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Frustrated by lack of qualified candidates, business starts grow-your-own internship

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Jim Leute
August 26, 2012

— New business is expected to propel United Alloy to more years of record-setting revenues.

But Terri Roessler, chief executive officer of the manufacturer of diesel fuel tanks, generator frames and other heavy metal fabrications, is frustrated with her company’s inability to hire qualified welders to fuel the anticipated growth.

“Fifty percent of my time in the last seven months has been spent on this,” Roessler said.

She lays some of the blame on the state education system, which she said does not put enough emphasis on technical education.

Some economists counter, however, that companies such as United Alloy might need to pay more to lure the workers they need.

United Alloy is trying to grow its own welders.

Earlier this year, the company set up an internship program for high school and technical school students interested in welding.

Initially, no one applied.

Eventually, four people signed up, but none of them—two from Blackhawk Technical College and two from Janesville high schools—could pass the basic math and blueprint reading tests.

One of United Alloy’s tests involves measuring a piece of steel and using a caliper to determine the size of a hole.

“Today’s manufacturing requires a large set of technical skills, but we can’t get people to pass the basic skills test,” Roessler said. “It’s so basic, it’s almost laughable.

“It’s really disheartening.”

Roessler is encouraged that United Alloy’s internship program now has four qualified candidates who will start this week.

The interns will work 16 hours a week at $11 per hour. At the end of the 90-day program, interns who want to stay will get a pay hike to $13 per hour. Roessler said that upon graduation, they would be virtually guaranteed a job at United at a higher pay rate.

Roessler and United Alloy are desperate. The company needs 10 welders now and estimates it will need 10 more by the end of the year.

“I have the capacity and machines, I just need the people,” she said.

The company has a standing offer to pay any of its 120 employees $3,000 for the referral of a welder who joins the company.

‘Most basic of tests’

BlueScope Buildings North America needs welders at its Evansville facility, too.

With several global brands and 25 manufacturing plants around the world, BlueScope is the largest manufacturer of engineered buildings in the world.

In Evansville, the company is considering a third shift, said Joe La Mothe, human resources manager at the plant that employs about 250 people.

“We’ve had the same sort of hiring problems,” La Mothe said. “Many people just can’t pass our most basic of tests.”

United Alloy and BlueScope require their welders to meet strict industry certifications that keep the companies competitive in the tank and building markets. Both have hired Blackhawk graduates.

“They’re great people that we’d like to clone,” La Mothe said. “My only gripe with BTC is, ‘Give me more.’

“The problem is with people coming from other companies and sources who just can’t pass the tests. Many of them don’t know beans about welding. What may be good enough where they are is not good enough for us.”

Improving business, a possible third shift and an aging workforce combine to elevate BlueScope’s need for welders, La Mothe said.

“It’s hard enough to get welders but even harder to get them for the third shift,” he said.

Help from the state?

In late June, Roessler expressed her frustration to Gov. Scott Walker.

“With all due respect, I believe that the current system has some significant gaps,” she wrote in a letter.

Part of the problem, Roessler believes, is that the state’s Department of Workforce Development and Department of Public Instruction are not doing enough to help industries that say jobs are going unfilled because qualified candidates can’t be found.

Roessler believes the state’s K-12 education system is too focused on preparing kids for four-year college degrees and is paying insufficient attention to technical education and the careers it supports.

“DPI and DWD aren’t talking to each other, and nobody is doing much more than pointing the finger at someone else,” she said. “Some people act as if this just came up.

“I’ve been here nine years and nothing has changed.”

She’s also unhappy with Wisconsin Manufacturers & Commerce, the state’s largest business association. The group recently held 50 listening sessions with more than 300 manufacturers around the state to discuss the skills gap.

“WMC has just identified this as a problem,” said Roessler, who attended the local program in June. “Their solution is that manufacturers must take the entire responsibility to train their own pool.”

Roessler said she’s gone above and beyond in her efforts to recruit and train qualified employees. She’s a frequent visitor to Blackhawk’s welding classes.

“We pay an awful lot in taxes, and I think there are some basic responsibilities the state is not meeting,” she said. “My solution would be to get rid of DWD, give that money to employers for training and then force DPI to be accountable for what they’re turning out.”

Jonathan Barry, the DWD’s deputy secretary, wouldn’t go that far, but he acknowledged his agency is more focused on dislocated workers, benefits and retraining programs than addressing future workforce issues.

During a visit to Janesville last week, Barry said young children and their parents must get the message that technical schools are a pathway to successful careers, not an ugly step-sister to four-year colleges and universities.

In the next 10 years, he said, Wisconsin employers will need to fill more than 900,000 jobs, primarily because of attrition and new growth.

“Sixty percent to 70 percent of those jobs will require some education beyond high school, while only 30 percent will require a baccalaureate degree,” he said. “We all bought into the paradigm that everyone needs a four-year degree. We need to rethink how we educate, particularly when it comes to career choices.”

Growing program

For its part, Blackhawk is pumping out welding graduates as fast as it can, said Sharon Kennedy, the school’s vice president of learning.

The technical college turns out 40 welders a year and recently announced plans to increase that by 50 percent with the upcoming academic year.

Historically, classes have been full, and there’s been a waiting list.

The programming increase is in direct response to both student and industry demand, she said.

“Students are starting to recognize that there are a lot of good jobs out there,” she said.

Kennedy understands employers would like welding graduates sooner rather than later. Teaching students to exacting industry standards, however, requires a yearlong program, she said.

She also understands frustrations over basic skill levels, which she said are functions of older students returning to school and lacking previous training.

