Trends within the manufacturing sector such as employee recruitment, training and retention are among the top three concerns of executives.
Employee recruitment, training and retention are among the top three concerns of metals companies, and are becoming increasingly important with changes both in the manufacturing sector as a whole and in the metals industry in particular.
It is its people and its culture that really differentiates a company and makes it successful, Philip K. Bell, president of the Steel Manufacturers Association, said, calling employees a metals companys greatest assets.
We are at a cusp of a sea change in the way that metals companies recruit, retain and manage their workforces, John Lichtenstein, managing director for natural resources at Accenture Strategy, declared. He maintained that one major driver has been the impact that new digital technologies have had upon the industry.
Changes in worker demographics have also had a big impact. For example, according to Laurie Roy, vice president of human resources and global talent management for Alcoa Corp., said that about 30 percent of her companys current global workforce is eligible to retire in the next five years. And since it is its people who make Alcoa such a reputable company, Our ability to manage talent, or, in other words, to attract the best people, build strong leaders and engage our employees, is our competitive advantage.
Alcoa is far from being alone in facing this issue. A trend which the manufacturing sector had been anticipating for the past few decades is now squarely upon us, observed Jennifer McNelly, president of the Washington-based Manufacturing Institute, with the aging of the baby boomers.
We are now at the reality of not only whether there is a changing demographic in the workforce, but there is equally a new social context between employees and employers on what work looks like and how they want to engage, she points out.
Joanne McInnerney, vice president of global talent acquisition at Atlanta-based Novelis Inc., said roughly a third of her companys employees are under the age of 35, which she sees as an indication that Novelis robust effort to get more young people interested in its business is working. We see this as a direct correlation to more educational systems adopting STEM (science, technology, engineering and mathematics) programs, better partnership programs with local community colleges and technical schools and businesses exposing even younger students to the opportunities within our industry.
Being able to attract the right talent into the metals industry is the only way that we can remain relevant, Brian Robinson, talent acquisition manager at Nucor Corp., Charlotte, N.C., maintained, noting that it used to be that engineers only had a few career paths to choose from, but now engineers are being recruited by a wide variety of companies. Also, he pointed out that it has become even more vital to attract the younger workers as soon as possible so they can learn from the many baby boomers getting ready to retire.
Even during the downturn in the pipe and tube industry, Houston-based TMK Ipsco has put effort into attracting core teams of experts, sometimes from outside of the steel industry, to build up the company in such areas as operational efficiency, Peter Smith, the companys vice president of human resources, pointed out.
However, the industry will need to adapt to changes in the needs and desires of its workers and to keep abreast of the skills they bring, Smith said. In building our workforce, people are really key and they will be remain key going forward.
But in doing so, companies must be aware that the mentality of millennials is slightly different from boomers, Robinson says. While they value a high-paying job, they are also looking for a greater work/life balanceto be able to spend more time at home with their families.
Reconciling what companies are looking for from their workers and what workers are looking from metals companies as perspective employers, is somewhat challenging. Mike Tomera, U.S. metals leader at PricewaterhouseCoopers (PwC), points out that in the past metals companies prided themselves on the ability to attract workers and keep them for almost their entire working lives through high pay and strong benefit programs.
But millennials arent looking for that, he maintained. They are looking for greater flexibility and very rapid advancement, are more likely to move more frequently from job to job. Nucors Robinson says he believes this could be overcome. If you attract the right people and put them on the right seat on the bus and challenge them to do more than they thought they could do, they tend to be very loyal to the company, Robinson said.
First, however, the industry has to get beyond the millennials perceptionspossibly misperceptions. A lot of millennials in particular dont understand that the steel industry is green, that we do a tremendous amount of recycling. They also dont understand that that our industry is high tech.
Gary Schick, vice president of people at Gerdau Long Steel North America, based in Tampa, Fla., agreed, maintaining that misconceptions that the metals industry is dirty, unsafe and archaic makes it more difficult for it to compete for talent with companies that have more brand recognition like the aerospace, biochemical and automotive industries.
But in reality, the industry has become much more automated and clean over the last 10 years and has improved exponentially. This, Lichtenstein said, would appear to make it a better fit for the next generation of workers.
In an Accenture survey of 2016 U.S. graduates, 70 percent of the respondents indicated that they wanted to work in a fun place and 92 percent said they wanted to work in a place with social responsibility. Lichtenstein says that while some metals companies have, to date, largely just paid lip service to this, there are many others that are taking both social responsibility and employee empowerment much more seriously than they had in the past, as can be seen through the incorporation of greater digital technologies and recycling. I think we will see more of that, including more green certifications, he said, noting that some companies are already talking about totally green plants.
The key, however, is making the potential worker pool aware of these changes. PwCs Tomera said that especially with all the price compression that the metals industry has been facing, it has been somewhat difficult for companies to spend money on the marketing efforts necessary to correct any such potential misconceptions.
The manufacturing sector as a whole is facing a similar issue, McNally said, observing that while companies have a big responsibility to show the community, including prospective new employees, what modern manufacturing entails, they havent been very good at marketing themselves as an industry. Recently, however, there have been increased attempts to demystify manufacturing, she said, including National Manufacturing Day, where employers, including metals companies, are opening up their doors and inviting people in to show off the high-tech environment that todays manufacturers are operating in.
Jeff Hansen, vice president of human resources and safety for Steel Dynamics Inc. (SDI), Fort Wayne, Ind., said that especially with all the growth that it has experienced in recent years, SDI has been casting a wider net to attract new employees, utilizing strategies including expanding its use of internships, outreach at campus, trade association and professional organization events and employee referrals to attract new talent.
This is also being done industrywide. Bell said that in addition to partnering with the National Association of Manufacturers and the Manufacturing Institute with National Manufacturing Day, the SMA also donates money to further the recruitment of such nontraditional workers as veterans, millennials and women and partners with other trade groups, including the Association of Iron & Steel Technology (AIST).
The metals industry realizes that it needs to be proactive in getting its message out to prospective employees. Robinson said that in the past people would come to Nucor when they had openings because they offered the highest paying jobs in their communities. But now there is a lot more competition so we have to go out into the community to bring people into our facilities, he said, including offering more plant tours and working with colleges and professional and veteran organizations in their recruitment efforts.
McInnerney says metals companies are doing more to support educational systems, including STEM programs, developing their own partnership programs with local schools and community colleges, pointing to Novelis success with FIRST Robotics, a program aimed to inspire young students to engage in robotics camps and competitions.
The investment we make in the program globally supports more than 460,000 students and results in them being twice as likely to major in science or engineering. This leads to a more competitive and diverse candidate pool for employers, she explained.
Robinson also pointed to the value of starting early. We are going into elementary schools, middle schools and high schools to encourage students to get involved with STEM. Then, when they are old enough we look to bring them into the industry as interns, providing hands-on work experience that helps them to develop the skills that they will need down the road.