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Attracting, Developing & Retaining Automotive Talent in Michigan Kristin Dziczek Director, Industry & Labor Group CAR Industry Briefing 23 June 2015

Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

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Page 1: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Attracting, Developing & Retaining

Automotive Talent in Michigan

Kristin Dziczek

Director, Industry & Labor Group

CAR Industry Briefing

23 June 2015

Page 2: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

The Research

• Attracting & retaining world-class talent is one of the three main pillars of the MEDC Automotive Strategic Plan

• CAR examined automotive industry talent needs for:

– Engineers

– Technicians

– Designers

– Software Developers

– Skilled Trades

– Production

• The needs were related to five areas of technological change:

– Connected & automated vehicles

– Lightweight & multi-material vehicles

– Powertrain & propulsion

– Advanced manufacturing systems

– Supply chain & logistics

• We looked two, five & ten years out at:

– Anticipated hiring & attrition

– Organizational hiring & training practices

– Required knowledge & skills

– Desired education & training

Page 3: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Methodology

• One-on-one structured interviews and data collection:

– Five automakers, representing 63% of U.S. sales (including the four largest in North America)

– Eight automotive suppliers, representing over $36 Billion in North American OE sales

– Four emerging technology companies

– Engineering hiring managers, HR executives, technical leads

• Literature review

• Data

– Proprietary CAR databases

– Proprietary company data

– State & Federal government data

– Commercially-available data

Page 4: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

U.S. Vehicle Production & Automotive Employment

Forecasts: 2015-2018

2013 2014 2015 2016 2017 2018

Vehicle Production 11,100,000 11,600,000 12,000,000 12,300,000 12,100,000 12,100,000

Automotive Employment 686,100 736,000 760,000 780,000 760,000 760,000

500,000

600,000

700,000

800,000

10,000,000

10,500,000

11,000,000

11,500,000

12,000,000

Emp

loym

en

t

Pro

du

ctio

n

Source: Automotive News; Center for Automotive Research; BLS

Page 5: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Michigan Vehicle Production & Automotive

Employment Forecasts: 2013 – 2018

2013 2014 2015 2016 2017 2018

Vehicle Production 2,439,819 2,356,510 2,446,588 2,483,121 2,558,863 2,611,947

Automotive Employment 154,100 158,700 165,000 167,000 172,000 175,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

2,200,000

2,250,000

2,300,000

2,350,000

2,400,000

2,450,000

2,500,000

2,550,000

2,600,000

2,650,000

Emp

loym

en

t

Pro

du

ctio

n

Source: LMC-Automotive; BLS; Center for Automotive Research

Page 6: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

FCA, Ford & GM Total U.S. Employment

2001 – 2018

304

287 279

261 250

213

176

140

114 115 114 120 135

142 147 147 145 145

105 100 98 95 90 85 74

62 56 59 62 67 77 81 85 85 83 84

25.8% 26.7%

28.6%

30.6%

33.8%

35.8% 36.5% 36.5% 36.5%

0

50

100

150

200

250

300

3502

00

1

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Emp

loye

es (

Tho

usa

nd

s)

Hourly Salaried Salaried Share of Employment

Source: Center for Automotive Research

Page 7: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

FCA, Ford & GM Total Michigan Employment

2001 – 2018

137

129 125

117 111

97

81

65

57 54 54 56

64 61 63 64 66 67

77 72 71 70 68 65

58

49 45 46 49

53 60 62 63 64 63 64

35.9% 37.4%

40.3%

43.2%

46.1% 48.4%

50.5% 50.0% 49.0%

0

20

40

60

80

100

120

140

16020

01

2002

200

3

2004

2005

2006

2007

2008

2009

2010

2011

201

2

2013

2014

2015

2016

2017

2018

Emp

loye

es (

Tho

usa

nd

s)

MI Hourly MI Salaried Salaried Share

Source: Center for Automotive Research

Page 8: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Students Graduating from Michigan Schools

