A Cry for Help: Labor supply shock shows no signs of abating

I recently had lunch with the CEO of a manufacturing company that has operations around the globe. It was great to meet him in person – we had been introduced in early 2020 but had only spoken over the phone and on Zoom.

We discussed his company, international manufacturing conditions, and the wild economic swings of the pandemic. Amidst a very dynamic business environment, he put into context for me the profound supply/demand shift that has occurred over the past two years.

Generating demand had always been his key challenge – find new customers, develop effective marketing, promote, sell – all in an effort to increase demand for their products.

Now his company and many other firms are facing a completely different landscape and one that is foreign to many business leaders: There is huge demand. The key challenge is finding and securing enough supply: supply of materials, shipping capacity, and especially supply of enough labor to address the demand for products and services.

We are undergoing a massive supply shock in the labor market that shows no signs of abating. This is an issue across the globe and the primary concern for our local businesses. To put the issue in context for the Grand Traverse area, we recently conducted a Skill Gap Study with several partner organizations, including Northwestern Michigan College, Northwestern Education Services Career Tech Center and Networks Northwest. Our goal was to gather data and highlight potential solutions for labor needs.

We received input from over 120 CEOs, HR managers, and business owners representing a dozen industries and companies of all sizes. The results showed labor supply issues in every sector, but the most significant concerns are in finding and developing talent in the skilled trades and manufacturing. These workforce gaps are especially acute for entry-level positions that require some degree of vocational and technical training or an associate’s degree.

Results indicate the labor situation is nearing crisis-level for many companies. Local employers and organizations must take a proactive approach toward addressing the lack of skilled talent in our region and develop solutions for the shortage of workers with in-demand skills. We cannot wait for state and federal fixes.

There are several near-term actions we can take locally to address the issue, with many centered on upskilling the current workforce we have. Our companies, especially manufacturing and skilled trades, have an opportunity to utilize micro-credential programs that are brief and focused on specific technical needs.

Northwestern Michigan College has existing programs that have proven helpful to employers for electrical, industrial controls, machining operations and several other skill areas. NMC provides flexibility to tailor these programs for the job role and can develop new customized training for specific business needs. These programs are also stackable and can be a step toward earning a certificate or associate’s degree.

There are positive developments at the high school level as well. Skilled trades classes are currently full at the Northwest Ed Career Tech Center. Many programs are being upgraded so that graduating students finish with not only a diploma, but also with an industry-specific certificate in hand. Further regional education collaborations could explore the reintroduction of shop class at the middle school level, expansion of career tech offerings in the summer months, and updates to guidance counseling to better inform students and parents about manufacturing and skilled trades careers.

Longer-term steps can include development and expansion of job-related training courses, such as heavy equipment operation, forklift training, excavating training, rigging and signaling for construction, and basic carpentry. Finally, a local group of manufacturing and education leaders is in the process of developing new resources with Michigan Tech University to address the need for specialized training and advanced degrees in engineering and applied sciences.

Education providers, local governments, training organizations, and employers have an opportunity to work in collaboration to create new pathways and unique locally tailored programs to ensure our region has a sustainable workforce and the ability to grow our economy.

We have the capacity to address these issues – it’s time for creative solutions to make the Grand Traverse area a model for the future.

Warren Call is the president/CEO of Traverse Connect, a regional economic development organization that includes the Traverse City Area Chamber of Commerce and Venture North. Contact him at warren.call@traverseconnect.org.