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Ohio Compresser Maker Hunts for Workers Amid Skills Gap

Ariel Corp. couldn’t find the machinists, mechanics and maintenance workers it needed to make natural-gas compressors, so it turned to the roads and highways of Ohio for help.

The company has spent hundreds of thousands of dollars since 2009 on an advertising campaign that included billboards in different parts of Ohio. Its goal: to fill more than 200 jobs in a state with an unemployment rate that’s averaged 9.2 percent over the last three years, said Kent Dubbe, vice president of human resources at the closely held, Mount Vernon-based company.

Ariel, which calls itself the world’s largest maker of separable reciprocating gas compressors and has sales offices in 10 countries, is willing to pay workers’ relocation costs, and Dubbe said he challenges his staff to do “out-of-the-box thinking” to attract good people.

“It really is unfortunate in today’s times that you have to spend that kind of money to get the word out,” he said.

While the U.S. has struggled through 43 straight months of unemployment exceeding 8 percent, Ariel and companies in industries such as advanced manufacturing and health care say they have job openings they can’t fill, forcing them to push the boundaries to attract skilled and experienced workers.

Unfilled Jobs

There were 3.7 million U.S. job openings in July, up from 3.4 million a year earlier, according to the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. Stephen Rose, a research professor at the Georgetown University Center on Education and the Workforce in Washington, estimates that 2.2 million jobs are going unfilled because of a mismatch between available positions and qualified workers.

Analysts cite everything from the disappearance of shop classes in school to the pressure on students to attend college instead of cultivating vocational skills for the difficulty in finding workers for some manufacturing jobs. In health care, demand for nurses and other professionals is surging as 10,000 baby boomers turn 65 each day, according to the Pew Research Center, placing increasing pressure on the medical system.

For those and other industries, another issue is the wariness of so many workers to change jobs or to risk moving because of the housing market’s continued weakness.

Something Wrong

Rose is among economists who say there’s little evidence the problem is much worse today than in the past. Yet the sheer number of available positions at a time the economy is so weak underscores the need to better align education and training to ensure there are workers with the skills to fill these jobs, said Cheryl Oldham, vice president of the Institute for a Competitive Workforce at the U.S. Chamber of Commerce.

“There’s something we’re not doing right here,” Oldham said in a telephone interview from Washington.

Former President Bill Clinton highlighted the issue during his Sept. 5 speech at the Democratic National Convention in Charlotte, North Carolina, saying, “We have to prepare more Americans for the new jobs that are actually going to be created.”

Ohio Governor John Kasich says he wants to revamp the state’s workforce-training programs and get businesses to provide forecasts of jobs they expect to have so schools can prepare students.

“If we can begin to get the community colleges, the technical schools, the vocational schools and the four-year schools working hand-in-hand with business, we can fix this,” Kasich, a first-term Republican, told reporters on June 13 during a press conference in Columbus.

Skills Gap

Other governors also have focused on the issue. Massachusetts Governor Deval Patrick, a Democrat, signed a bill on Aug. 7 that included $5 million for a trust fund to prepare residents for high-demand jobs and to help “close the middle- skills gap,” Patrick’s office said in a release.

Ohio’s economy has improved and the state’s unemployment rate was 7.2 percent in July, lower than the 8.3 percent national average that month. There were more than 188,300 online job postings from June 14 through July 13, with more than 40 percent paying $50,000 a year or more, according to Conference Board data reported on the state’s Ohio Means Jobs website.

International Business Machines Corp. (IBM) had the most job ads during that time with 1,916, followed by the Cleveland Clinic with 1,874. Registered nurses accounted for the second-most postings among all job ads with 6,548, the website said.

The clinic needed so many registered nurses this year that for three days during the football off-season in March, it hosted an event at Cleveland Browns Stadium where about 500 nurses were screened, interviewed and hired in the same day.

Audacious Plan

The career fair attracted 1,600 attendees from across the U.S., according to the nonprofit clinic, which says it has treated patients from every state and more than 100 countries. It was a way to find qualified nurses and shave time off the hiring process, said Scott Doak, senior director of talent acquisition.

“It was a huge, audacious idea,” Doak said. “Let’s go to the biggest place that we can go, and let’s really broadcast out that nursing is open for business at the Cleveland Clinic.”

The issue at the Cleveland Clinic isn’t as much the training of available workers as the time it takes to fill positions with a shortage of nurses and an increasing need for health-care workers, said Joe Patrnchak, the chief human resources officer.

