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Even California knows better

Several recent anti-business measures of note followed a similar path: a liberally-minded west coast jurisdiction (usually San Francisco or Seattle) passes the legislation at the local level, and it is then passed statewide, before eventually making its way to the New York City Council and our state Legislature. We saw this most recently with the $15 an hour minimum wage and Paid Family Leave.

One recent effort actually started with the federal government before trickling down to New York State. Earlier this year, Governor Cuomo issued Executive Order 162. The order requires, among other things, state contractors of any size to submit reports to the state on their pay practices, broken down according to the gender and racial makeup of their workforce. The Executive Order mandates that most contractors submit their data quarterly, with contractors and subcontractors on construction projects required to report monthly. While New York’s order was modeled after a similar program on the federal level, the federal order was less onerous and has been stayed under the current administration.

You may be wondering why we referenced the west coast. Well, just last week California Governor Jerry Brown vetoed a similar piece of legislation for numerous reasons, including saying: “…it is unclear that the bill as written, given its ambiguous wording, will provide data that will meaningfully contribute to efforts to close the gender wage gap.” We would further note that the vetoed California legislation was far less onerous than New York’s, requiring that only employers with 500 or more employees submit said data, and that such data only be reported every other year.

New York’s mandate is far more broad and raises additional concerns, including:

– requiring pay data reports on a quarterly basis for most state contractors (all contracts valued at more than $25,000), and monthly for construction contracts valued at more than $100,000, compared to the annual reports required under the now-stayed federal EEO-1, and the biennial reports that would have been  required under the new California law.

– requiring pay data from all subcontractors as well, regardless of the value of subcontract, and it can require contractors to assure compliance by, or even mandate that they collect pay data from, their subcontractors.  This will put employers in the difficult position of having to submit confidential pay data to competitor firms.

– unlike the federal initiative,  which was adopted through a formal rulemaking process, or the California proposal that was passed by the state legislature, New York’s proposal was launched by an executive order issued with no notice, and with no input from affected employers.  Since it was not subject to the state Administrative Procedures Act, as a formal rulemaking would be, it had a limited 30 day public comment period, and did not require the state to do an impact assessment or consider alternative compliance measures for small business.

– while the federal EE0-1 required pay data to be reported by broad occupational categories, the state requires reports by one of more than 800 occupational titles, dramatically increasing compliance efforts and costs  (and, remember, under the New York State program, this is a monthly or quarterly, not annual, report.)

– the “granularity” of the state pay data reports will allow for the identification of individual’s pay level, as well as details about an employer’s general pay practice, but there is nothing in the Executive Order that provides legal protection against public disclosure of this confidential business and personal data.

To the administration’s credit, they have been willing to listen to concerns raised by The Business  Council and others – yet the order remains in place. We hope the recent action in California will prompt New York State officials to take a second look at EO 162 and make significant adjustments, or better yet, scrap the program entirely.

Business Council rebuts claims in Times Union Editorial

The below letter to the editor was submitted to the Albany Times Union last week. 

New York’s so-called “scaffold law” may be the most misunderstood, or at least most mischaracterized, section of New York State statute. And based on your September 24 editorial, “An attack on worker safety,” the Times Union editorial board has never read New York State Labor Law Section 240 or Congressman Faso’s proposed legislation. We have attached copies of both for your review. Upon review, the board will see the Faso legislation does not change a word in existing NYS labor safety standards. Furthermore, in no way does the Faso bill, or similar state-level proposals, “erod[e] worker protections.” Likewise, your editorial is simply wrong in asserting that contractors and property owners are only liable under court interpretations of Section 240 “if property safety measures weren’t in place.” Courts developed the strict liability standard for property owners and contractors for such injuries, even if workers ignore safety standards or safety equipment.  

The reforms proposed at both the state and federal level simply apply the exact same liability standard – contributory negligence – to Section 240 claims that apply to all other types of tort claims under long-standing New York State law. In doing so, New York also matches the approach of every other state. There is no doubt the current tilted 240 liability standard adds significantly to the direct cost of public and private construction in New York State, and impacts the state’s economic competitiveness with other states.

