Miguel Lugo had his first experiences in the manufacturing industry when he worked for Voss Aerospace in Ohio City, where his mom also worked, for one summer in high school. After graduating from James F. Rhodes High School in Old Brooklyn in 2001, the 38-year-old briefly worked at Auto Zone before landing a job as an entry-level laborer at Talan Products Inc., a metal stamping company in Collinwood.
Sixteen years later, he’s risen the company ranks at Talan from a lowly general laborer to plant and tool room manager – and he’s not done rising yet. This fall, Lugo hopes to begin taking classes for his Master’s in Business Administration (MBA). Despite the perception that manufacturing jobs offer little opportunity for advancement, Lugo says he’s making a good living.
“Manufacturing has definitely changed,” he said. “People are making careers out of it.”
Among other things, Lugo is charged with recruiting and training fresh talent at Talan, a company that makes products for the commercial roofing, LED lighting, solar energy, and electric vehicle industries. Despite being a fast-growing company, they’re having a hard time finding workers for general laborer positions, and the Covid-19 pandemic is making it worse.
“We have permanent positions open right now,” he said during a recent plant tour, pointing to temp workers feeding roofing materials through a metal stamping machine and packing them into long cardboard tubes. “I could hire 15-20 people, easily.”
According to MAGNET, a nonprofit organization that works to grow Northeast Ohio’s manufacturing economy by helping small and mid-size manufacturers, there are some 8,000 open manufacturing jobs in Northeast Ohio. Many of them are entry-level positions, but companies are having a hard time filling them.
“I have major executives saying, ‘I’ve never seen it this bad,’” said Adam Snyder, sector partnership leader for Workforce Connect with MAGNET, a workforce development partnership. “These are people who have been in the manufacturing sector for decades. Manufacturing used to have a shortage of skilled labor. To have a shortage of entry-level labor is a newer problem.”
Although Ohio’s unemployment rate has dropped to 4.7%, the numbers can be deceiving — the US labor force participation rate was 63.3% in February 2020, dipped to 60.2% in April of last year, and is now back up to 61.5% as of March 2021. According to Snyder, about half a million people are not participating in the workforce who were a year ago, and that’s one of the reasons companies are so pinched.
One challenge is that many companies had to switch their shifts around during COVID-19 to comply with social distancing restrictions, reducing flexibility. Child care is also an issue for many workers, as many daycares closed during the pandemic and some are still operating at reduced capacity. Finally, people are afraid of getting COVID, and relatively generous relief funding is making it easier to delay returning to work.
Snyder said federal unemployment benefits are creating a kind of “balloon” that is temporarily keeping some entry-level workers out of the workforce. “The attitude is, ‘I’m OK right now, and will be for a couple of months,” he said. “That’s why we’re talking to people about getting into the workforce pipeline now, so that they can take advantage of opportunities.”
According to a National Public Radio story from May 2020, “Economists at the University of Chicago estimate that more than two-thirds of the workers on unemployment insurance are making more in jobless benefits than they did at work — in some cases two to three times as much. It’s a stark reminder of just how low the pay is in many hard-hit industries such as restaurants and retail.”
Of the people working in manufacturing in Northeast Ohio, only six percent are under the age of 25, while 30 percent are over the age of 55, said Snyder. To recruit them during the pandemic, companies are trying new strategies. For example, Talan has a generous referral program offering incentives of $500, $1,000 or more when employees refer friends who get hired. The company is also planning to use social media recruiting to reach diverse audiences of young adults about opportunities.
Young people who haven’t grown up with manufacturing may not be aware of potential growth opportunities, Lugo said. For example, workers at Talan start at $13.50 per hour but can move up through the company’s training programs. Workers can also get health care and other benefits after a probationary period. Yet company leaders know that if they can get employees through the door, they have a good chance of convincing them to stay.
According to the Massachusetts Institute of Technology (MIT) living wage calculator, a living wage in Ohio for one person without a child is $13.16 per hour. For one person with one child in a two-earner family it is $15.66 per hour, and for one person with one child it is $28.58 per hour.
“We have a good employee retention rate, because we focus on taking key players and top performers and helping them move to a different department,” said Pete Accordi, president of Talan. “We focus on the entry level, because that’s where you plant the seeds to expand the ecosystem. That’s where there’s a disproportionate need.”
Recruiting young adults
One initiative that seems to be working on a small scale is the ACCESS program, a workforce readiness initiative from MAGNET that helps returning citizens and young adults find jobs in the manufacturing sector. The program has graduated 52 people since launching last year, and the recent spring cohort graduated 15 returning citizens and five young adults. There are plans to further expand the program next year.
“ACCESS is a bright spot, but we’re not going to solve the manufacturing skills gap with ACCESS alone,” said Snyder.
Accordi said that Talan has already hired three ACCESS graduates during the Covid-19 pandemic. The company has maintained full employment over the past 12 months, despite the roiling economy and ups-and-downs with the supply chain. Talan occupies 150,000 square feet in the former TRW valve plant in Collinwood and plans to soon add another 80,000-100,000 square feet.
Ken Patsey, CEO of Manufacturing Works, a nonprofit that educates and connects manufacturing companies to help them grow and prosper, said that to be successful, manufacturers must address the barriers keeping young adults out of the workforce, such as transportation. Manufacturing Works has partnered with the Cleveland Clergy Coalition to hire deacons to drive workers from Cleveland neighborhoods to suburban manufacturers in church vans. Additionally, he said, manufacturers that offer good training programs are more likely to retain workers over the long term.
“What manufacturers sell is a career pathway,” he said. “Amazon can’t say that. In 15-20 years, you’ll still be putting boxes on a conveyer belt making $15-17 per hour. In manufacturing, you have a lot of opportunities to move up.”
Lugo is glad that he’s found a job that allows him to support his two daughters and spend time with them in the evenings. “The opportunity is greater now than it was when I started,” he said. “When I started, there were more leaders with technical skills, so they weren’t backfilling. Now, there’s more opportunity to grow.”
MAGNET is an underwriter of The Land, supporting coverage of workforce development in manufacturing.
Lee Chilcote is a freelance writer and editor of The Land.