Editor’s Note: Omar Asali is chairman and CEO of Ranpak Holdings Corporation, based in Concord Township, Ohio. The opinions expressed in this commentary are his own.
As CEO of a global manufacturing company, I am focused on our personnel and hiring needs. Our business is defined by our people, and our workforce is crucial to our success. When we can’t find the talent we need, our organization’s potential stagnates.
Recently, at one of our US factories, we were looking to fill several machine operator positions, which historically attracted an abundance of solid candidates. This time, however, we were having difficulty finding qualified applicants. Moreover, our efforts to add additional operators at other facilities across the United States were also proceeding considerably more slowly than expected.
Of course, given this moment in history, there can be several unique explanations for this shortfall, including workers feeling skittish about working in factories during the pandemic. But our hiring challenges in filling manufacturing roles in the United States seem to have been on the rise for some time, even before the pandemic. And apparently, we are not alone. In fact, Deloitte and The Manufacturing Institute estimated in 2018 that this skills gap could leave about 2.4 million manufacturing jobs unfilled between then and 2028. Notwithstanding massive job cuts, I worry that the United States simply lacks the pool of manufacturing talent that companies like mine need.
Looking back can help explain why this might be. Beginning in the late 1970s to early 1980s, the first wave of modern globalization brought a monumental shift of manufacturing jobs from developed to emerging economies. This shift resulted in severe job losses in the American manufacturing sector. Automobile, appliance and textile factories across the American heartland closed down, and the stigmatization of “blue-collar” work as low-skilled and unstable was formed. Mature economies hastened this change by prioritizing the education of a workforce to fill more “stable” and “socially accepted” jobs in the services sector, like leisure and hospitality, communications and financial services.
But now, the global economic order is changing and, amid a global pandemic, the pace of that change is accelerating. Whether we like it or not, we are in the midst of a new wave of globalization, one that has upended many of those previous norms. Supply chains are becoming more localized, with a rise of reshoring of manufacturing organizations in the United States and much of Western Europe. At the same time, China is seeing a movement toward service industries, relying more on the power of its own citizenry to consume its own goods.
All of this sounds like it should be good news for the US manufacturing industry and for workers. While it may ultimately be, it poses a huge current challenge: When rebuilding an enduring manufacturing infrastructure and the human capital necessary to support it, how do we reverse decades of offshoring and cultivate the talent we need here at home?
Our recent recruiting difficulties underscore the need to address the talent pool challenge aggressively and systemically. We must redefine the manufacturing world as one that provides its workforce with opportunity for employment and advancement and the chance to participate fully in defining our future. We must reimagine a society with a thriving middle class that includes our machine operators, assembly workers, supply chain workers and line workers. To be clear, this is not just about increasing compensation and benefits; this is also about replacing the stigma currently attached to manufacturing labor with the social standing and appreciation these essential workers deserve.
The eventual transition from a pandemic economy is both an opportunity and an imperative. We can build a more robust new wave of globalization if we focus on the following important principles:
Shift our education mindset
For generations, our educational priority has been the four-year college degree. As tuition costs and the associated student debt burden rise beyond the reach of many, the appeal of secondary educational opportunities can be marketed more aggressively. Two-year community college and vocational training opportunities targeted toward manufacturing and logistical supply chain opportunities (especially those that integrate digital skill sets) can create a workforce more prepared for today’s real-world opportunities.
Employ automation that enhances, not replaces, labor
Automation technologies are not to be feared. Technology and automation will be a driving force going forward. But let’s embrace technology that enhances our workforce. Learning to work within automated facilities can be a major point of differentiation for employee advancement. In the next wave of globalization, developing highly skilled workers to complement digital technologies will be essential.
For example, our company Ranpak’s equipment, such as our Accufill and robotic arm combination, helps warehouses fill packaging voids more efficiently and reduces strain on end-of-line workers. But rather than reduce the need for labor, they help increase packaging speeds and allow labor to work more effectively on other labor-intensive activities in the warehouse. It’s an ideal example of how a workforce trained in automation can maximize output.
Create middle class appeal
This may be difficult for many managers to hear, but we must make the labor experience more lucrative for our employees. We must pay a real living wage, provide real opportunity for growth and advancement and give clear signs that a life in manufacturing can be well-lived. At Ranpak, we are increasing wages and benefits, adding special bonuses, providing tuition reimbursement for vocational training and continued education and offering mobility channels to help manufacturing employees move from operations into more senior assembly and office roles.
Respect and opportunities for advancement must be conferred to those on the factory floor; they can no longer be limited to the corner office. Only then will the labor force — and the middle class that defines it — return to its rightful place.
To be sure, these are challenging tasks. They require a long-term vision and a belief in the need to balance service and manufacturing needs simultaneously. But the reality is we have no choice but to redefine our approach to our manufacturing sector colleagues.
As a society, we must recognize the essential value these employees bring. And as business leaders, we must offer them compelling and attractive opportunities. It’s a lot to do, but I am confident that, if we embrace this approach, we’ll establish a more prosperous — and equitable — Globalization 2.0.