“Many don’t know how to read a tape measure because they never had to before,” she said. “The average age of our students is 31, so some of them have been out of school a long time and needed refreshers and remediation in some basic areas.”

Kennedy has been at Blackhawk for five years. For each of her first three, she had welding teachers tell her they spent the first half of the first semester teaching shop math.

“They shouldn’t be teaching shop math,” she said. “They need to be teaching welding techniques. When it’s necessary, we embed a math teacher in the class to handle that.”

Change in pay

United Alloy is reaching the point where it can’t wait any longer for fundamental system changes or for graduates of one- or two-year programs.

“We need these people now,” Roessler said. “At our last job fair, we got 200 applications. Ten were screenable, one was viable and none were hireable.”

If it’s unable to recruit new talent, the company likely will consider changes to its wage and benefit package, which Roessler believes is already near the top of the local market.

When Stoughton Trailers announced last year that it was expanding its operations in southern Wisconsin, United Alloy immediately bumped the salaries of its welders in an effort to retain them.

United Alloy is advertising starting pay of between $14.50 and $18 per hour for second- and third-shift welders.

BlueScope, which is closer to the Madison market, starts welders on its second shift at nearly $17 per hour.

According to the U.S. Bureau of Labor Statistics, the median hourly wage of welders in the Janesville area is $17.83, about 40 cents an hour less than the national median.

Some economists have argued that employers are not struggling because of a skills gap. Instead, they say, the employers are not filling positions because of pay gaps.

That argument is built on the basic economic principle that high demand should result in higher prices, or in this case, higher wages.

But Roessler and other employers counter that higher skill sets need to be in place in order to command higher wages.

Still, higher wages at United Alloy are a possibility, she said.

“Last year was a record in terms of revenues and profits, and this year will be, too,” Roessler said. “We’re in a great position, and we have some latitude for incentives because of our financial situation.

“If we can’t get anyone from the temp agencies, and we can’t get anyone from BTC, we will have to look at pay and benefits and try to lure from other welders.”

Changing times in employment need change in message in the schools

More students would stay in high school and local manufacturers would have a better pool of prospective employees if area school districts introduced students to the values of technical education at a younger age, a Blackhawk Technical College vice president said.

“We need to do a much better job in the middle schools. I happen to think we’d have lower dropout rates if there was more of a technical/career emphasis at that age,” said Sharon Kennedy, vice president of learning at Blackhawk Technical College.

“We’ve got to change the message that technical school is less rigorous, that it’s the place for people who are not as cognitively successful as others,” she said.

Jim Morgan, president of the WMC Foundation, agrees that educators, parents and the media still cling to the misguided notion that manufacturing is dirty, dark and dangerous.

WMC Foundation recently conducted statewide listening sessions on the so-called skills gap.

“What seems to be missing in the current system is a broad understanding by today’s students of the jobs available,” Morgan wrote in a recent WMC column. “They simply cannot select an occupation that they don’t know exists.”

Today’s students, he said, don’t know what a welder or CNC operator does. They’ve never seen the inside of a modern-day, advanced manufacturing facility, and they don’t have accurate job data and salary information, he said.

Morgan said he understands the frustrations of Wisconsin manufacturers who say they can’t get the qualified employees they need to climb out of the economic downturn.

Employers, however, must shoulder part of the burden for talking up a changing manufacturing sector that offers plenty of family-supporting jobs, Morgan said.

‘A full understanding’

Morgan said 30 percent of the future jobs in Wisconsin would require a bachelor’s degree, which means 70 percent will not. Of the latter, the vast majority will require technical education beyond high school.

“If every 16-year-old and their parents have all of this information and a full understanding and open mind to all occupations available, we will work through this shortage,” he said.

Morgan said that requires a different definition of success, perhaps one in which children are healthy and happy, doing something they love and living comfortably.

The age-old definition, at least in terms of education, is that a master’s degree is better than a bachelor’s degree, which is better than a technical degree, which is better than work experience, he said.

“The workplace is not that linear and easily defined,” Morgan said. “Right now, there are shortages of engineers, welders, CNC operators, machinists and masons. Some of those require work experience, some apprenticeships, some technical degrees, some four-year degrees or more.

“Let’s make sure everyone knows the market, because the market will drive us to success.”

‘More interaction’

A recent survey of 2,500 Rock County high school students shows only a handful had an interest in a career in manufacturing.

Rock County 5.0, in collaboration with a subcommittee of the Leadership Development Academy and the Stateline Career and Technical Education Academy, conducted the survey to learn how students form career aspirations, what those aspirations are and whether the students plan to go on to school, enter the military or join the workforce.

More than 2,500 students responded to the survey, which found:

- Sixty percent plan to go to a four-year college or university, while 19 percent plan to pursue a technical or associate degree.

- Of those thinking about technical careers, just 2.1 percent indicated an interest in manufacturing.

- The majority of kids start thinking about careers in middle school.

- Most want more information on careers.

- Seventy percent said they had no exposure to a class, program, internship or co-op program that would prepare them for their chosen career field.

James Otterstein, Rock County’s economic development director, said the survey results will not gather dust. Instead, they will be used to marry the common interests of education and industry.

“The idea is to match career information to what’s actually happening in the marketplace,” he said. “I think one thing that comes through loud and clear is that there’s a definite need for career counselors that match skill sets with interests and the market.”

“We need more interaction between the business community and education, and we’re not talking about one-day job fairs.”

Later this week, local manufacturer United Alloy will launch an internship for local welding students.



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