The American Nurses Association doesn’t track the number of open positions nationwide, yet it pointed to Bureau of Labor Statistics projections that there will be 712,000 new nursing jobs by 2020.

600,000 Positions

U.S. manufacturing companies can’t fill as many as 600,000 skilled positions because of a lack of qualified applicants, according to a survey by Deloitte Touche Tohmatsu Ltd. and the Washington-based Manufacturing Institute released in October.

IBM needs almost 3,000 U.S. information-technology workers it hasn’t been able to hire because of a skills gap, said spokesman Scott Cook. In response, the company is helping schools develop curricula and released a “playbook” education model in February for grades 9-14 aligning technology skills with available jobs, Cook said. That followed IBM’s work with New York in 2011 to open the Pathways in Technology Early College High School in Brooklyn, he said.

Darlene Miller, president and chief executive officer of Permac Industries in Burnsville, Minnesota, and a member of the President’s Council on Jobs and Competitiveness, was so frustrated by the inability to fill positions at her 36-employee precision-parts-manufacturing company that she worked with the National Association of Manufacturers and Minnesota technical and community colleges to create Right Skills Now. It allows individuals to earn college credit and industry certifications in 16 weeks, followed by an internship.

Unsexy Manufacturing

The program has since been adopted in Nevada, Michigan and Washington.

There’s a shortage of machinists, machinery-repair technicians, welders and workers in other skilled trades, said Gardner Carrick, vice president for strategic initiatives at the Manufacturing Institute.

Why? Two generations of students have received no shop class in school, careers in manufacturing aren’t considered “sexy,” and students are constantly being pushed to attend college, said Kelly Wallace, 55, director of adult workforce education at the Career and Technology Education Center outside of Columbus. It is an adult workforce-education center that is part of the Ohio public university system and offers one-year training programs.

“One of the reasons this mismatch exists is because of the culture of ‘everyone has to have a four-year degree,’ and quite frankly, they don’t teach this stuff at the four-year schools,” said Wallace, who has worked at the center for almost 30 years.

Manufacturing Day

Staffing provider Kelly Services Inc. (KELYA) said today it is hosting career fairs, workshops and other events throughout the U.S. on Oct. 5 with groups including the Manufacturing Institute as part of a “National Manufacturing Day” to highlight the skills needed and jobs available.

“Despite stubbornly high unemployment, the manufacturing industry is changing so rapidly that it’s struggling to find people with the right skills,” Teresa S. Carroll, senior vice president of Troy, Michigan-based Kelly Services, said in a release.

The Institute for a Competitive Workforce also has scheduled a Sept. 20 summit in Washington “to address our nation’s skills gap crisis” with speakers including Virginia Governor Bob McDonnell and Margaret Spellings, former U.S. secretary of education and a senior adviser to the U.S. Chamber of Commerce.

Selling Homes

Another reason companies are struggling is a lack of churn in employment because many workers are reluctant to change positions in an uncertain economy, said Betsey Stevenson, a former chief economist at the U.S. Labor Department and now an associate professor of public policy at the University of Michigan in Ann Arbor. Others don’t want to risk moving because it’s often difficult to sell their homes.

A July report by the Federal Reserve Bank of Chicago said if there is a disconnect in the U.S. labor market, “it is likely most prominent for workers in the middle of the skills range.” Examples include electricians, dental assistants and legal secretaries, economist Jason Faberman said in an e-mail.

“It’s certainly the case that the more business people I talk to seriously mention that the skill levels of the applicants aren’t quite in line with the job openings that they have,” Chicago Fed President Charles Evans said yesterday in response to a question after a speech in Ann Arbor, Michigan.

Excessive Qualifications

Because growth is not vibrant, businesses also are less willing to pay to train workers than they might normally have been, Evans said.

Jesse Rothstein, a labor economist at the University of California-Berkeley and a former chief economist at the U.S. Labor Department, said he has seen evidence that some employers are requiring excessive qualifications for skilled jobs or are setting wages lower than workers are willing or able to accept.

Ryan Costella, director of strategic initiatives at Click Bond in Nevada, which makes adhesive-bonded fasteners for the aerospace industry with 325 workers, said his company is paying an entry-level salary of $12-to-$14 an hour and can’t fill about 10 positions even with a state jobless rate of 12 percent in July, the highest in the U.S.

“I’m not looking for astrophysicists here,” Costella said. “I’m looking for people who have verifiable skill sets to read, write, do math, problem solve, communicate in teams, show up on time.”

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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