In a tight labor market, placing value on your production workers makes good business sense.

Unemployment rates go up, and unemployment rates go down. In recent years, though, through good times and bad, there has been a growing lament: No matter what the overall employment situation, good shop-floor workers are increasingly hard to find-and keep.

To remain viable in an increasingly competitive and technological age, the shop floor is becoming increasingly technical as well. This means having workers who can understand and operate sophisticated equipment, workers whose jobs are anything but mindless. True, there will also be a place for less-challenging repetitive tasks. But even then, it's those entry-level people who provide the skilled workers of the future. And the future is now. Study after study has shown that a high percentage of the leaders in manufacturing are reaching the end of their careers. Today, the average age for machinists in the United States is over 50. The $64,000 question: Who will take over for these workers when they retire?

"Throughout the 1990s there was a growing sense of a skills deficit," says Cliff Waldman, an economist for the public policy and research firm Manufacturers Alliance-MAPI (Arlington, VA). "Part of the tightness was the result of the low unemployment rate. But it was more than just that."

Clearly, in addition to U.S. manufacturers' concerns regarding healthcare costs, litigation and wages, they can now add a shortage of skilled workers.

A Bad Rap

Unfortunately, the problem is in many ways deep-set in the American psyche. It's a common refrain that the U.S. educational system is to blame for the lack of skilled applicants responding to manufacturers' help-wanted ads. But in fact, another major reason for the shortage is that the workers who do have the requisite skills are opting out of manufacturing and going into the service or financial sectors.

High-school and college graduates entering the workforce see manufacturing as dirty and boring. At the college level, they would rather work at, say, an insurance company or financial services firm, than for what they perceive as some smelly old electronics manufacturer. At the high school level, workers would rather drive a truck or repair copy machines than be tied to an assembly line.

Beyond that, potential workers see manufacturing as being a dead-end occupation, as opposed to a promising career track. Shop floor workers are regarded as expendable cogs in a machine, vulnerable to layoffs and with no hope of advancement.

Finally, there is the inflexibility of manufacturing and assembly line work. In contrast to more service-oriented positions, say, as a hairdresser, factory work is dominated by the shift system. That leaves little room for coming in late because your daughter is sick with the flu.

Positive Steps

To overcome these prejudices, manufacturers, both individually and as a group, have to do away with the perception that theirs is a road to nowhere. This can be done a number of different ways, including job training and inclusion in the process by which management directs the company. Oddly enough, money alone is not the solution. In fact, it often comes in second or even third in terms of employees' reasons for leaving a position. Far more important is an employee's view of his or her role in the company. A worker who feels valued is far more likely to both join and stay with a company for the long haul.

"Remember, we're spending a lot of time at work. It's kind of a lifestyle thing," says Waldman. "Certainly wages matter, but that doesn't mean you have to double them. As much as anything, you have to create a corporate culture conducive to growth."

"According to research, money will catch up with you eventually, but it is not the only thing," agrees Phyllis Eisen, executive director for the Center for Workforce Success and vice president of the Manufacturing Institute, an affiliate of the National Association of Manufacturers (NAM, Washington). "The No. 1 reason [for employees] to stay is increased responsibility and increased value of themselves as part of a team."

With this in mind, many recruiters and managers consider the single most valuable tool for employee retention to be training, both on- and off site-and not just task-specific training. With today's increasingly complicated assembly and manufacturing processes, companies need workers who can think, as well as run a lathe.

"Math skills, cognitive thinking, creative thinking-all these have been cited as issues," says Waldman. "More and more these will be treasured, things that are innate."

Eisen agrees, noting that the specific nature of the training or education is not half so important as the simple fact that the employer is making the effort. "Research has shown it's a huge retention tool," she says. "It shows employees they are valued in the eyes of the company."

Of course, the immediate response on the part of many manufacturers is that they end up losing money when they educate workers only to have them take those skills someplace else. Professionals in the field, however, say that while this is a danger, implementing a training program as part of an overall corporate culture that values employees can cut this kind of "betrayal" to a minimum.

Reed R. Shawcroft, training manager at Automatic Feed Co. (Napoleon, OH), for example, acknowledges that providing employees with skills can be a "double-edged sword." But he adds that by providing a challenging and rewarding work environment, employees will stay, ensuring the company reaps the benefits of its investment in education. In the case of Automatic Feed, which manufactures steel-coil handling and press feeding systems, over half the company's workforce is made up of skilled tradespeople, including certified welders and CNC machine operators-workers with highly portable skills that take years to develop. Yet turnover is less than 1 percent per year.

At welding equipment manufacturer Lincoln Electric (Cleveland), the situation is similar. The company provides training that in many cases could be easily taken to another firm. But a well-established corporate culture that values employees for hard work and initiative keeps them from jumping ship.

