WoodDigest.com |

“People are our most important asset.” This assertion is generously sprinkled, with the sincerest of intentions, throughout countless mission statements, company values proudly displayed on wall plaques in our lobbies, and interviews with executives and owners. But let’s be honest here: The best of intentions, although necessary, usually fall short of meeting either the needs of the business or the expectations of our people. Developing our people is more than paying lip service to the idea; but is more a matter of making the investment in educating our employees.

While the supply of skilled workers is consistently seen by wood products manufacturers as one of their leading business concerns, the industry continues to struggle unsuccessfully with the issue. According to research conducted by the National Association of Manufacturers, “today’s skill shortages are extremely broad and deep, cutting across industry sectors and impacting more than 80 percent of companies surveyed.” (1)

AN INDUSTRY RECEDING

Furthermore, the continuing declines in industry employment, as well as the number of companies, would suggest that there should be an adequate supply of workers. Consider for instance, that within the two sectors, Furniture and Related Products, and Wood Products Manufacturing, as tracked by the U.S. Census Bureau, industry employment declined by 327,000 workers, or 25 percent of the total employment between July of 1998 and July of 2008. Additionally, the industry lost 3,740 companies during that same period.

One could assume that at least some of these 300,000 workers, both blue and white collar, would have been available for re-employment within the industry. If finding and retaining skilled employees is still a principal challenge, it would appear then that workers have indeed left the industry.

One reason for this departure might be that in both segments, again according to U.S. Census records, annual payroll per employee averages under $30,000 per year. This compares with an average of $39,591 compared to all other manufacturing segments. Add to this the rising burden of the employee portion of shared health insurance costs, or in some cases, no health insurance at all, and industry workers are forced to look elsewhere for a better opportunity.

ANEMIC PRODUCTIVITY

Indeed, the issue of limited opportunity for workers and employees alike is apt to be a deeper symptom of the continuing contraction of the woodworking industry. Consider for a moment that the average value of shipments (a measure of productivity) per employee for all manufacturing segments combined is $266,412 compared to $127,476 and $164,800 respectively for the Furniture and Related Products, and Wood Products Manufacturing sectors.

On average, the wood industry is lagging the average revenue generation per employee of all manufacturing by 45 percent. It is a sad fact that compared to all other manufacturing businesses, woodworking companies rank dead last in revenue generation per employee. And this poor productivity is a the symptom of the root cause: an undereducated workforce.

That the woodworking industry ranks last among manufacturers in productivity is a testament to our own lack of skills not only on the factory floor, but in the front office as well. In an industry that is becoming increasingly dependent on technology, we employ fewer graduate engineers as a percent of total employment.

According to the National Science Foundation, there are approximately 1.26 million graduate engineers employed in all manufacturing segments, or about 9.4 percent of the total manufacturing employment (which is now 13.4 million and approximately 500,000 less than in 1950). By comparison, the U.S. wood industry employed only 6,000 engineers, or less than ½ of 1 percent (.461 percent) of its total employment.

Is it any wonder we have difficulty implementing software systems, sustaining lean or achieving optimal utilization of our capital equipment? Is it any wonder that we rank dead last in productivity?

Add to this the fact that today only 70 percent of those students entering high school will graduate, this according to a 2006 study by the Alliance for Excellent Education. For our industry, this means that we have prospective employees coming to us with increasingly lower math and reading skill levels.

As we place these workers in factories with poorly designed processes and work flow, we further jeopardize productivity and quality. We spend more time teaching tasks, replacing and reteaching workers — all the while watching our profitability shrink. The Alliance for Excellent Education estimates that the cost of not educating our kids in high school is about $3.7 billion, including $1.4 billion in remediation expense and $2.3 billion in economic losses.