EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Bonus Episode - The EMS (Eric Miscoll Show) - Talent: Attracting, Training, and Retaining it and Mitigating Scarcity
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Unpack the future of talent in the electronics manufacturing services industry with insights from industry experts David Hernandez of IPC and Gustavo Sepulveda of Panasonic North America. And of course, plenty of views and comments from your host, EMSNOW publisher Eric Miscoll, and his forever curious and opinionated co-host Philip Stoten.
Together, the panel unravels the complexities of building a skilled labor force and the vital role of early career exposure to the manufacturing landscape. The conversation navigates through the challenges of developing a team to capitalize on reshoring demand, the myths surrounding manufacturing jobs, and how educational programs are crucial for cultivating a new generation of industry professionals.
This episode is a deep dive into the transformative power of automation and AI in the manufacturing sector, challenging any narrative that these advances are a threat to employment. We explore the relationship between high-tech automation and job quality, revealing how countries with high robot density thrive with the strongest employment rates. But it's not all about the machines; we also highlight the human element, emphasizing the importance of reskilling and the exciting new job roles that technological advancements can create.
The heart of this episode lies in workforce development and retention strategies that turn jobs into careers. We share success stories from organizations like Microboard and Pride Industries and delve into the strategic benefits of standardized training and certification. The key takeaway? A competent, evolving workforce is not only good for business but also for the industry's future. Join us for this journey through the dynamic world of electronics manufacturing, where innovation and human capital go hand in hand, and where a more sustainable future is possible.
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Hello and welcome to this edition of the Eric Miskell Show. I am Eric Miskell with EMS Now. Today we're here to discuss an ongoing issue within the electronics manufacturing industry, that being some workforce challenges that have been experienced globally for quite a few years now, and what we want to talk about is how both training and automation are seen as a joint solution to this. Before I jump in to introduce our guests today, let me just make a few comments For the audience out there. You will all remain muted during this recording. We do invite you to ask questions during the show, if you wish, by using the question tab at the bottom of the screen.
Speaker 1This is being recorded and will be rebroadcast next week to the industry and made available on EMS now. And then also, we have David Hernandez, vice President of Education with the IPC. He's the intelligent one with a library there behind him, and we have Gustavo Sepulveda. Gustavo is the Process Automation Business Head with Panasonic North America. So, gentlemen, thank you both for taking time today to come on here and share your thoughts. Let me begin by just allowing you each to kind of briefly introduce yourselves and your roles within your organization. And, david, why don't I hand it to you first?
Speaker 2Thanks for inviting me here, Eric, and it's nice to be with everyone. So, as Eric mentioned, I'm Vice President of education for IPC. I oversee all of our workforce training, certification, professional development organization around the world, as well as all of our operations inside of Mexico, Central America and South America.
Speaker 1Super and Gustavo.
Speaker 3Yes, yes, as Panasonic Process Automation Head, what I am responsible is to totally manage the whole SMT business, the robotic welding business, the MES software and the service in Mexico, us and Canada, and I have been in this position for the last four or five years and I am very happy to be with you today. Thank you.
Speaker 1Very good. Well, thank you, thank you. Let me just by way of context kind of say you know, obviously workforce concerns have been a plague on the industry for a while and wherever I travel, and probably you gentlemen too, you hear it from companies, everywhere and in all industries. Really, you know, post-covid things seem to get a little worse. You know, I pulled some data here and it was in March of this year. They said there were still 570,000 open positions in US manufacturing industry.
Speaker 1That's not just electronics, that's across, all right. So within that. But that just kind of shows you kind of the sizing of the kind of the open position, the need that's out there For electronics manufacturing. It's been very interesting for the last few years because I think the way our industry has responded is with various initiatives. One is to help promote the industry, to make it hopefully, you know more known and make people more aware of it as a potential career path, with training opportunities to train up for the industry, and then also through automation to help supplement the manufacturing environment. So with that kind of in context, I want to kind of ask you jump in with you gentlemen and start with and maybe, david, I'll start with you what is your assessment of this issue, kind of the and the need to elevate the industry as a desirable place to go work and have a career?
