The Cost of Investment: Training, Skill Set, and ROI
There are 170,500 CNC machine shops in the U.S. This is what your business could be up against in finding employees with the skill sets needed for exceptional productivity and quality.
Lisa Novelli, president of National Composite Center, presented the second Executive Session at Gosigerfest 2015. She’s experienced in manufacturing and operations management, and shared how businesses can increase their chances for a better return by investing more in training and technology.
She definitely packed a punch with this number, immediately demonstrating how competitive the hiring market can be. However, within those 170,500 CNC machine shops, more than 300,000 jobs are going unfilled due to lack of skill set, which can cause big hits to ROI.
The demand for proper skill set to fill these jobs is consistent across the board; as older, experienced machinists leave or retire, it’s more and more imperative these spots are filled to get the job done.
Novelli points out you need the skill set to operate a machine before you can buy a machine, and you need a machine before you can make sales. Or, if you already have a machine but its operator retires, the machine will sit dormant and you still can’t make a sale. Either way, you’re losing time and money.
So Novelli started to identify some of the gaps that are apparent in today’s emerging workforce. For example, she noted U.S. high schoolers are currently ranked 23rd in science and 31st in math.
“To be economically competitive, we need to do a better job of educating these kids,” she said.
She also discussed gaps in basic skills like reading, writing and math; in technical skills with computers and technology; management and leadership skills in team building, goal setting, planning and motivation; and emotional skills in self-awareness, discipline, determination and compassion.
To address these common issues in young people entering the workforce, Novelli emphasized investment is key. She and the audience agreed it can be costly, but she offered a solution to create more value.
“Instead of training 100 people in two weeks, train 10 people for 20 weeks,” she said. “You’re training machine workers—professionals, not just button pushers. They need to be leaders.”
However, you shouldn’t just invest in quality training. Facilities, equipment, quality certifications, R & D scale up and commercialization should also be areas of focus to bring more value to the overall experience for employees and contribute to ROI.
While there are various methods of calculating ROI and it can be used for various purposes, Novelli said it’s mostly used to measure profitability of investment and detect hidden costs such as cost of quality, inefficiencies, productivity, material handling and tooling work holding and set up times.
“Skill set will be limited in the coming generations, while technology keeps growing,” she said. She spoke to the value of trade schools, as they create skill sets worth the pay, rather than if a student were to come fresh out of high school with limited knowledge and experience.
Novelli explained how training and investment can make a big impact on ROI in a dedicated “risk and reward” discussion and pointed out several considerations: Optimal skills and better technology equals productivity and reduced costs; constantly train your team to practice and learn new skills; make sure you are tapping into their full potential; plan for more long-term retention of valuable team members; fast-paced technological advancement makes it advantageous to upgrade providing additional benefits; and investments in technology should be given serious consideration due to the potential cost savings and quality enhancements.
In other words, with training and investment, employees are more prepared, more productive and more likely to stick around for the long term, and better technology might help your business run more smoothly. The extra time and money you invest now could pay off over time.
Novelli concluded with reassurance for the audience.
“Organizations will always face some type of skills gap—if they didn’t they wouldn’t be growing and innovating to stay ahead of shifting market conditions, evolving industries and changing customer needs,” she said. “The key to achieving business growth and success is having a workforce with the capacity to continually learn, update their skills, and hone their knowledge to today’s rapidly changing environment.”