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VOL. 128 | NO. 109 | Wednesday, June 05, 2013

‘Made in Memphis’ Study Points to Hiring Challenges

By Bill Dries

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A new report on manufacturing jobs in the Memphis area shows rapid growth through 2016.

Workers at Sharp Manufacturing Co. are part of a local manufacturing workforce that is expected to grow by 4,000 jobs through 2016.

(Daily News File/Lance Murphey)

But the study by the Workforce Investment Network and the Greater Memphis Chamber, along with Memphis Mayor A C Wharton Jr. and Shelby County Mayor Mark Luttrell, also points to the challenge that those manufacturing employers face in finding enough of the right workers for the rejuvenated sector that was once a dominant part of the Memphis economy.

Manufacturing is making a return but on different terms than its peak in the mid 1970s, according to the report titled “Made in Memphis.” Today’s factories and plants hire fewer workers and are filled with complex machines with computer programming that requires more than basic training on how to operate one machine that performs one function.

The 2012 analysis released Monday, June 3, shows manufacturers in the Memphis area planned to hire more than 4,000 employees through 2016 at an average annual pay of $32,180.

That’s a direct wage impact of $128.7 million on the local economy. It’s an estimate local economic development leaders have been aware of for quite a while.

“This trend diversifies the Memphis economy that has historically been dominated by logistics and distribution, healthcare and tourism,” reads the executive summary of the report. “The rapid growth presents an opportunity and a challenge to provide a skilled manufacturing workforce.”

The report includes a survey of employers completed by 40 Memphis-area companies, whose leaders included details about the jobs and specific skills needed for them.

“Respondents reported few effective job announcement placement strategies,” the summary continued. “Few employers reported working with educational institutions to recruit employees.”

The report recommends the kind of specific training that leaders at WIN and Southwest Tennessee Community College specifically formulated in response to problems in finding workers for the Blues City Brewing plant and the new Electrolux and Mitsubishi plants.

The curriculum in which the companies had their own executives in the classroom during training has been praised by executives at all three companies for producing the kinds of local workers they are searching for.

But there are challenges beyond learning a specific skill or the workforce culture of a specific workplace that suggest long term solutions are needed.

The “Made in Memphis” report includes U.S. Bureau of Labor Statistics figures showing 34,272 manufacturing jobs in the Memphis economy led by paper manufacturing with 4,870 jobs followed closely by machinery, chemical, fabricated metal and food. Each of those four categories shows 3,412 to 3,843 jobs each.

The employers listed the top job skill on a list of 25 as “respecting the views of others. That was followed by creating and implementing standard operating procedures, literacy and arithmetic.

The employers listed literacy, arithmetic and computer skills as the top three academic skills in that order.

The report also indicated some gulfs between employees and employers in manufacturing when it comes to pay and promotions.

Employers said the pay scale in manufacturing jobs is a “challenge” because entry-level pay doesn’t offset costs of independent transportation and childcare for employees.

“Also some employees do not seem to understand the value of employee benefits, when offered, and instead focus on the amount of hourly wages,” the report reads. “The employees, according to the workforce professionals interviewed, frequently use these perceptions as reasons to leave companies in favor of sometimes only slight increases in pay.”

But the report also points to another reason for the high turnover, which becomes a critical factor when the cost to employers of the job training in factored in.

Employees felt like they were locked out of front office jobs in terms of advancement because employers preferred to hire outside the company for executive positions.

Promotion from within from entry level to floor leadership is possible according to the employers surveyed. But the front office is a different matter as far as those employees were concerned.

“Employees see little control of their own careers as they see limited opportunities to advance into management positions,” the report concludes, citing the employers surveyed. “Further, few employees seem to understand the connection between continued training and advancement in position or pay.”

The report also recommends that companies donate expertise and equipment to help with training and that educators create a better coordinated set of credentials for associate degrees and other certification that allow an employee to advance further beyond a single level of training. The coordination is referred to as “stackable credentials.”

And the report recommends a marketing campaign to promote the availability of manufacturing jobs in Memphis.

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