2002-2020

0

50,000

100,000

150,000

200,000

250,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Nu

mb

er o

f G

rad

uat

es

High School Associate Bachelor

Source: National Center for Education Statistics (NCES) and Center for Automotive Research estimates 2015

Page 9: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Automotive Related Degree Completions per

100,000 (2011-2012)

0

5

10

15

20

25

30

35

40

45

Nu

mb

er

of

De

gre

es

pe

r 1

00

,00

0

National Michigan Region

Design Computer/ Electrical Engineering Technologies

Math & Statistics

Physical Sciences

Computer/ Electrical Engineering

Engineering Technology & Related Fields

Engineering Other

Mechanic/ Repair Technologies

Computer & Information Sciences

Source: National Center for Education Statistics

Includes Bachelor’s Degrees and Above

Page 10: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Automotive Related Degree Completions in

Michigan by Category, 2011-2012

Computer and Information Sciences

24%

Mechanic and Repair Technologies/Technicians

13%

Engineering Technologies and Engineering-related

Fields 12%

Computer/Electrical Engineering

11%

Engineering, Mechanical 9%

Engineering Other 6%

Mathematics and Statistics 5%

Computer/ Electrical Engineering Technologies

5%

Physical Sciences 5%

Engineering, Civil 3%

Engineering, Industrial 3%

Engineering, Chemical 3%

Design 1%

Includes Bachelor’s Degrees and Above

Source: National Center for Education Statistics (NCES) and Center for Automotive Research estimates 2015

Page 11: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Top States with CAV Related Degree Completions

(Bachelor or Higher) in 2011-2012

17,479

11,999

9,551 8,794

7,425 6,435

5,424 5,313 4,903 4,822 4,808 4,102 4,010 3,865

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

CA NY TX PA IL FL VA MA MI MD OH AZ NC GA

Nu

mb

er

of

De

gre

e C

om

ple

tio

ns

Source: National Center for Education Statistics

Page 12: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

The Challenge to Find Talent

• Plenty of applicants; but applicants with the desired skills are hard to find

• Difficulty filling positions

– Only 40% of positions filled in the last 12 months

– 80 day average per position—about 20-35 days “too long”

• 80% of respondents have difficulty finding talent in the region

– 50% say talent is hard to find anywhere

– So, moving the job to another location is not always a solution

• Suppliers are competing with their customers for talent

Source: Center for Automotive Research interviews with automakers & supplier executives

Page 13: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Recent Auto Industry Hiring by State/Region

• Over 30,000 job postings in 15 months

• Nearly half of all jobs posted are located in Michigan (in line with historical trends)

• Job postings are not 1-to-1 related to positions hired

Source: Labor/Insight Jobs

MI 14,056

46%

OH 1,824

6%

IL 958 3%

IN 900 3%

TX 2,029

7%

NC 894 3%

TN 757 3%

KY 725 2%

CA 1,057

4%

WA 1,043

3%

17,738 58%

4,405 15%

2,100 7%

6,086 20%

South

Other States

Midwest West

Page 14: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Top Employers in the United States and Michigan Auto and Parts Manufacturing Jobs (by postings): January 1, 2014 – 2015 YTD

6,185

4,903

2,199

1,788

1,557

1,404

1,366

899

759

723

4,261

4,633

322

1,040

825

-

52

597

569

466

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

GM

Ford

Chevrolet

TRW

Federal Mogul

Honda

Mitsubishi

FCA

Continental

Daimler

Job Postings

United States

Michigan

Source: Labor/Insight Jobs

n = 30,329

Page 15: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Source: Labor/Insight Jobs

Top Job Titles Auto and Parts Manufacturing Jobs (by postings) in the United States: 2014

and 2015 YTD

546 509

363 211

202 199

190 284

225 191

281 234

191 174

96 103

54 43

35 82

39 126

53 39 42 38

150 44

Manufacturing

Systems

Quality

Process

Electrical

Software Development

Mechanical

Auto Technician

Production Supervisor

Maintenance Supervisor

Buyer

Business Analyst

Sales Representative

Sales Manager

Engi

nee

rSk

illed

Trad

esP

rofe

ssio

nal

0 100 200 300 400 500 600

Job Postings w/ Employee Title

2014

2015 YTD

Page 16: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Skills Demand in Auto and Parts Manufacturing Business and Common Skills: 2014 and Q1 2015

