Executive Summary

This report presents the findings from the Virginia Manufacturers Association (VMA) Skilled Trades Study. This study was conducted in two phases. Phase 1 involved using existing labor and education databases to provide a preliminary analysis of the scope and magnitude of the problems associated with meeting the demand for skilled trades workers in Virginia. Phase 2 involved surveying Virginia manufacturers to obtain primary data on skilled trades employment, evaluate potential refinements in the occupational categories used to define skilled trades, and compile information on various hiring and training issues.

This study was commissioned by the Virginia Manufacturers Association through a grant from the Virginia Workforce Council and in cooperation with the Virginia Manufacturing Advisory Council, an ad hoc group of representatives from private sector employers, Virginia’s Commerce and Trade Secretariat, Virginia Tech, the Virginia Philpott Manufacturing Extension Partnership, the Virginia Employment Commission, and the Virginia Manufacturers Association. The analysis presented in this report also benefited greatly from advice and directed provided by the Virginia Manufacturing Advisory Council’s Skilled Trades Committee.

The adequacy of the skilled trades pipeline has become an issue of increasing importance to manufacturers because a general slowdown in the growth of the U.S. labor force, coupled with a large pending wave of retirements and the increasingly high-tech nature of manufacturing, are making it increasingly difficult to find adequate numbers of skilled trades workers. Absent proactive policy solutions, this combination of events is very likely to create crippling bottlenecks that have the potential to forestall economic growth.

The most salient findings to emerge from the Phase 1 empirical analysis are:

1. There are several instances where the current statewide educational pipeline for skilled trades appears inadequate to meet future needs:
   • Overall, the average percentage of statewide need met across all twelve of the skilled trades evaluated in this portion of the study was only 44 percent.
   • The cumulative gap between 2007 and 2012 (the shortfall in needed skilled trades workers) is estimated to be 12,894 trained workers.
   • In two of the twelve skilled trades evaluated (i.e., Chemical Equipment Operators and Chemical Technicians) the percentage of statewide need met was zero.
   • In six (i.e., Extruding and Drawing Machine Setters; Machine Maintenance Specialists; Multiple Machine Tool Setters, Operators, and Tenders, Metal and Plastic; Stationary Engineers and Boiler Operators; Tool and Die Makers; and Welders) the percentage of statewide need met fell below 25 percent.
   • In one (i.e., Machinists) the percentage of statewide need met fell below 75 percent.
   • Only in three of the skilled trades evaluated (i.e., Computer-Controlled Machine Tool Operators; Electrician and Electrical Technicians; and Printing Machine Operators) was the percentage of statewide need met above 75 percent. Moreover, for one of these skilled trades, Electricians and Electrical Technicians, this finding is largely attributable to the fact that a large number of the graduates in that educational pipeline are actually not typically employed in manufacturing.
2. In addition, there appear to be several regional imbalances in the demand and supply for specific skilled trades:
   • Chemical Equipment Operators and Chemical Technicians – there appears to be a potential need for additional training programs in Central Virginia.
   • Computer-Controlled Machine Tool Operators – there appear to be potential unmet needs in Southwest Virginia and Hampton Roads.
   • Machine Maintenance Specialists – there appear to be opportunities for enhancing the educational pipeline for these workers in Northern Virginia and Hampton Roads.
   • Multiple Machine Tool Setters, Operator, and Tenders, Metal and Plastic, and Printing Machine Operators – there may exist unmet needs in the Valley Region.
   • Welders – there appear to be opportunities for enhancing the educational pipeline for these workers in Hampton Roads.
3. Analysis of institutional capacity within the Virginia Community College System, one of the major providers of trained skilled trades workers, indicates that 10 of the system’s 23 colleges are already operating at, or above, capacity. This constraint likely inhibits their ability to add to the skilled trades educational pipeline with existing resources. Moreover, it bears notice that these ten institutions primarily serve the urban centers of Northern Virginia, Central Virginia, Hampton Roads, the Valley Region, and Roanoke, where the bulk of the demand for skilled trades workers takes place.
4. Several factors were revealed in this portion of the study that point to the need for a survey of Virginia manufacturers to obtain primary data on skilled trades employment.
   • In certain skilled trades occupations (e.g., Electricians and Electrical Technicians) it is difficult to accurately assess the manufacturingspecific demand and supply of the skilled trade workers from existing data. There are three reasons for this. First, on the demand side, with some additional adjustments, industry-specific occupation data are imputed using the average proportion of industry employment comprised of that occupation, not measured directly. This raises questions of accuracy, particularly at the regional level. Second, on the supply side, existing crosswalks between occupations and related training programs are insufficient to identify the proportion of graduates from specific training programs that go into specific occupations. As a result, it is difficult to gauge the true educational pipeline of trained workers for specific skilled trades. Third, the outsourcing by manufacturers of certain skilled trade functions to other industries (e.g., construction) also makes it difficult to quantify the manufacturing-specific demand and supply of the skilled trade workers, because those numbers are credited to the other industry in existing data.
   • The Virginia Employment Commission (VEC) does not forecast occupational employment directly. Instead, with some adjustment, the occupational forecast is derived from the VEC’s forecast of industry employment. Any errors associated with this derivation are likely to be exacerbated in “small numbers” situations where a specific occupation comprises a small proportion of the overall employment in a given industry – a characteristic exhibited by many of the skilled trades.