Ken Pokalsky
Vice President
The Business Council of New York State
Albany, NY

Employer-Education Partnerships to Address the Skills Gap in New York

Part eight of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

To a troubling extent, the origins of the skills gap can be traced to failures in the U.S. education system.  Seemingly immune to the technological advances that have transformed almost every other aspect of modern life, education in America has remained relatively unchanged since the mid-nineteenth century.  The system is self-contained and its methods self-replicating, passed down from colleges of education to teachers over generations.  As Massachusetts’ former education commissioner David P. Driscoll is fond of noting, “If Horace Mann were alive today, the only institution he would recognize would be our schools.” Without influence and ideas from outside the system, it is easy to see how American education could continue in the same way for decades into the future.

Education cannot be successful with K-12 educators working on their own.  And I say this as a former Deputy Chancellor in New York City.  Higher education cannot be successful without deep collaboration with the K-12 system.  And the missing piece is employers.  We need to work together to improve college readiness and completion, and to ensure there are a variety of options for students to have careers that are important to them and to New York State.  Employers can’t sit back and say we wish education were better.  We need to roll up our sleeves and help.
— Stanley S. Litow, IBM

In recent years, the business community has taken the lead in calling for changes to bring our education system into step with the demands of today’s world.  Their investments in and partnerships with education are bearing fruit.

Many of the respondents to a recent Public Policy Institute survey said that their company is currently investing in or collaborating with an education or training institution or program, or that they had done so recently.  Their partners included every type of public and private education and training provider, but the most common were SUNY two- and four-year institutions.  Also very common were partnerships with Boards of Cooperative Educational Services (BOCES), followed by K-12 schools and districts—including some charters, and private schools—and private colleges and universities.  One respondent reported partnering with an early learning program.  Perhaps most innovative are the collaborations with NYS P-TECH programs, which bring together school districts, higher education institutions, and employer partners to provide an integrated high school and associate degree program that prepares students to step right into middle skills jobs.

Those employers who were not involved in any education and training partnerships expressed strong interest in such collaborations.  In fact, more than 80% said they would be interested in partnering with a community college, and only one respondent said their company would not be interested in any kind of partnership.  Interest was particularly strong in partnering with higher education institutions and with BOCES, which are known for offering career and technical education programs, as opposed to K-12 and early learning programs.  This reflects the broader pattern of demand for employees with technical skills and at least some college education, and likely also reflects executives’ desire to realize a relatively rapid return on their investments.

Which education/training partners is your company most interested in?

Which education/training partners is your company most interested in?

Read part seven of the series here.

Manufacturing’s Changing Landscape in New York

Part seven of an ongoing series based on our recent PPI report:
Bridging the STEM skills gap: Employer/educator collaboration in New York

New York’s manufacturing sector has seen tough times, but with technological changes and the rise of advanced manufacturing, the sector is rebounding and jobs are coming back.

“We often talk about, ‘can we bring back good jobs in manufacturing’—and by that, we mean jobs that pay good wages with just a high school degree,” says Chauncy Lennon, Managing Director and Head of Workforce Initiatives, Global Philanthropy at JPMorgan Chase.  “Those jobs are shrinking and will continue to, mostly because of technology.  We are seeing jobs coming back in manufacturing, but they are advanced manufacturing jobs that require a high school degree and some type of post-secondary training.”

“Getting people interested in these careers is challenging—especially young people,” says Bruce Hamm of the Manufacturers Association of Central New York (MACNY). “Historically, over the last few decades, we’ve had so much manufacturing leave New York because of offshoring; we were one of the rust belt states.  The fact that modern manufacturing has changed the whole equation hasn’t penetrated to the public, the schools, the kids, or the parents for that matter.”

Lennon agrees.  “Factories used to be dirty, dark, and dangerous,” he says.  “Today, they are clean, well-lit, and safe”—with high-tech machines and increasingly automated production.

According to Hamm, teachers and school counselors may not be aware of how the manufacturing sector has changed, and that as a result, “going into manufacturing is not even considered.”  He says that some of the best preparation for the new manufacturing jobs can be done in the public schools—career and technical education programs and Boards of Cooperative Educational Services—as well as community colleges.

