Will Gen Z Solve the Skills Gap Problem?

You’ve been hearing about it for a decade or more. The skills gap is coming. The skills gap is here. The skills gap will be the death knell for U.S. industry.

But what do we know about this ominous yet elusive term? Is it that today’s workforce merely lacks the core skills needed to work on the floor, or is there something fundamentally different about today’s workers, something that’s steering them away from careers in the metals industry altogether? Of course, most of you reading this already know that the answer to both these questions is a resounding “yes.”

For those unfamiliar with term, here’s the CliffsNotes version of the skills gap problem. Between 2018 and 2028, an estimated 2.4 million manufacturing jobs could go unfilled in the U.S. due to a lack of qualified and motivated workers. According to Deloitte and the Manufacturing Institute’s “Skills gap and future of work study,” this widening gap between the available talent pool and the types of jobs that need to be filled could have a potential economic impact of $2.5 trillion over the next decade.

The problem, compounded by the fact that Baby Boomers are in the process of retiring from the workforce, underscores an apparent lack of commitment by subsequent generations to roll up their sleeves and do the hard work often associated with manufacturing and metal distribution.

“I think some of the major challenges are the challenges that every company in the larger manufacturing industry faces, not just in the metal service center industry,” says Amanda Middendorf, training and development manager at Kloeckner Metals, Roswell, Ga. The No. 1 challenge for all companies, according to Middendorf, is identifying new talent to come in and work on the plant floor. “We used to have a clear pool of recruits for traditional operations positions, but it’s no longer a career path that new high school or technical school or college graduates want to immediately dive into.”

Reaching young potential employees and convincing them that work in the metals industry is a viable career alternative is among the highest priorities for companies struggling to keep pace with changing workforce demographics.

And while Millennials are slowly starting to fill the ranks, employers are now having to cope with the introduction of an even younger and more technologically inclined generation of potential employees. Gen Z, which consists of individuals born in the late 90s and onward, is beginning to enter the workforce, bringing with it a potential solution to the skills gap problem but also a whole new set of challenges and expectations employers must contend with.

ABCs of XYZs

Chances are you or someone in your HR department has thought long and hard about how to attract that most fickle of generations into your organization – Millennials. You learned how to email, set up Facebook and Twitter accounts, and even instituted flexible schedules to try to lure Gen Y to your company. You built it, but they didn’t come, at least not in the numbers you hoped they would.

Sara Bondy is one Millennial who bucks this trend. The 25-year-old mechanical engineer works at Oklahoma City, Okla.-based Aerobraze Engineered Technologies, which manufactures engineered components for the aerospace, defense, energy and transportation industries. However, she has noticed that her peers, as well as younger employees, don’t seem to share her passion for the job.

“We can get workers fairly often, but the younger people tend not to stay as long as the older people, who have been doing this a while and are really dedicated to it.” she says. “I have hope that Gen Z will really be attracted to the manufacturing industry, but right now it seems like Millennials are not really dedicated to it.”

Despite Millennials’ (and Gen X’s) seeming lack of interest in working in the industrial economy, there is hope on the horizon with Gen Z, according to the experts. Economist Chris Kuehl, managing director at Armada Corporate Intelligence, says the next major challenge for manufacturers and metal service centers is going to be finding enough qualified workers in this next generation workforce to pick up the slack for the retiring Baby Boomer generation.

“In the next five to 10 years, we will be definitely transitioning demographic groups,” says Kuehl. “The Boomers will have mostly left the scene, the senior people are going to be Gen Xers, we’ll have Millennials thoroughly in the workforce, and we’ll be dealing with the latest generation, which is Gen Z. By all accounts, Gen Z has been a more serious generation. Teachers are reporting on this, parents are reporting on this… This may be the best recruitable population we’ve had in a while.”

Generations expert and best-selling author David Stillman, who, along with his son, Jonah, spoke about changing workforce demographics at FABTECH 2018, argues that Gen Z are statistically similar to Baby Boomers in their approach to work. This is apparent in their mentality and work ethic.

“Their approach to work is really about performance and money and drive and getting ahead, almost like a Baby Boomer,” he says. According to Stillman, this mentality is shaped by the world Gen Z came of age in – a world overshadowed by financial crisis. These macroeconomic conditions, combined with other factors, such as access to technology and digital communication, have given Gen Z a work ethic much different from their Millennial counterparts.

“Millennials wanted to know how everything they’re doing fits into the bigger picture,” Stillman says. “It really was about finding passion and meaning to pull them in and to keep them engaged. For Gen Z, it’s not really about that. They moved over from meaning and passion and collaboration to a lot more drive and competition and even independence.”

These traits should make Gen Z more open to careers in the metals industry, which Rosemary Coates, executive director at the Reshoring Institute, says are evolving right alongside the workforce. “This is not your grandfather’s manufacturing,” she says. “Manufacturing is not a dirty smelly occupation. It’s high tech and it’s clean.”

The new generation of workers will need traditional manufacturing skills, combined with new collar technological skills to perform functions that are becoming transformed by technology. “I’m really excited about that because technology is changing the face of manufacturing,” says Lee Ann Cochran, vice president of sales and marketing at PRADCO – a Chagrin Falls, Ohio-based talent assessment, development and management company. “Manufacturing is evolving in a very positive way, and I think Gen Z can help lead that way.”