Speaker 2It's a great question and one that is really important. The electronics industry in the United States, in particular, is in a difficult position, right, unlike other manufacturing sectors who are also experiencing issues. We were outsourcing jobs at a time when we should have been building a pipeline in this country, right? If you look at other things like welding or machining, or, you know, mechanics, electricians there are pipelines that are already established within our academic system that outputs ready-trained, ready-to-work new talent on a yearly basis. By the time that we were maturing as an industry and started to need a broader workforce, we were at a stage where our economy, through globalization, was outsourcing a lot of that work, and so those pipelines were never really developed, and so it's not really surprising now that we have a problem with getting new talent into the industry.
Speaker 2Now you couple that with what you mentioned a little bit earlier, which was this idea that we have to build awareness of these jobs. Right? I can tell you that most kids that go through the public education system in the United States don't even know that these jobs are available or exist or that this is an option. Right, we have a very we very much have this college first mentality for all students in the United States, and so the two parts of the problem are really to to at a very early age, we need to start drawing awareness to these students that there are other careers out there for them. There are different possibilities for them. Some of them you don't need to go to the university for. You can go into manufacturing, and some of them, even if you go to university right, you go and you study engineering, you go and you become a technician.
Speaker 2You have to draw awareness of the potential for a career here, right, and you have to draw awareness of the potential for a career here, right. And you have to couple that awareness with exposure. Right, which is the key. You have to think about it and you can think about production workers different from, maybe like engineers, right, at the engineering class, you're competing with the Googles of the world.
Speaker 2Right, you're competing with software, right, which are providing these sexy jobs, these high paying jobs, these jobs that are very prevalent in our society, right, but the kids that are making these career decisions never really consider the fact that hardware is an option as well. Right, they're walking around with supercomputers in their pockets and to them, they were just born into this world. Right. They're born into a world where SpaceX is launching a rocket every week into space and you're surrounded by this marvelous technology, and we never really stopped to kind of introduce to them that they could be part of that. Right, they could be part of this great future that we have, where you can help build the next phase of human technology.
Speaker 4Yeah, I think it's really interesting, david, when I've talked to people about this idea of making the industry more attractive and I sat at a meeting actually in Germany on the same topic recently and I said, how do we tell everybody that electronic manufacturing is sexy, and I'm like, yeah, but is it? And it's not sexy, but it is sustainable, sustainable, well-paid jobs in that industry. So there are lots of career options and, interestingly, germany has the apprenticeship system, which is very strong. In that country, the image of an engineer is at a much higher level as well, so it's seen as a much more attractive career. But they are still having the same talent issues that that we're seeing in the US and in other areas. So I think it's you know, I think it's the same everywhere and in other areas. So I think it's you know, I think it's the same everywhere.
Speaker 4The other thing that I think is really interesting that I've heard from EMS companies is that a lot of students are really surprised when they get to the factory. So they expected something quite dirty and noisy and dusty and unpleasant and it was far from it. It was much closer to a clean room than they um, they expected and there was some interesting stuff there and you know there are people there designing robotic solutions to specific manufacturing problems, um, and doing all kinds of interesting work. So there's a bit of a eureka there as well. But you know, how do you, how do you apart from um, you know hijacking school buses? How do you get people to come and visit factories? You can't do that, by the way, but you know, I think it's a challenge.
Speaker 2You know, I'm sorry, go ahead.
Speaker 1No, I was going to ask Paul Gustavo. In here too. Gustavo, you know what are your thoughts on this. How do you see the industry being elevated and the need?
Speaker 3Trying not to repeat what was mentioned already that I fully agree. I think it is important to mention. Companies want to near shore and this trend will continue in the years to come. Now we have one limitation by definition In the US, we are give or take 0.3, 0.4 million people, more or less. Can you see me? Well, I think the-.
