Automotive supplier Benteler Automotive Corp. faces a grim reality: Two-thirds of the company’s maintenance technicians will “retire out” of the workforce over the next few years.

The Tier One supplier to OEMs ranging from Ford and General Motors to BMW needs to hire about 60 people to replace the maintenance technicians that are expected to retire at its Michigan plants in Galesburg, Grand Rapids and Holland.

But rather than poach employees from other manufacturers or just hope people with the right skills will show up at Benteler’s doorstep, the company opted instead to take training into its own hands with the creation of an apprenticeship program in Kalamazoo, according to executive Duke Moses.

“The guy I am looking for, someone else already has him,” said Moses, manager of Benteler Academy, the training division of Benteler Automotive. “It really takes growing your own (workforce) now to have a sustainable long-term plan for the normal attrition of retirement.”

In Kalamazoo, Benteler is partnering with schools and talent agencies to identify seven students for the company’s new apprenticeship program.

Experts say many West Michigan manufacturers have revisited the apprenticeship-based training model in recent years. For one, the apprenticeships have students working from day one and the programs come at no cost to the employer to set up, said Jakki Bungart-Bibb, deputy director of operations for the Kalamazoobased W.E. Upjohn Institute for Employment Research.

“We are seeing a lot of manufacturers going that route again,” Bungart-Bibb told MiBiz. “Many years ago, apprenticeships were what most manufacturers did. Then we went through a stage where they didn’t do it anymore. Now, there is a talent shortage so people are going more toward that route to fill that gap.”

The talent gap is projected to worsen in the coming years. According to a recent study commissioned by the Michigan Talent Investment Agency, Michigan employers will have more than 811,000 jobs to fill through 2024 in growing sectors like I.T. and computer science, manufacturing, health care and other professional trades.

At Benteler, creating a talent pool through apprenticeships solves many of the problems the company faces over the next two years and helps it replace an aging workforce, Moses said.

“The individual we are looking for is not unemployed, and you are not going to hire them away from another company,” Moses told MiBiz. “It’s really difficult now. It’s much easier to create your own culture, create your own talent pool.”

That’s why Benteler Automotive has partnered with Kalamazoo Valley Community College on the apprenticeship program. The apprenticeships from Benteler Automotive are a five-year commitment for students, with three years of the program taking place in a college setting. For the remaining two years, the student learns while working full time at Benteler Automotive, Moses said.

“We have a lot of attrition, a retiring workforce that’s going to happen over the next couple of years, and we’ve decided that our long-term sustainable model to replace those retiring from the workforce is to go the apprenticeship route,” Moses said.

Benteler’s apprentices are paid $10 an hour while they are at school, earn several certifications and credentials, and can receive their journeyman’s card in mechatronics or other fields. As an added incentive, Benteler Automotive apprentices also have their housing and education paid for while attending classes.

“They are making a little bit of a salary while they are doing their schooling,” Moses said. “It’s pretty lucrative. … They will come out of the three years and have a huge jump in pay (compared) to the entry level, for example, as a maintenance technician or an electrical journeyman.”

ENTICING STUDENTS TO FACTORY

To encourage students to consider a career in the skilled trades, Benteler Automotive employees are “actually going to students and their parents,” according to Moses. That translates into the company attending several annual events, including recruitment fairs, to stay in contact with high school, vocational center and community college students in each region of Michigan.

The proactive approach differs from other manufacturers, who rely on factory tours or talent agencies to bring in new workers, according to Moses.

“We are not waiting on the school to come to the manufacturer because if you do, then it won’t happen,” Moses said. “That’s how we are attacking the recruiting of the students, by targeting students all the way back to ninth grade. … If you wait too long, those students have already made a decision by the 12th grade of what they want to do. You have to get them early on, especially with their parents.”

Most manufacturers face an uphill battle when it comes to career opportunities in their industry. To that end, a recent survey of more than 400 students and 600 parents commissioned by the Michigan Talent Investment Agency found “low awareness and limited knowledge” about the opportunities that exist with apprenticeships.

Moses wants to change that through Benteler’s outreach.

“They can get a better understanding of what Benteler and other manufacturers are trying to do now (with apprenticeships), and that it gives a kid a great education, a great work experience and (they) come out of college with no debt,” he said.

FINDING APPLICANTS

One reason manufacturers struggle to find workers relates to the overall lack of applicants, especially as unemployment in West Michigan hovers around or below 4 percent.

According to a study from Milwaukee-based staffing firm ManpowerGroup, talent shortages are growing around the world, reaching a 12-year high in 2018 with 46 percent of U.S. companies noting difficulties in hiring employees.

“As companies digitalize, automate and transform, finding candidates with the right blend of technical skills and human strengths is more important than ever — yet 27 percent of employers say applicants lack either the hard skills or the human strengths they need,” according to the study.

Sammie Lukaskiewicz, deputy director of marketing and strategy for the Michigan Department of Talent and Economic Development, said the challenge in the state is more of a “career awareness” gap, in that people don’t understand what options are available with apprenticeships.

“I think it’s this perception issue we have with skilled trades,” Lukaskiewicz said. “People think these are dirty, dangerous and dead-end jobs. They don’t understand that with an apprenticeship, you can get a college education, making money while you are learning how to do the job.”

Changing that perception means helping young people and parents understand that “a great career doesn’t always need college,” Lukaskiewicz said.

Recently, business leaders and educators launched the Michigan Apprenticeship Experience Sooner campaign, a marketing effort led by the state to raise public awareness for students, parents, educators and employers about the value of apprenticeships.

The campaign aims to pinpoint some of the perks of apprenticeships, including students earning money while in school and having a full-time job once the program is completed.

According to statistics from the United States Department of Labor, Michigan had 17,731 active apprentices in 2017, up nearly 29 percent from the year prior.

The initiative’s goal now is to increase participation in apprenticeships by 15 percent annually in Michigan.

“Apprenticeships are a long-term investment by the employer, who is training them to fit needs of their company, ” said Bungart-Bibb of the Upjohn Institute. “People out of high school have for years been pushed to go to college. With apprenticeships, students are still learning a skill. It’s one of the difficulties to get younger people (interested in) apprenticeships, but we think it’s starting to catch on.”

Source: MiBiz

Rick Williams

Rick is the Managing Partner of Polk and Associates and Director of our Attest, and Manufacturing services divisions. He earned his Bachelor of Science degree in Accounting from Western Michigan University and earned his Accreditation in Business Valuation from the AICPA and is a Chartered Global Management Accountant. Rick is a member of the Michigan Association of Certified Public Accountants, American Institute of Certified Public Accountants, AICPA Forensic and Valuation Services section, Michigan Manufacturers Association, MMA Tax Policy Committee, SAE, Affordable Housing Association of Certified Public Accountants, and Automation Alley.

RWilliams@polkcpa.com