14,644

11,698

10,714

7,008

6,837

3,147

2,114

3,344

2,555

2,420

1,555

1,334

755

486

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Communication andCoordination

Problem Solving

BusinessEnvironment

Project andProcess Flow Skills

Finance andAccounting

Sales & Marketing

Training andStaffing

Co

mm

on

Bu

sin

ess

Job Postings Seeking or Requiring Each Skill

2014 ( n = 24,669)

2015 YTD (n = 5,660)

Source: Labor/Insight Jobs

Page 17: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Skills Demand in Auto and Parts Manufacturing Engineering and Sciences: 2014 and 2015 YTD

3,135

2,453

2,248

2,065

679

1,440

395

311

221

761

655

571

558

150

276

127

80

63

0 500 1,000 1,500 2,000 2,500 3,000 3,500

General

Electrical & Electronic

Design & Dev.

Mechanical

Energy Efficiency

Quantitative Research

Physics

Materials

Chemistry

Engi

nee

rin

gSc

ien

ces

Job Postings Seeking or Requiring Each Skill

2014 (n = 24,669)

2015 YTD (n = 5,660)

Source: Labor/Insight Jobs

Page 18: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Skills Demand in Auto and Parts Manufacturing IT, Manufacturing, and Skilled Trades: 2014 and 2015 YTD

3,918

2,988

996

2,664

1,639

1,852

2,230

504

577

898

732

275

633

409

419

609

137

136

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Supply Chain and Logistics

Dev. and Engineering

Testing and QA

Advanced

General

Construction

Repair

Production (General)

Production (Welding)

ITM

fg.

Skill

ed T

rad

es

Job Postings Seeking or Requiring Each Skill

2014 (n = 24,669)

2015 YTD (n = 5,660)

Source: Labor/Insight Jobs

Page 19: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Skills in Demand in the CAV Space

• Electrical Engineering • Computer Science/Software Engineering • Mathematics—geometry, algorithms • Mechanical Engineering • Hardware testing/calibration • Supply Chain Management/Logistics

• Software Skills: – Embedded automotive software

(including RTOS such as ThreadX and QNX)

– Agile development – Linux—becoming the basis for

infotainment and instrument cluster – Network protocols

• Hardware Skills: – Higher-level VHDL (VHSIC Hardware

Description Language) – VLSI (Very Large Scale Integration) – SPGA (Staggered Pin Grid Array)

Source: Center for Automotive Research interviews with automakers & supplier executives

Page 20: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Engineering Fields Dominate the Job Titles,

but the Most Sought-After Skills are Non-Technical

The overwhelming demand is for technical skills PLUS:

• Communication

• Coordination

• Problem Solving

• Project & Process Flow

• Language Skills & Cross-Cultural Communication

Source: Center for Automotive Research interviews with automakers & supplier executives

Page 21: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Where do Employees Learn These “Soft Skills”?

1. Co-ops and Internships

2. Extracurricular teams

3. Experiential learning

4. Academic coursework

5. On the job

Source: Center for Automotive Research interviews with automakers & supplier executives

Page 22: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Not All Auto Suppliers Have Formal

Co-op/Internship Programs.

• 88% of auto supplier have a co-op/ internship program

• Mostly hire undergraduates and advanced degree students, but some work with high school juniors & seniors

• Only 57% of auto suppliers surveyed have a formal program

Source: American Society of Employers

Page 23: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Private & Public Spending on Job Training is Not

Growing; Hours of Training/Year Remain Flat

0

5

10

15

20

25

30

35

40

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Lear

nin

g H

ou

rs U

sed

Trai

nin

g Ex

pe

nd

itu

res

(20

12

Do

llars

)