The most salient findings to emerge from the Phase 2 survey of Virginia manufacturers are:

1. Growth in skilled trades employment is likely to far outstrip employment growth in most other occupations:
   • Total employment in the nine skilled trades evaluated in Phase 2 is expected to climb by about 4.1 percent per year between 2007 and 2010, for a total increase of 12.8 percent. To put this growth rate in perspective, the Virginia Employment Commission currently projects that, over the same period, statewide growth across all occupations in Virginia will only be 1.6 percent per year.
   • In seven out of the nine skilled trades evaluated, annual employment growth is expected to be substantially above the statewide average.
   • At 5.2 percent per year, Manufacturing Technicians are expected to experience the largest growth in employment.
2. Based on the survey data, the cumulative number of skilled trades openings could be much higher than estimated in Phase 1:
   • The cumulative number of skilled trades openings from 2007 through 2010 is estimated to be 46,870.
   • 10,837, or 23.1 percent, of these openings will be driven by retirements.
   • Manufacturing Technicians are expected to experience the largest number of openings, accounting for 22,606 of the 46,870.
3. The magnitude of the gap, or shortfall, in trained skilled trades workers may also be much greater than was revealed in Phase 1 of the study:
   • Where the Phase 1 analysis showed an annual gap in trained workers of approximately 2,441¹ , data from the survey indicate that this number may be as high as 11,751 (although, it is important to note that much of this increase is attributable to the introduction of the new job category Manufacturing Technician in the Phase 2 analysis – a job category for which no corresponding educational pipeline data is available).
   • Where the Phase 1 analysis showed that the cumulative gap between 2007 and 2012 was around 14,646² , data from the survey indicate that this number could be as high as 70,506 (although, again, it is important to note that much of this increase is attributable to the introduction of the new job category Manufacturing Technician).
   • Where the percentage of the statewide need for trained skilled trades workers accommodated by the current educational pipeline was 33 percent according to the findings from the Phase 1 analysis³ , data from the survey indicate that this number could be as low as 12 percent.
4. An overwhelming majority of manufacturers approved of the proposed Manufacturing Technician job category.
   • 96 percent of manufacturers who responded to the survey thought that Manufacturing Technicians captured a class of manufacturing jobs that are not adequately represented in the traditional definition of skilled trades occupations.
   • 70 percent of the manufacturers who responded to the survey were supportive of adding Manufacturing Technicians to the official BLS occupational taxonomy.
5. Entry-level workers suffer from low skills:
   • Nearly half of the manufacturers who responded to the survey rated the soft skills and measurable skills preparation of recent entry-level hires as fair to very poor.
   • Seven out of ten rated recent entry-level hires’ knowledge of basic manufacturing principles as fair to very poor.
6. Statewide credentialing could greatly improve the hiring process:
   • 83 percent of the manufacturers who responded to the survey agreed that there should be additional requirements for career and technical education in Virginia’s K-12 education system.
   • 66 percent of respondents agreed that Virginia should institute a standardized manufacturing skills credential system that would certify the competencies of entry-level and advanced manufacturing workers.