny noise, just kick it on the lower left panel” may be amusing, but the reality is that legacy workers have learned by trial and error how to solve day-to-day operational problems. Critical tribal knowledge walks out the door every day and at some point, it just isn’t coming back as experienced workers retire or, even worse, join a competitor.

The reality is that control systems are not fully automated. There are still actions that must be taken by operators to make the operation run smoothly. Even if the manufacturing process is highly automated, specialized operator knowledge fills in the gaps and keeps the process running. This proprietary information is not broadly known and is critical for manufacturers to capture, own and share with incoming workers.

Facilities may mistakenly assume when planning an upgrade or undergoing modernization that this tribal knowledge is no longer as important as it was when using legacy equipment. However, next-generation engineers will need to make operational decisions based on experience backed by data analytics. The factory of the future will rely on the “knowledge worker.”

Enter the Knowledge Worker

Analytics and strategy will define the knowledge worker.

The new automation professional will be more of a “knowledge worker,” no longer performing rote tasks but focusing on high-level, information-driven decision-making and strategy.

Whether working with legacy equipment or in a modern digital factory, knowledge workers will be key to future productivity and growth. They will be highly skilled in handling both tribal and process data to knowingly and methodically improve the manufacturing process. As they move out of the day-to-day operational routine, they will make situational decisions based upon data provided to them in real-time. This more flexible, more informed and enabled automation worker brings many benefits, not the least of which is the ability to improve workplace safety.

In addition, a knowledge worker freed from mundane tasks will have the mindset (and the time) to think strategically and become more of a visionary. The factory of the future will need people who can connect the dots and extrapolate from the available data to make quality decisions and operational improvements as conditions inevitably change over time.

Modern day advanced analytics will pave the way for more intelligent, enterprise-wide decision-making based on improved operational data. The knowledge worker will become the new norm, making key decisions based on more accurate information sourced from knowledge transfer and directly from the manufacturing process.

Adapting Operations Lowers Risk

Modernization mitigates the risk posed by an aging workforce.

To attract and retain new automation workers and ensure sustainability, manufacturers must modernize operations and invest in the right tools. A thoughtful well-executed technology modernization plan will enable companies to fluidly move into a future that relies more on the knowledge worker and less on the undocumented tribal knowledge of a few key people.

Modern state-of-the-art systems that provide a safer, more intuitive environment will help attract younger engineers to the workforce. Although legacy workers have grown up in the industrial environment we see today, modern workers are conditioned to mobile devices and digital applications – and they expect to work in that same smart and intuitive environment with fast access to the right contextualized data, in the right place and at the right time. Providing this ease of use will encourage longevity and creativity, allowing them to use their talents to drive manufacturing business objectives.

Next generation workers also look for a career path and a connection to the larger enterprise. A strong culture where employees feel valued, empowered and enabled is important to encourage their dedication to their personal goals as well as to the company. The more flexibility can be offered through cross-training programs and career development opportunities, the higher the chance that employees will stay with the company even if they decide to change job functions.

Finding the Future

Where is the knowledge worker?

The biggest issue facing industrial manufacturing facilities is the lack of new hires. Highly qualified automation professionals are difficult to recruit and retain. An aggressive, innovative recruiting plan should utilize multiple sources and programs to find enough candidates to fill staffing needs.

Active recruiting must cast the net widely to search for talent in various areas. Programs for recruiting should include tactics such as bringing back retirees, hiring ex-military, taking on newly graduated engineers and adding graduates of 2-year tech schools. Consider recruiting from related high-tech industries such as computer science or research and development. Although there’s no silver bullet, recruiting from multiple sources can help meet the ever-increasing demand. Once you find candidates, you’ll need to help them grow with cutting-edge training and mentoring programs.

Without enough senior people available to fill the workforce gap, it’s important to set up programs to grow the right skillsets in-house. Of course, people don’t grow on trees, but consider using senior automation professionals to mentor and train your new hires. Let them learn first-hand the foundational principals they’ll need as they experience operational situations with an experienced senior person there to help and advise. Mentoring by multiple stake-holders helps the new workers find their niche while giving them better overall knowledge of operations. Consider utilizing third-party automation service providers that can augment your staff and provide senior engineers to mentor new hires.

In addition to mentoring and on-the-job training, high-tech virtual training systems can walk employees through abnormal situation management and other operational challenges in real-time simulated environments. Workers can receive specialized training and testing before they ever go onsite. Safety and quality are enhanced through virtual training scenarios that provide the look and feel of the job without the risk.

Automation is a highly specialized and technical field, and there’s no one educational path that covers it all. It becomes our collective responsibility to give new hires every opportunity to learn what they need to help their company – and themselves – succeed.

Summary

With each passing day, the risk of an economic catalyst for a step-change reduction in available workforce becomes greater and greater. We must attack this problem now with a practical and realistic plan to maintain operations and ensure sustainability. Here’s what we can do right now:

1. Capture, institutionalize and transfer tribal knowledge

2. Modernize our enterprise systems for the incoming “knowledge worker”

3. Use an aggressive multi-sourced recruiting plan

4. Offer intensive training and mentoring programs

5. Consider third-party staff augmentation and trainers to bridge the gap

As we modernize our factories, we must find, train and welcome the new generation of “knowledge workers” and provide them with a work environment designed for their success. Because their success is the key to the success of the larger enterprise.

Paul J. Galeski

Paul J. Galeski

​Paul J. Galeski, PE, CAP is the Founder of MAVERICK Technologies, LLC, a Rockwell Automation company and a leading platform-independent automation solutions provider offering industrial automation, strategic manufacturing solutions and enterprise integration services for the process industries. Galeski currently serves as Vice President and General Manager in Rockwell Automation’s Control Products and Solutions Business.

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