A lot of these jobs are not four-year-degree jobs, they’re complex technical jobs that need middle skills.  There are excellent jobs available as machinists and welders—we’ve got welders making six-figure salaries, and a good machinist can easily be fifty to sixty thousand dollars a year.  Most of the apprenticeships that we’re creating now have ending salaries in the $50,000 range, so they’re coming out with $25 an hour, plus or minus. 

And the pace of manufacturing job creation may be picking up.  The Business Council’s Briccetti notes that the tax climate for manufacturing and emerging technology companies based in New York State has become more favorable in recent years.  In 2014, New York State reduced the effective tax rate for “qualified manufacturers” to zero percent and enacted additional tax breaks targeting the manufacturing and emerging technology sectors, with the goal of stimulating investment and employment.

The environment could improve even further if the federal government enacts additional corporate tax reforms such as the one proposed by House Speaker Paul Ryan (R-WI).  “The current system for taxing foreign profits of American corporations incentivizes companies to build offshore,” Briccetti says.  “Ryan’s proposal would flip the national tax incentives.”  Under his plan, companies would be taxed based on where their products are sold—rather than where they are produced (or where the corporate headquarters or intellectual property are located.  Thus, imports would be subject to federal tax while exports would not.  By not taxing exports, the plan would incentivize U.S. companies to produce goods domestically.

Read part six of the series here.

Which skills do New York employers have the most difficulty finding?

Part six of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

Over the years, when asked what skills they have had difficulty finding in job candidates, New York employers consistently point to the professional skills that are required in all kinds of workplaces.  In response to Public Policy Institute surveys in both 2014 and 2017, more than half of employers reported high or moderate difficulty finding critical thinking, communications, and problem-solving skills. The figure below shows that, in the 2017 survey, more than half also reported high or moderate difficulty finding candidates with time management skills, and—notably—multiple respondents wrote in that they have difficulty finding employees who are dependable, even though that was not listed as a response option.

Stanley S. Litow of IBM underlines the importance of these traits in a career-ready workforce.  “We’ve had a misnomer for the last decade or more, referring to the job skills required across the labor force as ‘soft skills,’” he says.  “These are not soft skills, they’re essential skills—like writing, problem-solving, presentation skills.  These are the flexible skills required in the workplace.” P-TECH Leadership Council Director Robin Willner agrees.  “To ensure students develop professional skills, those have to be addressed deliberately, with opportunities for students to practice and master them,” she says.

While shortages in professional skills were most pervasive, employers reported that STEM-specific skills and qualifications were the toughest to find.  Almost a quarter of executives reported “high difficulty” finding candidates with the necessary scientific, engineering, and technical skills.  Half reported moderate or high difficulty finding candidates skilled in using technology, and close to 30% reported moderate or high difficulty finding candidates with other STEM skills such as data analysis and applied math.  This is consistent with previous research; for example, on the 2014 Public Policy Institute survey, more than half of employers reported difficulty finding workers with data analysis and applied math skills, and more than 20% of employers found it “very difficult” to do so. Similarly, a 2014 nationwide survey by the Business Roundtable and Change the Equation found that CEOs had particular difficulty finding candidates with STEM skills.

A 2014 nationwide survey fourn that CEOs had particular finding candidates with STEM skills.

As for which qualifications were most difficult to find in job candidates, the largest number of employers mentioned bachelor’s degrees in engineering.  Related entries included Professional Engineering license, Registered Architect license, and master’s degree in engineering.  Numerous employers wrote in particular manufacturing skills and qualifications that do not necessarily require a bachelor’s degree, including:  sourcing and production quality, blueprints, mechanical skills, hand tool use, Fluorescent Penetrant Inspection (FPI) certification, ceramics, welding, and brazing.  Nursing, human services, and health-related qualifications were sought at the bachelor’s level and below, while accounting credentials were sought at the bachelor’s level and higher.  Several employers reported a difficult time finding candidates with bachelor’s degrees combined with the right type of work experience.  Computer science degrees and IT security certifications were also sought.