Speaker 4Did it go dark? Have you got one of those proximity lights that turns off when you don't move enough? Yes, or just a light coming in? Let me finish my answer.
Speaker 3Yes, yeah, finish the answer 0.3, 0.4 million people in the US. In China there are 1.1 billion people. So we are comparing 0.3 billion against 1.1 billion. So, by definition, yes, companies want to near shore as much as possible, but there is a limitation because US doesn't have the number of people that China has or that potentially India has. So the additional challenge is, if we want to near shore even with this limitation that we have, automation is key. So you may produce the same PCB or the same circuit board something similar, maybe. Pcb or the same circuit board, something similar maybe, but the level of automation that will be needed in North America is going to be higher than the rest because we do not have that capacity the number of people that other countries have. Trying not to repeat what Phil and David mentioned, this is what I would like to add.
Speaker 1Okay, there you are, you're absolutely right, I know yes. Excellent, david, you were going to say something too there. You were going to add I'm sorry.
Manufacturing Industry Trends and Opportunities
Speaker 2No, no, it's all good. Gustavo brought up some really good points that we should delve into as well this idea of nearshoring and how much we can actually nearshore or onshore or nearshore right, both of them are options. What I was going to mention before was that prior to my current position with IPC, I was in a similar role with the American Welding Society, right, and so I worked on the welding workforce issue and I would always hear this, right, I would always hear that it's very hard to sell these manufacturing jobs, and at some point I had to just stand up and challenge that idea and I said I can't think of a job that is easier to sell to kids than welding. I can walk into any classroom in America, any elementary school classroom in America, and tell them hey, guys, you can get paid to melt metal with lightning, and every boy and every girl in that class is going to go home and say I want to be a welder.
Speaker 2Right, part of it is a messaging problem. Right, we're selling this as saying hey, you can go and work in a clean room for eight hours a day, hooray, right, that's one message you can give. Or you can say look, you can help expand the reach of humanity to Mars. Beyond our current capabilities, you can help and develop the latest technology that is going to run the AIs that's going to cure cancer right. It's a messaging problem when you focus the career on just the one task that they're doing. It's very limiting in how you can scope that. But if you connect it to the broader good of what our industry is able to accomplish, it opens up a whole nother world. It's a messaging problem.
Speaker 4Yeah, and then it is sexy, david, you know when it is, when you put in, you put in stuff in space, you're curing cancer, you're doing all those good things. But you're right, it is messaging and it is very much perception. I think the niche you're in things interesting and I think it's worth touching on because I think we're seeing this fascinating trend at the moment where that pendulum is swinging back from globalization to regionalization again and it's swinging quite hard and that's having an impact. And if that's having a positive impact in the US and in some other higher cost regions, then that's great and I think it's actually a more pragmatic and more sustainable approach to supply chain. But the risk that that would stall because of talent shortages or because of other issues is really fascinating.
Speaker 4And when you look at people talking about the winners in that pendulum swing, they talk a lot about countries like India and Vietnam and Mexico. And when you look at India, it's obviously got a huge number of graduates coming out and those graduates are as likely to go into manufacturing as anything else, so they don't have that issue. We potentially have the issue in Europe and in the US of talent being a choke on that Vietnam seems to have an issue with energy. At the moment, they're telling companies not to use too much power, which is kind of hard, isn't it? That's another thing you're going to have to solve, gustavo, but I think the risk of choking that regionalization trend because of talent is real and present.
Speaker 3Something that I tell to students that are trying to find where to go once they finish with their degree and everything. I tell them not a lot of people have joined electronics manufacturing or manufacturing in general in the last 25 years, as David mentioned, and if you join, you will find that there are more opportunities than people. So practically you will be able to select what field or practically what position you want to have, because we have been the same people for the last 20, 25 years. I agree 100% with David. Not a lot of new people have joined. We have not sold this idea well, and people that join now I think they will have a really nice career. There are 570,000 open positions. With all the-shoring, imagine how many we are going to have in two, three years. So it is a great opportunity for students that want to join this field, in my opinion.