"You don't address [employee retention] with one particular thing," says Lincoln Electric vice president of human resources Gretchen A. Farrell. "It's a lot of things working together. There's no silver bullet."

Even in those cases where job training represents the bulk of a company's worker retention efforts, there's no reason that creating smarter workers has to result in their running off to greener pastures. Again, the simple fact that an employer is investing in its workforce makes it a more desirable place to work. Employers can also target their employee training so that the skills learned will be of immediate use on the shop floor.

"Structure the program so it's unique to your company. Make it so that your company becomes an attractive place to use those skills," Waldman says of a well-designed training policy.

Along these same lines, Eisen says managers need to put some thought into the kind of training they want to offer their employees instead of just sending "everybody out to the same computer class."

She recommends that employers first assess their employees to identify gaps in skills and knowledge using tests like WorkKeys, created by the American College Testing Program (ACT Inc., Iowa City, IA). They can then focus on the exact kind of training their employees need with the help of organizations like the American Association of Community Colleges (Washington), the U.S. Department of Commerce's Manufacturing Extension Partnership (administered by National Institute of Standards and Technology, Gaithersburg, MD) or Eisen's own Center for Workforce Success.

According to Eisen, hundreds of organizations offer services complementing the traditional in-house, on-the-job education that still constitutes the majority of training most workers receive. She points out that there are more than 1,250 community colleges in the United States, and about half include business and industry centers that cater to workforce development.

Countless equipment manufacturers also offer training on a wide range of manufacturing technologies. Lincoln Electric, for example, has its own welding school. Robotics companies, machine-vision companies and even tool supply companies like AIMCO Corp. (Portland, OR) often have permanent training facilities to help workers make better use of their products. Then there are organizations like Tooling University (Cleveland), which offers classroom and online instruction on everything from welding to lean manufacturing techniques.

For those who still aren't convinced that training is the way to go, that it represents an unacceptable "cost" as opposed to an "investment," Eisen offers this warning: "The only alternative is untrained employees, and that's not an alternative, not in this day of global competition. Everybody has the same technology. The only thing that is going to separate us is our processes and our smart employees."

In The Know

Beyond training, there are few things that make people want to work for a company more than being made to feel they are part of a team. And one of the best ways to do this is keep them informed of the reasons for the decisions being made by management. Better still, give workers an opportunity to assume greater responsibility for their particular jobs and provide input as to how the company is being run.

At Lincoln Electric, for example, there is an "open door" policy whereby shop-floor workers have access to the head of the company in the event they have suggestions for increasing productivity. If a suggestion is adopted, the employee receives points that increase the size of his or her annual bonus.

Similarly, at Mine Safety Appliances Co. (MSA, Pittsburgh), which manufactures a range of safety equipment including everything from fire helmets to body armor, employees are kept abreast of how the company is doing through newsletters and town-hall meetings where they can question upper management.

Farrell cautions that any efforts at company transparency need to be genuine, and that production workers' concerns need to be taken seriously. "Senior management needs to be committed. There needs to be buy-in from top to bottom," she warns. But the benefits, if the program is for real, can make for a much more committed and stable workforce.

In addition, manufacturers can dispel the impression that a career in manufacturing is a precarious one by making a commitment to protecting workers' positions in good times, and bad.

Lincoln Electric, for example, has an explicit policy whereby it will lay off no employee as a result of a downturn in business. Of course, there's no such thing as a free lunch. Employees have to be willing to shift around during slow times or accommodate their work schedules to the business climate. But the bottom line is that since 1948 no worker has been left out in the cold because of a downturn in the economy.

Similarly, MSA makes a concerted effort to avoid layoffs, a policy that Teresa Nelson, the company's manager of corporate-employee relations, says plays a key role in the company's low turnover.

Finally, there is pride of product. According to Nelson, workers at MSA are fully aware of what their products do and the role they play in everything from firefighting to national defense. In fact, part of her effort to keep a finger on the pulse of the company includes measuring "organizational pride" to see how workers at all levels feel about the job they are doing.

Granted, when it comes to exciting products, it's hard to compete with a company that's making Kevlar helmets for U.S. forces in Iraq. But that doesn't mean every manufacturer and its employees can't take pride in what they do and their contributions to society.

"I would think that every company has something compelling in its mission that would appeal to employees," Nelson says.

If there is one dark cloud in the recruitment and retention picture, it is the inflexible nature of assembly and other production work. Given the shift system and the fact that workers on an assembly line simply can't come and go as they please, it's a challenge for any manufacturer to provide a flexible schedule for its production workers.

Still, that's no reason to throw in the towel. Good pay-especially in the more skilled positions-the opportunity for career development, pride in product and job security will go a long way toward taking the sting out of having to punch in for work at the same time each day.