Seven Take-Aways from HI’s Workforce Opportunities Workshop

One of the best-attended sessions at Hydraulic Institute’s Annual Conference in Orlando was “Opportunities in Workforce Development.” That should come as no surprise. Like other businesses, purveyors of pumping and hydraulic systems are struggling to find and retain employees.

Speakers at the session included Bradley Hunt, chief employee engagement officer, Pape Dawson; Sheila Mitchell, training specialist, Flowserve; Randy Stevens, business manager, ABB University; and Greg Meineke, vice president of sales, Cahaba Media (the publisher of Pumps & Systems).

Their news was both sobering and hopeful. Worker shortages are not going away, they said. Yet, both large and small employers have many ways to manage the labor market. Here are seven takeaways from their presentations:

Demographics are driving labor shortages. Remember the Baby Boom? It lasted from 1946 through 1964, when more than 76 million children were born. They swelled the ranks of U.S. consumers and and drove the jobs market for decades. Today, the youngest are 58 years old and fast approaching retirement.

Replacing those workers will be a challenge. To understand why, consider total fertility, the number of children a woman is expected to have over her lifetime. During the Baby Boom, it averaged close to 3.5. For Gen X, born between 1965 and 1980 (now 42-57 years old), this fell to 2.23. Gen Y, the Millennials born between 1981 and 2000 (now 21-41), fell to 1.94—below zero population growth.

In terms of workers, this created a distribution that looks like a suspension bridge: high during the Baby Boom, drooping during Gen X, and rising again for the Millennials (their parents, mostly Baby Boomers, had a low fertility rate but there were a lot of them). As a result, there are simply not enough Millennials to offset the lack of Gen X workers and retiring Baby Boomers. As a result, the relative scarcity of Millennials is driving the jobs market today the way the abundance of Baby Boomers did over the past 60 years.

The tight labor market has shaped Millennials’ views about work. Labor shortages have become a persistent problem in hot state economies and fields ranging from medicine, IT, and engineering to welding, plumbing, and truck driving. In fact, other than the short-lived Covid business shutdowns, most Millennials have rarely seen a soft job market in any high-demand profession.

They also have lots of options to switch careers. Want to drive a truck? There’s a course for that. Become a registered nurse? Go to college at night. A banker? Financial firms will train the right candidates. No wonder Millennials are not shy about making demands on potential employers. They don’t have to settle when they can so easily switch jobs or even careers. Their relative scarcity also make it easier for Gen X employees, who are more likely to have settled into careers, homes, and family obligations, to do the same.

Keep in mind, when the pump industry tries to recruit employees, you are contending not only against your competitors but against all these other industries as well.

We need to understand why employees switch jobs. Larger companies that conduct exit interviews often ask workers why they are leaving. The answers include the usual suspects like promotions, flexible hours, better pay, and healthcare. The Gallup Poll, however, asked a better question, “Why did you start looking for a new job in the first place?” The answers were not what you might expect.

The number one reason people change jobs is their boss. As Gallup put it, people don’t quit their company, they quit their boss. Certainly, no one wants to work for a nasty boss who is always angry. But employees, especially Millennials, are quick to abandon bosses who will not go to bat for them or give them opportunities to grow.

The second reason is lack of formal programs to develop skills so workers can grow in their jobs, earn promotions, and advance. This goes beyond just providing reassurance, like telling an employee she is doing a great job or you’ve got big plans for her. A competitor might poach him or her by mapping out a step-by-step plan that shows what courses they will take and how completion will lead to pay raises and promotions. Their specificity trumps your good intentions.

The third reason is the one most in the news these days—people quit to pursue their passions. They might leave to join a nonprofit, establish a business, start a family farm, or open a food truck. Every dream is different.

Money is not among the top three reasons people start looking, though most workers mention it in exit interviews. After all, only one in four people polled in 2021 said they had no money worries in the past week. Those with jobs usually cite it as the top reason for daily worry and stress. Yet it is not as important as the other factors when it comes to leaving a job.

Understand Millennials’ values. The media talks a lot about how Millennials differ from the generations before them. Yet, in many ways, Millennials have the same values as everyone else. They just manifest them differently. Take, for example, job security. For a Boomer, the path to stability was to study hard, join IBM or GEM, and enjoy lifetime employment. For Millennials, this plays out differently. They study hard, but they seek security by developing skills that will give them options because nothing is forever. They always have a Plan B, and often a Plan C and D. After all, their lived experience is that they can always find a new job or switch careers.

