With thousands of jobs going unfilled and many more expected to become available due to impending retirements, the urgent need to build a more robust workforce pipeline in advanced manufacturing is critical for America’s competitiveness.

In fact, according to data from a the National Fund for Workforce Solutions report, the number of needed skilled factory workers could climb to three million by 2015.

This is why organization officials are stressing the importance of well-designed, on-the-job training (OJT), which they say can be an effective strategy in closing this growing skills gap.

And they have hardcore evidence, stemming from a recent study, to support their viewpoint.

“The great thing about OJT is that it allows the company to get a chance to invest some time and energy in a person and see how they perform,” Fred Dedrick, the executive director of the Boston-based National Fund for Workforce Solutions, tells Leo Rommel of Industry Today.

“The advantage to the job seeker is that they get a chance to actually get on-the-job training, to actually experience the training while they’re in a networking environment. Both parties walk away with something valuable,” Dedrick says.

The aforementioned study summarizes the findings of a pilot program funded by the Boeing Company and managed by the National Fund. Running from 2012 to 2013.

“Boeing gave us a $400,000 grant to implement this program,” Dedrick says, adding that the grant was awarded in 2012.

The report, titled “Making On-the-Job Training Work: Lessons from the Boeing Manufacturing On-the-Job Training Project,” was authored by Deborah Kobes, senior project manager with Jobs for the Future’s Building Economic Opportunity Group.

“Despite high unemployment around the country, manufacturing has strong and growing demand for workers. The rate of job openings in the manufacturing industry is five times that of the private sector as a whole,” the report states, citing data pulled from the U.S. Bureau of Labor Statistics from 2009 to 2011.

“The aging of the workforce, which is leading to a pending wave of retirements, is a key factor,” the report continues. “But rapid technological change across the industry has created a skills gap in all age groups. Some employees need additional training just to keep their jobs. Prospective hires require specialized training just to get in the door for an interview.”

There are many solutions to this dilemma, experts say. Some methods have already been put into action, others have not. One proven method that has been implemented – and should be mirrored by other manufacturers and organizations, according to Dedrick – is on-the-job training.

Dedrick says the Boeing Manufacturing On-the-Job Training Project placed 101 unemployed adults into on-the-job training at 39 advanced manufacturing firms in eight regions countrywide.

With partial wage subsidies given to participating employers during training periods of 10 to 15 weeks, employers had retained 91 workers for permanent positions at the completion of training.

The average income during training was $14.37 per hour. That jumped to an average of $14.86 per hour within a few months after training, the report said.

Dedrick adds that 100 percent of training costs were covered by participating companies and that 50 percent of wage subsidies during training were provided by regional industry partnerships.

But the costs were well worth it, according to surveyed participants.

About 96 percent of employers reported that the OJT workers met or exceeded their expectations and 92 percent of employees said they were “good” or better at their job following training.

Even better, approximately 40 percent of these employees considered themselves “great” and 40 percent “very good” at their work.

“With the manufacturing industry facing serious workforce challenges in the coming years, more firms need to consider integrating new approaches to developing their talent supply chains,” Dedrick says. “OJT is one model that can be incorporated into a broader strategy to improving and strengthening employer partnerships and, when well-designed, connect workers and unemployed adults to career opportunities.”

So, how this program come to be? How was the National Fund for Workforce Solutions brought in? And what piqued Boeing’s interested?

This is how it unfolded, according to Dedrick: “Basically what Boeing did was they came to us and they said, ‘We know you work with lots of companies in manufacturing, and a lot of those companies are potential suppliers to Boeing. We want to make sure that our suppliers have the best skilled workers as possible.’”

The National Fund for Workforce Solutions responded by crafting the idea of “what about if you funded some of our manufacturing partnerships to invest in a program that would allow workers to be hired” under an OJT program, Dedrick says.

Boeing officials signed off on the idea.

“Some manufacturing companies were Boeing suppliers, but some were not,” Dedrick says. “So, they said, ‘What we would really like you to do is make sure that the program can increase the skills of these workers and help the company fill the skills gap that they have in terms of finding skilled machine operators and other much-needed manufacturing jobs.”

The National Fund for Workforce Solutions, in turn, put out a competition to its manufacturing partnerships.