Speaker 1And that's why I'm enthusiastic too about, you see, the programs that are bringing the students into the factories. I've seen that in different countries and within the US as well, because exposure is such a big deal, right. They don't know what this entails. I remember the first time I walked into a factory, god, almost 30 years ago. What it looked like then and what they look like today, it's very, very different, right.
Speaker 1So with all of the automation, with all of the high technology that's in there and Phil, you made that point All of a sudden it's like this is kind of cool, right. I get to work with robotics. Now I have all these whiz-bang machines that we get to do. You know, that's a lot better than I get to hand solder on a table all day, right. So who wants to do that? So? But let's take it to the automation thing first and then bring it to the training that follows from that. So, on the automation side, maybe, gustavo, you know the trend is clearly to increased automation. I think we're seeing that not just within the pre-reflow, but also the post-reflow. Right, there's pushes there. But what I want to touch with you on and we talked about this before is a lot of people assume that if we automate everything, all the people go away. You certainly have an opinion on this. Please share that with us.
Speaker 3Yes, I have a strong opinion. People go away when companies are not efficient, when companies are not safe or when companies do not produce with quality. Why? Because if you have one of those three issues, the company always loses money, and when companies lose money, they need to reduce costs, and part of those costs will be, sadly, people. On the other side, automation will help companies to produce in an efficient way, with safety and with high quality. As a consequence, the company will make money and the company will grow, and when the companies grow, automatically they will need people. So my strong opinion is automation generates jobs, because it helps companies to be efficient, safer and produced with quality, and that generates more jobs. That is my opinion.
Automation, AI, and Workforce Trends
Speaker 4Eric. I think you're right, Gustavo, and I certainly see that with EMS companies I visit and you know, when I look at what they've been doing over the last few years in terms of operational excellence and automation and efficiency, what they've been trying to do is grow with the headcount that's available to them, rather than try to use automation to reduce the headcount. So actually, what you're seeing is the people they have in more senior positions, more interesting positions, perhaps better paid positions and more sustainable positions and, as you say, sustainability for those businesses is essential. They need to not be those companies that are struggling with quality, losing big customers and then having to downsize their workforce and then try to bring that workforce back when the market ramps again. That's something that the industry has had major challenges with all over the world for some considerable time. Contract manufacturers shouldn't be just contract employers.
Speaker 3You know something that is very curious the countries that have the highest density of robots Japan, south Korea, etc. Those are the countries with the highest employment in the world as a percentage. There you go.
Speaker 4It's a curious thing, isn't it? Yeah?
Speaker 1David, what's your view on this?
Speaker 2So I agree with everything that Gustavo said. I think he brings up really good points about the fact that you know, anytime that you're dealing with high reliability electronics, any sort of quality issues is going to cause significant economic problems for the organization, which is inevitably going to lead to layoffs. I also think that it depends on how you look at this. Right. In economics, we talk about this thing, you know. We talk about creative destruction, the idea that in order for, you know, advancements in technology to occur, you need to. There are jobs that get destroyed along the way, while new ones are created right, and so that's really what I think when I think about automation. That's really what I think about right, there's jobs that will inevitably be lost when you automate right, but at the same time, there are new, better jobs that are being created right, and so the question that I always grapple with when it comes to automation and manufacturing is the jobs that we're losing. Are those jobs that? Are we really going to be able to fill them? Are we really going to be able to have a workforce that fills that role? And I think what we're seeing right now is the answer is no, right when you're talking about some kind of entry-level production jobs.
Speaker 2We have very high attrition rates in this industry, right, in the United States.