Annual Learning Hours Used per Employee

Direct Training Expenditures per Employee

$0

$1

$2

$3

$4

$5

20

06

20

07

20

08

20

09

AR

RA

20

10

20

11

20

12

20

13

Fed

era

l Sp

en

din

g, B

illio

ns

U.S

. $

Sources: ASTD 2014 State of the Industry Report; Budget of the United States, Table 9.1

Direct Corporate Spending on Training per Employee and Hours Spent in Training per year, 2006-2013

U.S. Federal Spending on Training & Employment Services, 2006-2013

Page 24: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Number of Apprentice Programs has been Falling;

The Number of Active Apprentices Grew in 2014

83

65

53 58

62 67 69

204

192

175

162 153 150

160

37 29 29 30 29 26 22

0

25

50

75

100

125

150

175

200

225

2008 2009 2010 2011 2012 2013 2014

Ap

pre

nti

ces

Tho

usa

nd

s New Apprentices

Active Apprentices

Program Completers

1,145 1,072 940 801 898 590 612

12,146 11,915 11,404

10,223 10,166 9,539

8,828

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 2009 2010 2011 2012 2013 2014

Ap

pre

nti

cesh

ip P

rogr

ams

New Programs

Active Programs

Source: U.S. Department of Labor, Bureau of Labor Statistics

U.S. Apprenticeship Programs, 2008-2014 U.S. Apprentices, 2008-2014

Page 25: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Experienced Hires are in High Demand.

519

126

1,048

200

874

426

4,405

1,215

488

311

4,569

1,408

233

137

1,628

677

0% 20% 40% 60% 80% 100%

High School

Certificate /Associate

Bachelor

Graduate /Professional

Desired Experience by Educational Level

< 2 years 2 to 5 years5 to 8 years > 8 years

Source: Labor/Insight Jobs

75%

88%

91%

94%

37%

The Industry Didn’t Hire That Many People Between 2007-2010

Page 26: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Employers Report Very Little Pressure to Raise Wages

for Engineering/Technical Hires

• Despite a “shortage” of candidates, a vast majority of employers we interviewed report little or no upward wage pressure…with a few notable exceptions:

– Embedded systems

– Software/hardware integration

– HMI design

– Candidates with experience (acquired through employment and/or experiential learning)

• Competition is not all in Michigan, United States, or North America, so salaries must be in-line with employees in other countries

Source: Center for Automotive Research interviews with automakers & supplier executives

Page 27: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Wage Comparisons Charts, Selected Occupations in U.S.

Motor Vehicle & Parts Manufacturing, 2010 and 2014

61.5

89.7

121.9

57.5

84.4

121.6

$0

$40

$80

$120

$160

10th 50th 90th

Avg

. An

nu

al W

age

s 2010 (Adjusted) 2014

53.2

79.1

112.0

50.4

73.9

106.6

10th 50th 90th

54.0

80.5

113.9

49.9

76.7

111.8

10th 50th 90th

46.1

77.2

101.6

49.8

73.1

106.0

10th 50th 90th

22.2 31.9

46.4

21.2 29.9

44.0

$0

$25

$50

$75

$100

10th 50th 90th

Avg

. An

nu

al W

age

s

35.9

51.6

78.6

34.2

48.1

71.4

10th 50th 90th

24.9

36.9

49.6

22.2

33.4

48.4

10th 50th 90th

38.1

57.9

81.0

35.5

53.9

74.1

10th 50th 90th

Mechanical Engineers Materials Engineers Electrical Engineers Industrial Engineers

Team Assemblers Industrial Machinery Mechanics CNC Programmers Tool & Die Workers

Source: U.S. Department of Labor, BLS and U.S. Department of Commerce, Bureau of the Census, Current Population Survey

Page 28: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Employers Report a Shortage of Qualified Candidates, but

Little to No Upward Wage Pressure. Something has got to give.

Grow Your Own

Realign Expectations

Raise Pay Find

Substitutes

Look Where Others Are

Not Looking

Source: Center for Automotive Research

Page 29: Attracting, Developing & Retaining Automotive Talent in ... · Attracting, Developing & Retaining Automotive Talent in Michigan ... – Desired education & training . ... –80 day

Kristin Dziczek [email protected]