These findings are broadly consistent with a 2015 study by the Bureau of Labor Statistics, which found demand for STEM employees at the bachelor’s and master’s levels in information technology fields (including particularly high demand for software developers in New York), and demand below the bachelor’s level in manufacturing and the skilled trades, including machinists and technicians.

Over the coming weeks, our blog series will look at how New York employers are partnering with education institutions to address this skills gap. 

Read part five of the series here.

Which STEM jobs are hardest to fill in New York?

Part five of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

Across the state, New York employers responding to a recent Public Policy Institute survey reported difficulty filling STEM positions, and they project that these workforce shortages will persist over the coming decade.

The hardest jobs to fill are skilled production vacancies, according to this study.  One quarter of survey respondents reported moderate or high difficulty filling positions in this category, and 12% reported high difficulty.  Engineering is a close second, with 20% of respondents reporting moderate or high difficulty filling positions.  Fourteen percent of respondents reported moderate or high difficulty filling information technology positions, and 10% reported moderate or high difficulty filling positions in mathematics occupations.  In all of these STEM categories, respondents were almost equally split between “high” and “moderate” difficulty. At least a handful of employers noted difficulty filling positions in each of the other listed STEM categories—environmental science, social science, architecture, and health—and several wrote in additional categories in which they were having trouble filling jobs, including telecommunications, machine operators, and technicians.

STEM positions comprise four of the top five categories of positions that New York employers are finding most difficult to fill.  Seventeen percent of employers reported moderate or high difficulty filling non-STEM positions, with the bulk of those saying that they had “moderate” difficulty filling non-STEM positions.

STEM positions difficult to fill

New York’s employers do not expect the skills gap to go away anytime soon. When asked whether they anticipated new or continuing skills shortages over the next five to ten years, survey respondents identified several areas for concern.  Skilled production is the category in which they anticipate the most severe ongoing shortage. Bruce Hamm, Director of Business Engagement at the Manufacturers Association of Central New York, points out that this is consistent with national data.  “The average age of a skilled worker in manufacturing nationally is 56 years old,” he says. Taking into account both retirements and expansion in the manufacturing sector, a 2015 study projects a shortage of 2 million workers between 2015 and 2025.

Employers responding to the Public Policy Institute survey also predict severe shortages in engineering and information technology occupations. They anticipate a more moderate shortage in mathematics occupations.  Perhaps unsurprisingly, these are the same top four workforce categories in which employers reported the highest difficulty filling jobs currently.  Employers are more optimistic about such occupations as social science and architecture.

Dan Bower, President of HUNT Engineers, Architects & Land Surveyors, underlined the shortage of engineering skills:  “At HUNT currently, eight out of ten résumés we receive for engineering positions are from non-U.S. citizens.”  In the short term, his 110-person company is considering partnering with an immigration law firm to facilitate obtaining visas and citizenship for these candidates.

Looking ahead to create a pipeline for its future workforce needs, HUNT is partnering with the Greater Southern Tier BOCES STEM Academy, a P-TECH early college high school that opened its doors in September 2016.  At the end of six years, students will graduate with both a high school diploma and an associate’s degree and will be given a “first in line” opportunity for job placements with P-TECH corporate mentors.  In future installments of this series, we will take a closer look at the business-led P-TECH initiative.

Read part four of the series here.

 

What does the skills gap map look like in New York?

Part four of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

New York has some of the world’s top universities and attracts highly credentialed scientists from around the globe, so how can we have a shortage of workers with STEM skills?  The answer has to do with the fact that New York is a large and diverse state, with tremendous variation in demographics and economic conditions from region to region.

In the Public Policy’s 2017 skills gap survey, we defined STEM according to the Standard Occupation Classification Policy Committee scheme.  Under our definition, STEM covers a wide array of occupations—from manufacturing technicians to nurses, from civil engineers to computer programmers—and at credential levels from associate’s degree to Ph.D.  In some of these fields, there are regional shortages, while in others, employers have no difficulty finding talented employees.  Thus, rather than statewide, across-the-board shortages, this study and others have found local or regional skills mismatches, varying by industry.

