Retirees will cost; knowledge worker will prevail

InTech, Jul 2005 by Policastro, Ellen Fussell

An Advanced Technology Services, Inc. (ATS) poll of manufacturing executives revealed the shortfall of skilled labor in the U.S. will cost manufacturers an average of $50 million from their bottom lines. The survey polled 94 senior manufacturing executives (CEOs, CIOs, vice presidents, and plant managers), asking what they thought the projected retirement of 40% of their skilled labor force in the next five years would cost their companies. Nearly two-thirds said the crisis would cost them $50 million on average. Another 46% of respondents with more than $1 billion in revenue predicted their costs to be much more, more than $100 million in the next five years.

The survey found among discrete manufacturers, automotive manufacturers will feel the impact the most, followed by ball and roller bearing makers, metal valve manufacturers, and engine and transmission manufacturers.

Dave Beckmann of Emerson Process Management and a keynote speaker at May's World Batch Forum (WBF) in Atlantic City, N.J., likened the aging workforce crisis in the batch and other process industries to a tsunami. "What's happened in the industry over the last 25 years is we've tried to save our way to success," Beckmann said. Companies have run lean crews and suffered from constrained resources. Now they don't have technically qualified people to do the required engineering. And since then, "there's been a fall off in engineering," Beckmann said. Why, even computer science and engineering graduates have decreased 60% since 2000, "and mechanical engineering is even worse," he said.

But the crisis isn't hopeless Beckmann said. The key is to train the worker of the future now to fill the shoes of the fast approaching retiring age of today's engineering workforce. The old paradigm was "the corporation was master, and the employee was servant," he said. But the new paradigm is, "the means of production is knowledge owned by knowledge workers, and it's highly portable," Beckmann said. A large number of employees will be contract professionals, instantly available information will provide for global outsourcing, marketing will become more personal because of over-saturation of mass media, and new innovations will come out of totally different businesses, not dedicated research labs.