Much like the U.S. Marines, technical industries and companies worldwide are seeking a few good people—no, make that a lot of good people.
To help end users and suppliers deal with increasingly scarce engineers and technical professionals worldwide, a five-member panel explored related problems and possible solutions on the second day of 2008 ABB Automation World 2008 this week in Houston. The session was entitled, “Crafting Business Strategy to Address the Problem of Demand Exceeding Supply for Human Capital.”
“Now there’s a lot of capital being invested, but there’s still a lack of people.” Dow’s Margaret Walker and other panelists discussed ways to address the global scarcity of engineering and technical talent.
Leading off the discussion, John Thuestad, president of Alcoa’s primary products division, reported that his biggest challenge is renewing his workforce at all levels. “Sure, we mine bauxite, and it’s a smoky, dusty process,” said Thuestad. “However, we also make several thousand products, and so we’re trying to sell Alcoa as an interesting place to work to tomorrow’s workforce, and we face this same challenge worldwide.”
Other members of the panel included: Margaret Walker, Dow’s vice president of energy solutions, technology centers and manufacturing/engineering work processes; Jocelyn Scott, DuPont’s engineering vice president; Gary Steel, ABB’s human resources director; and Veli-Matti Reinikkala, president of ABB Process Automation.
Steel reported that ABB plans to hire 45,000 employees over the next several years and that its process includes encouraging human development, technological competence and leadership. “For example, most companies have a lot more potential leadership than they actually use,” explained Steel. “This situation is all about people, and that makes it one of the hardest issues of all.”
Scott explained that DuPont and other companies already spend a lot of time recruiting young engineers on college campuses, but that addressing this worsening shortage will require collaboration between industry, government and education starting at the kindergarten to grade 12 (K-12) level. “Fighting at the end of the pipeline is useless,” said Scott. “We have to start much earlier to help create people with the interest and skills to go into these technical fields.”
Reinikkala added that, “This is the problem that keeps me awake at 2:30 a.m., and I don’t like it. We’re now losing some of our most senior people. In Europe, many people born after World War II are retiring, and those older than 65 are already gone.”
Walker expressed some of the frustration that many companies and their leaders experience as they address persistent, long-term workforce scarcity issues. “We’ve been talking about this for 20 years, and we never quite get to a solution. Now there’s a lot of capital being invested, but there’s still a lack of people. I think we need to get back to basics and get the mature audience, the young people and everyone in between excited in these fields again.”
Despite the historical difficulties, Walker added that attracting and retaining new engineers and technicians is still a manageable problem. “We’re still able to find and hire people, but the cycle time this requires is longer, so we have to plan much further ahead and do a lot more due diligence.”
Reinikkala reported that even though Germany’s engineering graduates declined from 50,000 per year in the 1980s and early 1990s to about 35,000 in recent years, this figure has once again climbed to above 40,000 in the past couple of years. “This is one piece of good news because we need people now, so we often have to go outside and recruit from India, but this means we get 20- to 26-year-old students without much experience,” he said.
Likewise, Steel added, while labor costs are far less in Asia, it can also take longer to create products there because many employees lack the experience and know-how that allows their European counterparts use to turn out products more quickly. “This isn’t a problem that can be solved in one shot with a silver bullet. It’s an ongoing problem that each organization must tackle from where they are,” said Steel. “Some aspects of our businesses aren’t sexy, and so it may help to focus on the end results of what we produce.”
Scott added that another constraint on attracting and retaining enough engineers is that many companies and managers don’t use all of their employees’ available skills, and instead use them only in narrowly focused areas and in old processes. “A lot of the workforce is now 50 to 60 years old, and they could leave at any time. So we need to predict when this is most likely to happen and build up more early-career talent before it does. Though 50-60-year-olds also do mentoring, they’ve also been tasked more with increasing efficiency and productivity in the past, and so a lot of knowledge about how to mentor has been lost. Eventually, this mortgage is going to come due, and we will have more serious situation.”
Attract, Retain, Grow
To enhance its own workforce, Thuestad reported that Alcoa has reduced traditional management layers, trained all affected employees in new skills, regularly sells its company to its extended communities, and operates 30 to 40 apprenticeship programs. “We pay college students to come in and learn about Alcoa, and it also gives us a chance to evaluate them,” said Thuestad.
Steel added that ABB has spend that past five years developing an inclusive leadership model and has used it to train 25,000 of its employees, suppliers and customers worldwide. “In the medium term, we’ve hired a global head of recruitment to show the value of working for ABB, but we still need to get more into the hearts and minds of young people in the long term.”
Steel explained that, “It may help to think that the life cycle of each graduate is about $3 million over the course of their career, and, if we hire 1,000 graduates per year, that works out to about $3 billion per year. If we were talking about an equipment investment of this size, many managers would pay a lot more attention to this a lot sooner.”
To get involved before the university level, Scott added that DuPont participates in many programs for high school, junior high school and elementary school students. “We get involved in junior high explorer posts, FIRST Robotics for high schoolers, and Girl Scouts’ Explore Tomorrow programs,” said Scott. “We also support programs for women and people of color because attracting these groups could really make a big dent in the number of people we’re going to need in the future. We’re also helping to train grade school and junior high school teachers, who have a very hard job and often are ill-prepared to teach chemistry, physics and biology.” Scott added that DuPont is even exploring ways to train potential employees in some correctional systems.
Walker reports that Dow has used its recent “Human Element” advertising campaign to increase community and campus awareness, and that it’s already produced some internal and external gains. Dow uses a three-bucket “Attract, Retain, Grow” method to build its workforce. “We also have a model that reflects what we think is going to happen to applicable populations, and this helps informs us about what we need to do,” says Walker. “We’re not there yet, but we also need to be more consistent because, in the past, we had spaces of time where we didn’t hire anybody.”
Walker added that Dow also uses career maps to help it and its employees define and understand what people’s true needs are, and then helps give them the tools they need to reach those goals. “In the past, we’ve often been too conservative and concerned with filling traditional roles, and so we defined too narrowly the opportunities that we had for people. This means a lot of talent doesn’t get used. So what we’re trying to do now is have people at each level of experience coach those at the level just below them. We’re also looking at redefining our work processes and roles to make them more inclusive and take more advantage of new technologies, so they’ll be more challenging and exciting.”
Steel added that engineers tend to think of workforce development as just another engineering problem, but it isn’t that simple. “If you want to develop human skills, you don’t give people a math problem to solve,” said Steel. “What’s needed is direct conversation between individuals about their skills, where they want to go and what they need to get there. There’s just no easy solution here.”