New York Skills Gap Map

In our survey, executives reported the highest difficulty filling positions in Western New York, where one-third of survey respondents reported high difficulty and 62% reported moderate or high difficulty filling positions.  Similarly, in the Southern Tier, one-third of respondents reported high difficulty, and 45% reported moderate or high difficulty filling positions.  In the Capital Region, one-quarter of respondents reported high difficulty and 63% reported moderate or high difficulty filling positions.  In the Finger Lakes, 64% of survey respondents reported moderate or high difficulty filling positions, but only one of those reported high difficulty.

The economic effects of the skills gap take several forms, starting with a reduction in employers’ ability to meet the needs of their customers.  “We’re finding it hurts the manufacturers because you’re having machines sit idle,” says Bruce Hamm, Director of Business Engagement at the Manufacturers Association of Central New York.  “People lose out on orders because they can’t fill them.”

The fact that skills mismatches are localized does not make them less consequential to New York’s economy.  An employer struggling to find skilled workers upstate is unlikely to take comfort in the fact that the very same skills are in oversupply in Long Island.  Some workers may be willing to uproot to a distant town they’ve never heard of, but it is equally likely that the employer may go out of business or relocate to another state.

In addition to the impact on New York’s existing employers, the availability of a skilled workforce—or lack thereof—has an effect on economic development efforts.  “The first thing that companies do when they’re looking to relocate into an area is to look at what the workforce looks like,” says Hamm.  “So if New York’s economic developers are looking for companies to come here, we’ve got to demonstrate that we’ve got the workforce.  The skills shortage is all over the country.  If you can show you’re actually doing something about it, you’re on the good side of the equation.”

Read part three of the series here.

What is the STEM skills gap?

Part three of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

New York created close to 100,000 jobs between December 2015 and December 2016. Yet in many regions of the state the population is not growing.  (Population increases downstate and in the Capital Region/Hudson Valley, driven by the birth rate and immigration from foreign countries, are offset by upstate outmigration to other states.)  This means that employers who want to fill jobs are increasingly forced to select from the existing pool of potential workers. Nationally, the economy has added 11.6 million jobs since the recession bottomed out in 2010, and 99% of those have gone to workers with at least some college education, according to Anthony P. Carnevale and his team at Georgetown University’s Center on Education and the Workforce.  Since the recession hit in 2008, they found, there has been a net loss of 5.5 million jobs that required only a high school diploma.

STEM jobs, in particular, are growing at a faster rate than overall employment and require higher skill levels than do many jobs in retail, food service, and hospitality. Consistent with these trends, executives responding to a 2017 Public Policy Institute survey reported that health occupations and skilled production—both of which are STEM fields—are the categories in which they had the largest numbers of job openings in 2016.

As technology evolves, the skills that STEM employers seek are changing faster than our education system has traditionally been able to adapt to meet them.  Thus, the skills gap—a divide between the skills employers need and the skills workers possess—is a threat to New York’s competitiveness in the global economy.  Caught in the crunch, New York’s employers have taken the lead in investing in and partnering with education and training providers, in order to maximize the potential of workers in their own communities.

  • What kinds of institutions and programs are employers partnering with?
  • What do these partnerships look like in practice?
  • What are their main goals, and how successful are they?
  • What policy changes could make them even more successful?

Over the coming weeks, this blog series will describe how well-designed collaborative programs can take underperforming students, who might otherwise have dropped out of high school or required remedial classes in college, and get them back on track.  Working together, employers and educators are providing these students with the academic, technical, and professional skills and credentials they need to succeed in a STEM career.

Such programs are being replicated across New York State, but the funding needed to sustain them is not guaranteed, and they still serve only a fraction of the students and communities who could benefit.  If New York wants to maximize the economic future of its students and its businesses, creating model programs is not enough.  Policymakers, education leaders, and employers need to take the next step, using a data-driven approach to rethink and retool our entire education system with the goal of ensuring college- and career-readiness for all P-12 students, and completion of a degree or employer-recognized credential for all postsecondary students.  If it is willing to commit the necessary resources, New York has the opportunity to solidify its position as a leader—not just in designing and creating, but in scaling and sustaining innovative models that bring educators and employers together to meet the workforce needs of the 21st century.

Read part two of the series here.