Stillman agrees, adding that Gen Z already has the technological know-how required for these new jobs, and they’re willing to learn everything else from veteran employees. “I’m actually finding that Baby Boomers and Gen Z are a great match,” he says. “Baby Boomers, make yourselves accessible to Gen Z. They want to learn from your experience.”

Training Matters

Kloeckner Metals is one company that understands the potential negative impact of the skills gap, and it is doing everything it can now to attract and retain the next generation of workers. The metal service center giant believes training and development are key to that effort.

“I think we understand at Kloeckner that our workforce is changing, our talent pool is changing, there is a real labor skills gap, there are generational differences, and if we are going to continue to maintain the level of success that we’ve had, and to grow in the future, training has to be a bigger focus for the company,” says Middendorf.

Middendorf, whose position was created earlier this year as part of a plan to grow the company’s training opportunities, says she was tasked with expanding Kloeckner’s efforts to include professional and training development programs to attract future employees. According to Middendorf, training is not only important to attract younger workers, who may not have the traditional skills necessary to do the job, but also to show those individuals entering the workforce that there is a clear path to advancement.

“Our program has to be training people on core skills that they need to do their job but also preparing them for positions they may hold in the future,” she says. “I think a big issue for new generation folks entering the workforce is being able to find a position with a company where there is a career path and there’s a future for them.”

At Kloeckner, this program includes a mix of classroom, online and on-the-job training on things like safety, job skills and professional development. This mix of training approaches is important, according to Middendorf, because every employee learns differently. This fact is compounded by a generational milieu, which could include Millennials or Gen Z being trained alongside Gen X and Baby Boomers.

“Every adult learner, whether they are the new generation or a generation that’s been in the workforce for some time, doesn’t learn simply by sitting in the classroom and taking notes,” Middendorf says. “For us, it’s a combination of classroom opportunities for folks that learn that way and also applied on-the-job learning.”

And for the digitally savvy new generation of workers, Kloeckner is now developing and implementing online learning options. “We use online training and an e-learning catalogue to be able to reach that group of folks as well,” she says.

Like the workforce, jobs have also changed with the times. These new-collar jobs will require a whole new set of skills that will need to be taught, regardless of an employee’s generational background.

“The manufacturing environment has evolved and the skills to run manufacturing have evolved,” says Coates, adding that these new jobs require a combination of engineering and assembly know-how. “Those skills have got to be taught. You can’t just take an unskilled worker and say, ‘Now, go do manufacturing.’ There are new collar skills that are required.”

Kuehl says, the incoming and existing workforce need substantial training, which will take time and money.

“When we talk about training, it’s not like we can start the training program tomorrow and generate 50,000 workers ready to do the job,” he says. “We’re talking about getting kids in middle school and high school and convincing them that manufacturing is a legitimate way to make a living. It’s going to take time for them to matriculate through the system.”

Multi-Generational Approach

Despite their apparent interest, there’s no guarantee Gen Z will automatically flock to careers in industrial fields, which is why employers still need to worry about attracting and retaining new, young workers, whether Gen X, Millennial or Gen Z. And just like their potential hires, employers will need to learn a few core skills if they’re going to recruit enough new workers to fill the skills gap.

Among the most important lessons employers must learn are that generational differences exist, and they must take them into account on everything from training and development to simple communication.

“Going into this new world, it’s going to be incredibly important that leaders in these organizations understand those differences really intuitively, so they can interact with these new generations,” says Jacob Wilson, CEO of Morrison Industries, a Lebanon, Tenn.

Millennials and Gen Z are likely to have innovative ideas that could benefit a potential employer who listens. But when these groups come into a company that isn’t open to their input, they’ll move on to another company and could ultimately decide the metals industry is not for them. “It’s really important that manufacturing companies are open to what those guys have to say, or we could lose them,” Wilson says.

Ultimately, it comes down to interpersonal communication, according to Cochran. “Whether it’s a Millennial that is supervising a Gen Z or it’s a Gen Zer working with a Millennial, or even an Xer or Baby Boomer, what we have to do is learn how to communicate,” she says. “We have to figure out what form of communication works best, and then we also have to work together in order to fit the right form of communication for the feedback or discussion you’re having.”

This means incorporating text messaging and social media, along with traditional forms of communication, when engaging with employees. However, it also means making sure you’re not using the wrong form of communication.

“Sometimes it takes a little coaching in order to articulate to any employee that text messaging is not how you want to be giving feedback,” she says. “Think about communication, think about the goal of the message you have, and if it requires interaction, think about the best type of interaction.”

And managers, that doesn’t mean face to face is always the best option. “Just because it is a heavy topic and you want to have a two-way conversation doesn’t mean it has to be in person,” Cochran explains. “There are digital tools that allow for that and allow for real-time feedback, which is really important with Gen Z. You can’t wait a week or a month or for an annual performance review to give feedback. They’re going to want to know much sooner.”

Gen Z may be the generation that embraces manufacturing and fills the skills gap, but it will take some time for this outcome to be realized. Meanwhile, employers may have no other option than to continue embracing Millennial values if they’re to attract enough young workers to stem the tide.

The only other option to fill crucial openings quickly, according to Kuehl, is not only unpopular, it’s also inflationary. “Unfortunately, the practical advice is to poach,” he says. “You’re going to have to hire other people’s people. Right now, that’s what a lot of manufacturers are doing. It’s a great way to make enemies, when you start going after other people’s workforce, but in the short term, that may be the only real solution.”