Industry 4.0

What is the “Skills Gap Shortage” Companies Need to Fix for Industrial Transformation Industry 4.0?

by Eileen SullivanScully on 14th September 2018

What is the “Skills Gap Shortage” Companies Need to Fix for Industrial Transformation Industry 4.0?

Industrial productivity is driven by innovations in technology. Steam powered engines in the 1800s powered dozens of belted machine tools, each performing different tasks. Electricity led to mass production in the early 1900s. Automation and the development of Computer Numerical Control changed production even more; no longer did it take twenty years to develop the skills and precision to manufacture complex parts and the tooling to make those parts. Precision machines and computerization reduced skill levels and enabled globalization of the workforce.

Since the 1980s industry technology advancements have been incremental. Compared to the huge breakthroughs in communications, e-commerce and IT, industry has ‘pushed machinery closer together’ and ‘added sensors’ along with combining several department’s data onto one overarching computer program.

Steam power, electrification, and automation have taken us this far. Now it is time for Industry 4.0. Industry 4.0 is shorthand for the new digital industrial technology that is evolving right now. It is a concept that manufacturing can benefit from an interconnectedness of all equipment, sensors, procedures, data collection and IT systems for a total transformation of the way a plant works.

This Industrial Transformation needs computer-savvy employees at all levels of the company–skilled trades, engineering, QA, Warehouse, engineering. “People don’t have the…specific career training they need in today’s technologically advancing world. We need the skills to keep this very complex technology working. This includes medical technology, aerospace, automotive, etc.” said Ed Gordon, the author of the upcoming “Future Jobs: Solving the Employment Skills Crisis.”

“You can have all the latest technology you want,” Gordon notes, “but if you don’t have the talent behind it, your business is not sustainable.” He predicts that without more focus on STEM (Science, Technology, Engineering, Math) there could be as many as fourteen million jobs left open by the skills gap by 2020.

He’s not alone. The 2012 Tech Trends report by IBM provided the results of a survey of 1,200 professionals making technology hiring decisions for their organization. Only one in ten of those organizations felt it currently had the skills needed to implement advanced technologies such as cloud computing, mobile apps, and business analytics. More than 60% defined the skill gap as moderate to major. They also found that almost half of the educators at over 200 colleges felt their IT and computerrelated classes were not keeping up with the IT skills new employees would need to drive Industry 4.0 innovations.

Can employers do anything differently to change this outlook? Generally, employers seek candidates with experience. When they can’t find them, they often contact a technical agency to fill the position. This tells us a few things; one, that people with the needed skills are out there. Two, that there were reasons why a person who would do that work via a temp agency had not applied for the position.

Technology is changing so fast that employers inadvertently require an impossible amount of experience. In some cases any experience over two years old would be in something else, not the software or equipment that the employee is required to master. Another side of that coin is when the equipment and software is proprietary; then experience would be a wash and only propensity to learn and trainability would be key factors.

Another reason impeding the right people from applying is vestigial to the highly competitive 1980s and 1990s, when companies began to require BA and BS degrees for jobs that have no inherent need for that much education. As this happened, the job statistics reflected that HS graduates had higher unemployment rates and lower wages when they did work, but they also showed a downward trend in salaries for 4-year graduates as they took the semi-skilled jobs formerly held by HS grads with in-house training. Jobs like CNC programmer, production managers, QA and some IT positions have no inherent need for a four year degree, just some specialized certificate training. Challenge yourself to rethink the level of experience and education required of applicants and look instead for good self-management skills, work attitudes and an ability to learn.

Those writing job descriptions may object; when they get fifty applicants for a position requiring a BS and five years’ experience, at least thirty of them will have neither. Unfortunately there are many good people out there who weed themselves out because they have only three years of college and four years of experience. They never apply. They imagine that if they got an interview they’d be called on the carpet for the audacity of wasting your time. These same people can get work only at a temp agency, and when you can’t fill a position, this same ‘unqualified’ person comes to work for you and does a wonderful job. It works because the majority of Junior-Senior year classes at college do not make a person better at this job, and after two years of experience pretty much everything is covered.

Katja Wald, Director of Global Marketing at Aquent, a technical staffing temp agency observes, “Because Aquent staffs these positions with contractors, we know there are people who can fill those gaps, but many times they prefer to work as contractors. They are part of a growing group of highly skilled professionals who prefer the flexibility and variation (of work) that a contract provides. As a result, we often suggest companies adjust their expectations a bit and consider looking for candidates who have those highly specialized skills but prefer a temporary job. Additionally, we’ve seen contract-to-hire become a popular option so that both employer and employee can evaluate each other and see if it’s the right skills match.”

What else can a company do to compete for new graduates in the fields needed? Partnering with the students in that field is an excellent way to get the pick of the litter. Offer plant tours or on-site technology explorations to the teachers of students soon to graduate. Offer ‘shadow-day’ programs where soon-to-graduate students can spend one to three days seeing what the job is like. Creating summer internships or short internships in early January is an ideal way to improve the odds of a good hire. Getting the best students to apply for positions is sometimes as easy as inviting them over for a day.

Another key strategy is to train for the skills needed in-house or by sending employees to take classes. In today’s world keeping incumbent workers up to steam is important. Upgrading skills is a lifelong process; Industry 4.0 can’t be achieved with new hires who are expected to drag everyone else along. Hire for aptitude and potential, then send them along with the current employees to get the training and skills needed to implement the new technology. An older employee with a thorough knowledge of production issues and demands is better positioned to ensure the right things are monitored, communicated and integrated for quantum leaps in productivity.

Building teams that include some employees recently graduated, some mid-career and some who have been with the company a long time positions you to benefit from several outlooks as well as grow talent. As people retire others are ready to step into new roles.

To compete in a global marketplace we need a system overhaul, not just tweaks to the current system of training and developing talent. Experts believe the solution will be from the bottom up, not from the government. Companies that capitalize their training/talent development as they do equipment and facilities will have a competitive advantage.

About the author: EIS