The “Every Student Succeeds Act” offers New York a critical opportunity to focus K-12 accountability on college and career readiness

Part two of an ongoing series based on our recent PPI report: Bridging the STEM skills gap: Employer/educator collaboration in New York

The priorities of our K-12 education system are not always in sync with economic opportunities—an insight repeatedly noted by the employers and STEM experts who participated in the Public Policy Institute’s 2017 research on the skills gap.  Not only do our schools sometimes funnel students toward courses and credentials that lack value outside the academy, the education establishment may also (albeit unintentionally) perpetuate the stigma associated with career-oriented courses and programs.

Whereas business people are accustomed to designing products and processes to satisfy the needs and wants of particular customers, and success is measured by the bottom line, our education system is more complex.  It must prepare students not only for academic success, but also to be ready to join the workforce, shoulder the responsibilities of citizenship, and live well-adjusted, fulfilling lives as members of their community.  To help ensure that they are preparing students in all of these areas, schools have to look not only at whether students are getting through their classes.  They also need to look beyond themselves to see how their alumni are doing when they get to the next level, whether it be higher education or the workforce.

Bruce Hamm, Director of Business Engagement at the Manufacturers Association of Central New York, underlines this point: “The metric for high school success is graduation.  They’re not asking are they going to be successful in college, they’re saying, ‘Let’s get them out of high school.’”  The same problem applies to post-secondary institutions. “The colleges are asking, ‘Is our enrollment good enough?” and they’re getting some pressure now to graduate people, but it’s not enough,” says Hamm.  “The question colleges are not asking is, ‘Are these kids getting jobs?’”  In other words, what gets measured gets done.  Currently, Hamm says, “you have a set of metrics that almost ensure that all of this is in silos.  You need people that are able to cross boundaries and start meaningful conversations—people in education that understand industry, educators that are willing to talk to each other as well as to the business community.”

Recent changes in federal law provide the business community with an unprecedented opportunity to ensure that schools are held accountable based on outcomes that are important to student success in today’s economy.  The bipartisan federal law that replaces No Child Left Behind, known as the Every Student Succeeds Act (ESSA), gives states flexibility to craft their own systems to hold schools accountable for student outcomes —most importantly, whether students are graduating college- and career-ready.  Right now, state leaders are making big decisions about what it means to be a successful school, what rate of academic progress is acceptable, and what to do when schools are not meeting our expectations.  By itself, a well-designed school accountability system cannot solve New York’s skills gap, but these decisions have significant implications for our employers, workforce, and economic competitiveness.

So how can employers and the business community make our voices heard? With support from the U.S. Chamber of Commerce Foundation, The Public Policy Institute and The Business Council of New York State have convened an unprecedented coalition of civil rights, education, parent, and business organizations to advocate for a strong accountability system that promotes college and career readiness for all New York students.

To ensure that college and career readiness is the main driver of school performance ratings and improvement strategies, New York State’s accountability system must:

  • Maintain high academic standards;
  • Ensure that schools are rated primarily based on academic outcomes (supplemented by early-warning indicators) that are closely linked with students’ ultimate success in college and the workplace;
  • Include measures of college and career readiness, designed with input from the business community.

Would your business or chamber be willing to host or participate in a regional meeting or testify at a public hearing on ESSA? Click here.

Read part one of the series here.

My views on the skills gap

Guest Author: David William Davis

I became involved in workforce development out of necessity, with a little help from both near (my 80-year-old father) and far (across the Atlantic Ocean).

One night in 2007, shortly after I had joined Simmons as President and COO, I was working late and called my dad looking for a bit of sympathy. Woe is me, skilled employees are retiring right and left, I can’t find any machine tool assemblers, computer numeric controlled (CNC) machinists, on and on. You can picture my Dad if you think of Wilford Brimley—kind of gruff, but a heart of gold. He was a successful manufacturing entrepreneur in Detroit selling CNC machine systems to BMW, Toyota, Fiat, Ford, all the big auto companies. Allowing you to sit back and complain was not his style. He listened for a bit, then simply said, “So, what did you do today about fixing the problem?” Later that night I tried the same sympathy ploy with my wife and got much the same reaction—but she added that I should already know the solution, using lessons learned from her home country, Germany.

