As Foxconn Technology Group, which makes electronic components, builds its 22-million-square-foot manufacturing campus in Mount Pleasant, thousands of new jobs are headed to Racine County. The project is one of the largest manufacturing campuses in the country. But local employers already have difficulty finding people to work for them, and they’re expected to hire more people over the next five years as well, according to the 2017 Racine County Economic and Workforce Profile by the Wisconsin Department of Workforce Development.
Foxconn Technology Group will need 10,000 construction workers to build its 22-million-square-foot manufacturing campus and 3,000 workers once the facility is built. Indeed.com, a national employment platform, already has about 2,600 jobs listed in the Racine-area. Companies like national trucking firm JB Hunt are buying billboards to advertise jobs while others promise significant signing bonuses.
The good news for skilled workers is that the tight labor market has tipped in their favor. But the problem is that Racine County still has thousands of people who are unemployed and underemployed locally who have been left behind for a myriad of reasons.
Not long ago the shoe was on the other foot: companies weren’t hiring and now they are, said Heather Halbach, human resources generalist for Racine Metal-Fab.
“It wasn’t that long ago that employees couldn’t find work, now it’s employers who can’t find workers,” she said. “There’s that security, that ‘I’m in a job, I like it. It’s good enough, I’m going to stay here.’ And I think it’s pretty stressful for people to switch jobs too.”
Why are thousands of jobs going unfilled in Racine?
The short answer: The work has changed, and the skills needed to land a good paying job are radically different than 20 years ago. Also, workers entering the workforce are also not as loyal to employers as they once were, which creates a higher turnover rate, according to the U.S. Bureau of Labor Statistics. Manufacturers often expect new hires to hit the ground running with little on-the-job training, yet few applicants in a transitioning workforce have the required experience. Frustrations exist on both sides as companies and workers work through barriers to employment. These barriers include lack of education, drug/alcohol abuse, lack of transportation, inadequate childcare, and health problems.
The paradox: Racine’s employability problem
The dearth of skilled workers will increase as boomers retire is projected to grow over the next few years as the last of the baby boomers in the workforce continue to retire.
The largest number of job openings are forecast to be in manufacturing, information technology, healthcare, transportation, and logistics, according to the Wisconsin Department of Workforce Development. Despite the need, a significant portion of Racine’s 78,000 residents find themselves shut out.
One major reason: most well-paying jobs require some type of post-secondary training, and about 19 percent, of Racine residents over the age of 25 (that’s about 9,000 people) did not graduate from high school or earn a GED, according to the 2016 United Way of Racine County Community Indicators Report.
The problem worsens when you separate residents by race: 22 percent of black residents over the age of 25 don’t have a GED or high school diploma. The same is true for 32 percent of Hispanic residents older than 25, according to Higher Expectations of Racine County.
Read more about Black unemployment.
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Local company struggles to find workers, they aren’t alone
John Baker, vice president of manufacturing for the EC Styberg Engineering Co., said his company hired 164 people — punch press operators, computer-controlled machinery operators, grinders, and welders — from October 2017 through October 2018.
Despite having a training program, a competitive benefits program and a starting wage of $14.22/hour, they haven’t retained a single worker from this period because of poor attendance issues and not being able to handle the job. The company has also lost seasoned employees through retirement, he said.
Baker frames the problem of finding skilled workers as a social issue that has swelled into a crisis. But education and government programs have just started to address a problem that has existed for several years. And Baker’s patience with government leaders and workforce agencies is growing thin.
“There’s no urgency,” Baker said. “Everyone I know in manufacturing — and I know my share of people — they are all in the same boat as we are. There is a crisis right now. And Foxconn hasn’t even started really. We need qualified people that understand what work is about.”
To keep employees long-term, Styberg also offers a career path and opportunities for company-paid educational opportunities.
“We try to be very versatile that way, but that’s not really working either,” he said.
One stable pipeline of talent has been through the state’s re-entry program for minimum-security inmates through the Department of Corrections.
“They are a captive audience… and it’s working,” Baker said.
Gary Kinsley, the human resources manager for Styberg, said the biggest difference is transportation because the state provides transportation to and from work.
“They give us good candidates, good quality people,” he said.
Styberg isn’t the only company that has seen a drought in candidates applying for jobs.