Speaker 2I talk to organizations all the time that have 40, 50% attrition rates over the first year for those production level jobs and it's not as though they're losing those people to other competitors.
Speaker 2They're losing them to other industries, right, they're competing against the Amazons of the world, right, and taking that job and saying we're going to automate it fully or we're going to semi-automate that job and create a technician job or a senior operator type of job to replace it. You're talking about a better job quality, a greater career opportunity, higher pay, better benefits for that worker, and now our industry is able to better compete against those other industries that are offering better pay, you know, better career opportunities, and so, either way that you look at it, I think it's a benefit to the industry, right? We just don't. If we had, if we had a surplus of workers that were saying, hey, we have. We have 20 million people that we have to put to work in this country, right, 20 million people that we have to put to work in this country, right, then okay, you can say maybe we don't want to replace some of those high-volume jobs with automation, but we don't. We have something like 10 million unfilled positions right now in the United States, right?
Speaker 3So job quality actually matters, and something that I sorry, I was thinking, david, while you were saying this, I mean something that we use almost every day or every week the ATM. The ATM. You go there, you get cash, but you go through the bank and you still find a lot of people and they are advisors and they are people that are providing value. They are not giving you cash anymore, they are doing different jobs that are better jobs, and the ATM will continue to be there, but the bank continues to be there at the same time. It's been 25 years since the first, or even more years since the first ATM.
Speaker 2Absolutely.
Speaker 3I can't believe you guys are still using cash.
Speaker 2It's so old school, it is right. But it's just the nature of creative destruction, right? You can't advance technology without some older technology just falling off. Right, it's the nature of the process. It will always continue. It's how economies grow, right? So we shouldn't be afraid of it. We should just embrace it and say, okay. Now and this, I think, will be a nice segue to your next topic, Eric it's really about saying okay, well, you had workers that were doing this job and let's say that we were automating away jobs of an existing workforce. Can we now train that workforce for this better job? Right, and I think that's becoming the and in this case, since we have shortages everywhere, it's not even like as much as training the existing workforce, but training a workforce to be able to take those better jobs. Great segue to training.
Speaker 1That is a nice segue there, Although I wanted to ask one last element on the automation before we go to the training, if you allow me, Dave, and that is the whole thing of AI, because what we're getting in now is we've had this, the trend of automation. Now we have kind of AI powered solutions right that are driving this too, which is really the elimination of a lot of the tedious tasks, right, that you think that humans maybe really don't need to be doing some more if we can simplify and automate that even more and take away and let something smarter and quicker and that doesn't complain and need lunch breaks do this for us, right? So do you see that as being a trend too, as something that's maybe even supercharging some of the automation?
Speaker 2Maybe, right, and I think AI has become the new buzzword, right? Everyone wants to use everything that any sort of automation now, any sort of technology, is just everything's being branded AI. I think AI is something that we do need to look at. I mean, I think that right now, today, there are organizations that are using AI to better understand the efficiency inside of their organizations. They're understanding the analytics of how their lines are running, and I think that that's just increasing our quality, right?
Speaker 2I don't think it's displacing jobs at this point. Can it displace jobs? Yeah, of course, and actually I'd argue that there's a better chance of it displacing white-collar jobs than it displacing blue-collar jobs, right, and so it's something that we are going to have to tackle as a country and as a world, right? What happens when many of these jobs become automated right Through AI? And I don't know that anyone has an answer right now, I'm not so worried about it in our industry. I mean, I think automation, as Gustavo was talking about, is really going to be the next 10 years, right, ai may be the 10 years after that, but I got to worry about the now problems.