Across the USA there is a skills shortage spanning a wide range of industries for such jobs as lab technicians, machinists, industrial maintenance technicians, automotive technicians, plumbers, and electricians. We have reached a point where key manufacturing technologies cannot be deployed, due to a lack of people to program, operate, and maintain computerized industrial equipment. Most of these jobs do not require a four-year degree at an expensive university. A two-year associate degree will do just fine, and it makes an excellent stepping stone to further education at the bachelor’s level if the student so desires.

When I first joined Simmons, the management team performed a SWOT analysis (examining our Strengths, Weaknesses, Opportunities and Threats), and the top weakness we identified was a workforce shortage, accompanied by a high rate of expected retirements. Another top weakness had to do with the company’s bestselling product, a special machine that customers drive their locomotives onto to re-profile the wheels—a process critical to maintaining safe, efficient train operations. The consumable tooling for this machine is analogous to razor blades in that it provides frequent, repeat sales revenue. Rather than control this supply chain, however, our company had long ago subcontracted the consumable tooling work to other suppliers.

Our top opportunities were essentially the flipside of these weaknesses.  Like us, our customers were experiencing the ‘gray tsunami’ and were suffering from bottlenecks caused by a lack of talent to operate and maintain key equipment. The opportunity was to respond to our customers’ dilemma by offering more comprehensive maintenance services utilizing our own labor.  As for the ‘razor blades’ for the re-profiling machine, bringing this work back in house would not only improve profitability but would also restore our company’s control over the design/manufacture process, thereby enabling us to provide a higher quality product more cost-effectively. But manufacturing these cutter bodies and blades required 5-axis computer-controlled machinery that would need to be purchased, programmed, operated, and maintained. We barely had enough machinists to handle the current workload, let alone venture into even more labor-intensive and complex products and services.

How to establish and maintain a continuous supply of talent?  To find the answer, I looked to Simmons’ sister companies in Germany. There, a centuries-old system, sustained by uninterrupted government investment, provides education, vocational skills, and job opportunities for young people. German industrial firms of all sizes and in a variety of precision engineering/manufacturing industries—from automotive to medical devices, aerospace to manufacturing equipment—provide ‘dual track’ apprenticeship slots, whereby students take classes at the local Berufsschule (vocational school) while simultaneously working at the company. This starts in the equivalent of 10th grade and, depending on the program, runs for 3-4 years. Mature, dependable, and well-educated students graduate into a full-time position. This system, combined with a culture driven to produce high-value, high-quality goods, allowed Germany to create the workforce pipeline that we were lacking at our upstate New York facility.

Inspired by this model, we contacted Professor David Larkin at Hudson Valley Community College’s Advanced Manufacturing Technology program and told him about our need for qualified personnel to operate the state-of-the-art 5-axis CNC machinery. Together, we developed a corporate sponsorship program at HVCC that works like this:  Each year, Simmons pays two students’ tuition on a sliding scale from 50 to 100 percent, depending on academic performance.  We provide them with part-time employment during the semester, full-time employment in the summer between their first and second year, and, upon graduation, a full-time job with another two years of on-the-job training. Over the past decade, we have sponsored 20 students with tremendous success, creating a ‘virtuous circle’ where well-skilled employees are always pushing the envelope, making our products better and better.

HVCC is looking to double the size of its Advanced Manufacturing program, and the demand for similar partnerships is growing. New York State and the federal government should jump on this opportunity and do all they can to fund successful employer-education partnerships—not only in the Capital Region, but throughout New York and the entire nation. In America, we talk about how our people are our greatest asset, but great assets require investment and maintenance. Germany walks the talk. Investing in us, our human capital, is the only way we will grow this economy sustainably while ensuring a wider group of our citizens participate in its benefits. Warren Buffett, America’s most famous billionaire investor, once said, “Invest in as much of yourself as you can. You are your own biggest asset by far.” Seems like perfect advice for our policymakers.

David William Davis, today’s guest author, is the President and COO of Simmons Machine Tool Corporation. To learn more about David, and SMT, please visit their website: http://smtgroup.com/.