The Business of Skills Certification

 View industry certifications as a tool to help enhance college/business partnerships  How to talk to employers about the benefits of skills certifications  How to help employers calculate the cost of the skills gap to their bottom line  How to help employers calculate Return on Investment (ROI) for industry certifications  Review various tools available to support implementation OBJECTIVES

wiifm? You? Institution? Student? Employer? REMEMBER: DIFFERENT PERSPECTIVES

 Pick a word  Develop an operational definition  Give an example of how this term relates to your work with employer partners LET’S SPEAK THE SAME LANGUAGE!

Business Terms  Cycle-time  Downtime  Overtime  Productivity  Profit  Return on Investment (ROI) Academic Terms  Certificate  Credential  Certification IMPORTANT WORDS TO KNOW

The Problem

 U.S. Manufacturers face a 20% cost burden over competitors from our largest trading partners.  Corporate tax rates make up over half that burden as other countries have reduced rates. STRUCTURAL COST OF MANUFACTURING U.S.CanadaMexicoJapanChinaGermanyU.K.KoreaTaiwanFrance %44%34%51%33%57%31%30%25%36% %31%30%40%25%29%28%24%17%33%

MANUFACTURING JOBS REQUIRE HIGHER SKILLS 8

Changing nature of work Skills gap is widening Poor work readiness skills Targeted occupations are hard to fill Shrinking number of HS graduates Career training/apprenticeships have declined Retiring workers are increasing Current workers struggle with new technology Manufacturing not a career of choice Talent is global WORKFORCE PIPELINE CHALLENGES

12% increase in overtime + 8% increase in cycletime + 10% increase in downtime COSTING US 11% OF POTENTIAL EARNINGS

 High-skilled, flexible workforce – 68% (Talent)  New product innovation – 48% (Innovation)  Increased market share – 38% (Productivity) “Boiling point? The Skills Gap in U.S. Manufacturing,” Deloitte & Manufacturing Institute, 2011 TOP 3 DRIVERS OF FUTURE SUCCESS:

The Solution

SUCCESS POLICYQUALITYIMAGE

GOAL 1: CHANGE THE PERCEPTION OF CAREERS IN MANUFACTURING Image

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GOAL 2: RE-ESTABLISH THE U.S. AS THE GLOBAL LEADER OF MANUFACTURING EDUCATION Quality

We are developing quality education through

ADVANCED MANUFACTURING COMPETENCY MODEL Career Paths – Life Long Learning Ready for Work, Ready for College Entry Level Industry Certifications Occupation-Specific Certifications High Quality Middle Class Jobs

Core Workplace Skills Innovation/ Creativity Critical Thinking/ Problem Solving Communications Information Technology Application Teamwork/ CollaborationHigh Performance/LeanSustainability Applied Academics/ Personal Management Applied math Reading for Information and Locating Information Applied ScienceAbility to learnAgilityComfortable with ideasSelf direction/organizationEntrepreneurship Cross Cutting Technical Skills Process Design and Development Production Maintenance, Installation and Repair Supply Chain Logistics Quality Assurance and Continuous Improvement Health, Safety and the Environment Sustainability and Green Manufacturing 19

THE SCS ALIGNS SYSTEMS

GOAL 3: ADVOCATE FOR EDUCATION AND JOB TRAINING POLICIES THAT STRENGTHEN THE U.S. MANUFACTURING WORKFORCE Policy

MAKE YOUR VOICE HEARD

THE COST OF THE SKILLS GAP

 Scenario: You’ve been asked to speak in front of the local manufacturing consortium at its upcoming monthly meeting. They usually draw around owners and HR or Production Managers from a variety of small to medium manufacturing companies in your area. You’d like to demonstrate to them that you understand their workforce challenges and begin to lay the foundation for some partnerships that could facilitate bringing more talent to these companies.  What 3-4 points would you make about the skills gap and the cost of open positions to firms? Use business terms! SHOW THEM YOU UNDERSTAND

VALUE OF CREDENTIALS

 Over 90% of companies that use industry- recognized certifications believe they make a difference in validating the skills of their employees;  Community colleges are the most used partner by companies looking to incorporate certifications. VALUE OF CREDENTIALS

 Companies see positive impact on:  Improving hiring practices  Taking the guesswork out of selection and promotion  Improving the bottom line  Companies see measurable results in:  More job-ready candidates  Shorter training/OJT time  Improved safety and quality  Reduced turnover  Better promotional decisions DOCUMENTED VALUE OF CREDENTIALS

In the past three years, SCS reported over 290,000 industry certifications

Employers  Prefer certifications and ask education partners to deliver certified students  Provide internships and apprenticeship opportunities Educators  Align manufacturing programs with certifications and certify students  Support faculty development, including certifying instructors Community Leaders  Promote certification as an economic development tool  Strengthen connections among employers, educators and the workforce system WHAT CAN YOU DO?

The business case and return on investment perspective is simply this: A highly skilled and educated workforce with skills measured and validated by industry standards o reduces risk o drives innovation and o supports competitive advantage 30 THE BUSINESS CASE

 ThyssenKrupp Bilstein – CPT  Reduced turnover from 50% to 7%  Increased overall equipment effectiveness  Sun Hydraulics – CPT  Higher levels of engagement in audits & CQI  Improved efficiency  Permac Industries – NIMS  Accelerated learning  Stronger applicant pipeline 31 SUCCESS STORIES

“I advise each of my staff that every worker hired is a million-dollar investment for this company. I’m calculating that most hires are under 45 years old; we intend to keep them for at least 20 years, and our average annual salary/benefits package is $55,000. In other words, we can’t afford to make a mistake—to hire someone without the right skills. Verifiable skills certification programs can make the difference between a good investment and a high-risk.” Dennis Rohrs, Human Resource Manager Fort Wayne Metals, Inc. 32 A MILLION-DOLLAR INVESTMENT

RETURN ON INVESTMENT

TOOLS AND RESOURCES

 Scenario: Your networking is paying off. The VP of manufacturing for a large plant wants to meet with you to discuss whether workforce certification would work to close the skills gap they are finding in the local labor pool. He’s skeptical about the time/cost to implement such a program. “I’d need to provide solid evidence that this will work. I’ll have to build a business case for this – something that can stand-up to my boss’s scrutiny.”  Help your business partner make the case to his boss. What ammunition/evidence can you provide to convince him to give industry certifications a try? SEAL THE DEAL