Dean Popek, CFO for Racine Metal-Fab, said his company typically hires punch press and brake press operators. The jobs require a high school diploma, patience and teamwork. For certain positions, finding workers has been challenging.
He affectionately calls those jobs his “purple squirrels” because they are so hard to find.
“You can’t find the person,” he said. “They are either very happy where they are at or they are just not out there. No one has that skill anymore. But I don’t necessarily subscribe to that. I think most people aren’t moving around.”
To get new hires working quicker, RMF is now doing phone screening and interviews faster, making offers that same day.
“We’re being more creative in thinking about what we’re going to offer them,” Popek said.
‘Skilling up’ – whose job is it?
Companies — like Styberg and Racine Metal-Fab — also offer more opportunities for advancement for those wanting to learn new skills. This is important because a number of companies are moving toward advanced manufacturing processes, which require a different set of skills.
Metaphorically, manufacturers used to make 10,000 widgets with 10,000 hands. Now manufacturers make 10,000 widgets with one machine. And, technology continues to change.
Part of the issue is that workers have not been willing to keep their work skills current with the job market, said Jeff Sachse, an economics professor at the University of Wisconsin-Oshkosh.
“There has been an unwillingness on the part of workers to learn these skills,” he said. “There is also a lack of experience in them [acquiring training] themselves. So now workers are responsible for their career development and companies are moving faster into new technology.”
But companies are also starting to offer more training opportunities.
According to ManpowerGroup’s 2018 annual Talent Shortage Survey, over half of the 39,000 companies surveyed indicated they were providing additional training, up 20 percent from 2014. A greater number of employers are also adjusting education and experience requirements, but they — like Styberg — are recruiting from outside traditional talent pools, exploring alternative work models, and over one-third are offering higher salary packages.
Styberg has invested more than $700,000 in training over the past four years, but Baker feels he has essentially gotten nothing out of his investment since he hasn’t retained the workers he’s trained.
“We really have not gained anything (through these training programs),” he said.
This issue has been at the forefront of several initiatives for Racine Mayor Cory Mason, but he has only been in office for a year. The city recently received $1.5 million in federal workforce development grants to help people get into the building trades. It is one of the largest immediate needs with about 10,000 construction workers needed to build the Foxconn facility.
“I am very proud of the local partnerships we’ve forged on these issues. I can’t say enough good things about United Way and Higher Expectations,” Mason said in an interview earlier this month. “The County Executive is deeply committed to reducing these inequalities, too. He started the Uplift 900 program. That goes very well with the Racine Works program we’ve got going to get people trained.”
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Skilled, but opting out of manufacturing
So what does it mean when companies can’t find skilled workers?
After decades of stagnant wages, employees are starting to see more overtime opportunities and wages are starting to increase. But the lack of movement over the past 20 years has left a sour taste for some employees and potential candidates, said Terri Steidl, who owns Human Resources Consulting Group.
“There is a population out there feeling underpaid, under-utilized and under-considered,” Steidl said. “They have the potential to be really great if they were put in the right job. But they aren’t so there’s a lot of disenchantment, and they are opting out in their own ways.”
This holds true for Clayton Gustin, 23, of Racine, who found himself unemployed a few months ago after working as a bartender at a local restaurant. At the time, he discovered that he was at a bit of a crossroads in his life.
Trained as a computer-controlled machinery operator, Gustin could find a job in manufacturing, but the work doesn’t appeal to him anymore. He lost the tip of a finger in a work accident a few years ago, and, since he’s a drummer, he doesn’t want to further risk his health.
Gustin is holding out for a better job — one that isn’t in the food and beverage industry or in manufacturing — until his music career takes off, he said.
“I have these things that I want for myself,” he said. “How long do you put yourself on the back burner to achieve what you have to do to get what you want to do?”
For Gustin, going back into manufacturing means being trapped in an industry where he feels employers don’t value their workers.
“Why would I want to work for $11 or $12 an hour — or whatever they are paying these days — on a manufacturing job where the company is making millions off of my work?” he said.
Editor’s note: This is the first story in a series about Racine County’s labor market called Catch 22. To read more, click here. Next week we’ll tell you what specific jobs are most in demand and what training programs are available.