“The way we operate is that we fund organizations in 30 areas of the country,” Dedrick says. “They, in turn, organize small- to medium-sized manufacturers into a partnership where the partnership defines what it is that they need in terms of skills. Instead of doing just one company at a time, you’re looking at it as a group of companies in the Cincinnati area, Philadelphia area, Mobile, Alabama, and so on.”
Each partnership is offered resources to train their workers or help them find workers that are skilled to the specific skill set that they need.

“We got our best eight proposals and we said to them, ‘Here’s the deal, every worker that is going to be part of this has to have an individualized training plan that the company puts together with the worker,’” Dedrick says, adding that each individualized training plan was tailored to the needs of that particular company.

In the end, only 10 of the 101 trained workers were not hired. “A 90% success rate is pretty good,” Dedrick says.

“But companies, obviously, were happy because they got workers that they had trained, and that were now familiar with their particular environment,” he adds. “The workers were happy because they had some skills, they got additional skills, and now they have a full time job.”

Post-study surveys showed high satisfaction levels among program participants and employers, according the report. In all eight regions, the participating workforce partnerships and regional funding collaboratives expressed interest in expanding their OJT programs and were inclined to incorporate them into their hiring processes.

For example, Preparation for Advanced Career Employment System (PACES), a National Fund regional collaborative in Wichita, Kan., had not offered on-the-job training before this project. Since the study, PACES has expanded OJT programs in the region and placed 32 workers with five employers, including four new employers.

In essence, OJT is a win-win for all. But, at the end of the day, what were some of the takeaway lessons employers and employees can take away from this innovative training program?

According to the report, on-the-job training is well suited to customize training to an employer’s specific needs, while creating career advancement opportunities for entry-level workers.

That’s as long as programs include clear employer incentives for them to consider hiring low-skilled candidates and newly trained workers.

If the above is implemented, creating similar on-the-job training initiatives help workforce development programs strengthen existing partnerships with employers and build new ones.

Another must-have element, Dedrick adds, is inserting “a good intermediary organization,” like those supported by the National Fund.

“That means an organization that is familiar with the supply of workers, and is also very familiar with what the companies need in terms of skills,” he says. “That’s most important. The intermediary is an organization that can prepare workers who are ready to be successful at the training. In addition, they must be capable of making cogent reports that are required by funders, and that includes information about the characteristics of the workers participating and the skills they obtained.”

Keep the training plan simple, he adds, and make sure the worker understands what’s expected of him or her, and that the company can follow through with those expectations.

“For example, you don’t want to bring in somebody that drives a forklift,” Dedrick says. “That’s not worth anybody’s time or money. You want knowledgeable, advanced workers. What you want to do is be able to make sure that you have an opening, and that you have a good teacher that can deliver that training to these people in a way that everybody benefits.”

Results from the program not only provided insights into the best uses of on-the job training within the workforce development system, but according to the report, it also identified ways to improve the effectiveness of OJT programs in general.

Specifically, to design OJT programs that provide the greatest benefit to employers and workers, workforce partnerships should strive to:

  • Focus on how to increase career opportunities for low-skilled, low-wage workers;
  • Reduce bureaucratic processes and reporting requirements to encourage greater participation from manufacturing employers;
  • Ensure that planning and execution lead to programs that are focused on quality and depth of training;
  • Incorporate industry-recognized credentials into OJT programs, while allowing employers flexibility in designing their own training;
  • Expand traditional OJT models beyond new hires to include incumbent entry-level workers;
  • Support employer training strategies and professional development for supervisors.

These initial results show promise in helping to cultivate a highly skilled labor force and address the skills gap in advance manufacturing, Dedrick says.

“It warrants further exploration to determine how on-the-job training can be designed to ensure a strong return on investment for employers and give entry-level workers the tools to advance in their careers.”

About the National Fund for Workforce Solutions
The National Fund for Workforce Solutions, based in Boston, Mass., is an unprecedented initiative of more than 400 national and local funders whose goal is the career advancement of low-wage workers. The National Fund supports regional collaboratives in 30 communities across the country. Together, they organize industry partnerships to develop a pipeline of skilled workers to meet the needs of employers and promote improvements to business practices and public policies that lead to better career opportunities for our nation’s workers and jobseekers.


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