This year’s State of Manufacturing® survey showed that almost half of Minnesota’s manufacturers are planning for increased revenues in 2015 and almost two-thirds expect average wages to increase during that same time frame. How bullish is DEED on the prospects for the state’s manufacturers?
Everything we see supports the survey. Manufacturing companies have been a large component of our work over the past two to three years. We traditionally have always worked with manufacturing companies but it has ramped up significantly. We’re working with them on facility needs, the purchase of equipment and, of course, on helping add new employees to their workforce. Approximately 65 percent of our work through DEED’s main programs has been targeted at manufacturing companies.
Kevin McKinnon, deputy commissioner, Minnesota Department of Employment and Economic Development
At the same time, more than a third said it was difficult to attract qualified candidates; more than a third said this problem would impede their ability to meet growth projections. What is DEED’s take on that? What role might you plan in helping them out?
Minnesota’s workforce is aging, which means the state’s demographics will look vastly different in the next decade and beyond. While the state’s economy is strong, the labor force is already beginning to tighten. With the fifth lowest unemployment rate in the country at 3.7 percent, Minnesota has about a 1:1 ratio of available workers to vacancies. The more Baby Boomers retire, the higher the ratio will be for vacancies to workers.
While this issue is not specific to Minnesota, we are trying to address these needs through training underutilized or unprepared workers for the available jobs. We’re also working with individuals who have barriers to employment to build marketable skills. This supports the supply side of the equation—to provide the skills they need to participate in the workforce. If you look at the unemployment situation in Minnesota today, the question is how to get those who are underemployed or not gainfully employed into these positions.
Did it surprise you that only a third of manufacturers collaborate with local educational institutions for training? What can be done to improve that? What is the role of the Minnesota Job Skills Partnership?
It is surprising that more companies have not reached out, but in some respects, it isn’t. Manufacturers often provide significant training on their own. I look at the training higher education institutions can provide from two different perspectives: The first being the young people who go through programs to ultimately get jobs. What skills do they have and how do those skills meet the demands of the existing positions? The second piece is that higher education institutions train more than 150,000 incumbent workers each year—including in collaboration with the Minnesota Job Skills Partnership. This program designs curriculum in partnership with businesses and higher education institutions to meet training needs. It is an important program as it increases the skills of employees, increases productivity and ultimately prepares an additional onboarding or training program that can be offered to new hires.
You’ve talked about the coming shift in the workplace as Baby Boomers retire and they are replaced by Millennials who bring different kinds of skillsets and attitudes to the workplace. What does DEED do to evolve with that?
That’s an interesting question. DEED is just a small part of the equation as the industry must adapt as well. DEED’s Workforce Development division partners with companies on long-term workforce development planning issues and is constantly partnering with companies to serve their workforce needs. A lot of our work is through incumbent training, whether through DEED programs or directly through higher education institutions.
That being said, manufacturing isn’t necessarily what most people expect from today’s operations. A lot of communities and companies take pride in finding ways to create interest and involvement in manufacturing careers. Automation has played a large role in our competitiveness, which goes back to addressing what skillsets are required today versus what was needed 20 years ago. Those are areas where you can offset some of the human demand, but it doesn't solve the entire problem.
Kevin McKinnon, deputy commissioner, Minnesota Department of Employment and Economic Development (DEED), oversees Business and Community Development programs, as well as the Minnesota Trade Office and the Office of Broadband Development.