This attitude creates lots of movement between jobs and careers and makes for a very competitive job market. It is especially acute in such hot fields as accounting, construction, finance, healthcare, IT, logistics, manufacturing, and transportation, as well as in businesses that provide goods and services to those industries. It is most intense in growth states like Georgia, Washington, Utah, and Nevada, or, worse still, Texas and Florida.

So, to sum it up, there are not enough potential employees, it’s easy to change jobs, and the competition for workers is even worse if you operate in an expanding industry or hot state economy. Millennials may have the same needs and desires as any other generation, but unlike those others, they do not have to tolerate substandard anything.

You can fight back. Given this brave new workplace, employers must expect to deal with more worker turnover—Gen X and Millennial alike—than they did in the past. Paying competitive wages is only the start. To succeed, they must take two steps to retain the workers they have.

First, they must address leadership. Their leaders, from top executives to team supervisors, must feed the talent by connecting with and advocating for their employees. A boss who solves problems by running around and screaming is not helping the company retain workers.

Secondly, they must create a system of career ladders. These are formal programs for developing talent that let workers know where they are going in terms of skills, pay raises, and promotions. This is a big deal to employees.

As Brad Hunt of Pape Dawson put it, “You can be an employer of choice or the farm team for your competition—and the local hospital, food truck, and every other organization looking for employees out there.”

Many companies provide training, but it could be better. In 2022, the Hydraulic Institute teamed up with Pumps & Systems Media to survey nearly 500 people in the pump industry about workforce training. Training is popular in the industry. The survey found 70 percent of respondents said their company provided in-house training. In addition, 55 percent said it gave them time off for classes, and at least 40 percent of companies reimbursed workers for in-person, online, and continuing education classes.

When asked who provides that training, only one out of three respondents said their company provided formally structured, on-the-job training. Most relied on vendors and OEMs (three out of five). Half learned from in-house experts. Yet many were left on their own: 40 percent said they trained through trial and error, and 33 percent learned from YouTube and other videos.

The survey asked what types of training respondents preferred (they could pick more than one). Most opted for sessions where they could interact with the presenters, such as live trainings (65 percent) and live webinars (62 percent). Half liked on-demand virtual courses and 44 percent preferred for in-person conferences. Only about one third liked books and publications.

Respondents divided equally on whether their training opportunities met workforce needs. When asked what issues were not addressed by existing training, they listed pump system fundamentals (the leader by far), followed by preventive maintenance, new technologies, vibration analysis, safety, lubrication, and pump selection.

You can do training right. Flowserve training specialist Sheila Mitchell provided a detailed roadmap on how to do training right. The key, she said, is to start small to keep from being overwhelmed and to focus on three main types of skills: health and safety, soft skills (like how to use Microsoft Office, write a report, and use specialized company software), and core competencies (which could range from understanding how pumps work, to the ability to repack bearings or perform an alignment).

A good program will link each skill to a specific training course (using third parties where possible) and describe how the candidate will demonstrate competency (passing a test or displaying a skill). The base skills learned at the beginning create the foundation from which to build greater skills later on. The training map should show a clear path towards promotion when the candidate completes a certain number of classes or logs enough hours applying learned skills.

Most companies use internal experts to provide classes. This makes sense, since no one knows more about your products, applications, and procedures. Unfortunately, Mitchell said, experts often perform even complex tasks automatically, and may not always elaborate on their decision points they use to reach their conclusions (usually the ones they use the most). In fact, studies show experts omit up to 70% of those decision points, which often include the foundational inputs that learners need most to understand a process. This forces learners to figure out things on their own, which may lead to trouble.

Fortunately, there is a simple way to fix this: pair your expert with someone less experienced. Then have your expert explain the process. The less experienced employee will likely pick up the missing content and he or she can make sure your expert covers them.

The result is a program that gives Millennials what they need, a clear pathway to promotion and marketable skills on which they can build. Combine that with bosses who connect and advocate for their employees, and your company is on the way towards making the best of a difficult demographic challenge.

US Census image By Ashersea – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=106557342

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