Speaker 4Yeah, and there's some interesting AI actually working really well in the industry and the supply chain side. I interviewed Anna-Katrina Shedletsky from Instrumentl yesterday and we were talking about the work they're doing in terms of quality inspection for new product introduction. They've got a case study up on their website for Meta. Meta stated in this case study they saved 900 engineering weeks a year 900 engineering weeks a year. Engineering weeks a year, 900 engineering weeks a year, which is phenomenal on seven new product introduction programs using the instrumental system. Now that's talent loss mitigation and that's, you know, ai driven. And we talked a bit about the AI systems that are being used to check the quality of the boards that are being assembled for servers, for AI data farms. So we are in that fascinating stage of the AI guarding the manufacturing of the AI. So I think it's coming faster than 10 years and I think there is some really interesting work being done on it. But I think when you look within an EMS factory, it's not having an impact now. But it's certainly something I think we need to be aware of Just before we shift to talent.
Workforce Development and Skills Training
Speaker 4Eric, I just wanted to mention another thing. Up was actually the extension of the talent pool and considering inclusion and diversity when you're looking at where you're recruiting people from. Nicole Russo from Microboard in the US had a really interesting example of where they were. Had a really interesting example of where they were training people that were neurally diverse, neurodiverse people and that was opening another 6% of the talent pool up and apparently you know, 6% of the available workforce in every state has some kind of neurodiversity. Creating again segwaying into training, creating training programs, creating talent programs that make the manufacturing industry attractive to those people.
Speaker 3Yes, for me, this is another change. We have had a lot of changes in our history as human beings and in every change always something positive comes out, and there has been progress in every single change, and I am not concerned at all. As practically everybody mentioned, I think this is going to be something again positive. We are going to be able to do more, more creative jobs, more challenging actions, and I really look forward to it. I would like this to be implemented faster. We need to wait a little bit, but it is something that doesn't concern me. All the opposite I am optimistic and I want to learn about it as soon as possible.
Speaker 1Good, let me move to the training and let me leverage this kind of pivot off of something Phil was talking about with the Neurally Challenged people. I did an interview it's on our site today with Pride Industries, which is Pride is the largest employer and trainer of disabled people in this country. And then they also had other, as they call it, kind of employment people with employment barriers. Some of those could be veterans, some of those are people who come out of the foster child programs in this country, right, and so they engage with these people and bring them out. So I think they're to your point, phil. I think we are also thinking more holistically now about who these people are that we can train up to kind of help fill jobs.
Speaker 1So, having said that and did my pitch for the interview that's on our site, I'll move on. But for training and David, let's start with you kind of give an overview of the you know, from a training perspective. Ip is one of the the main, obviously, certification trainers for the industry globally, um, and that's just at one level. Companies I know are doing training at different levels, but maybe started a big picture with what ipc is doing. Give us an overview kind of you know what you're up to there.
Speaker 2Uh sure, so, um, we just actually published a white paper about this. So if you guys are interested in kind of getting into the details, the white paper is available on the IPC website. It's free for everybody. Um but um, we have, and we've been working on this issue for the last five, six years now.
Speaker 2We've been identifying different challenges within the industry. There are four in particular that we're working on right now the idea of we have to develop pipelines. We have to be able to onboard new talent effectively and get them up to a high level of productivity quickly. We have to have career paths to provide opportunities for people to turn jobs into careers. And then we have to find mechanisms to be able to upskill large pieces of the industry as technology changes. Gustavo's talking about his enthusiasm for AI and I think I share that and probably everyone on this call does right. But at some point very soon we're going to have to start upskilling existing engineers, existing technicians, to new technologies. So in addressing those four challenges, we are approaching the problem very systematically, right.
Speaker 2Our belief is that standardized training can have the similar effect to what standardized certification has done for the industry over the last 30 years. You mentioned IPC being a global certifying body for the electronics industry. We certified last year 135,000 people in 200 countries in 21 different languages. We also work with the industry on developing all of that training and distributing it to trainers around the world. We do similar things when it comes to workforce or skill-based training. We have a library of training programs that solve a variety of different needs in the industry. Right so, we have training, for example, that you can give a brand new operator when they walk in. You know they worked at Starbucks on Friday, monday morning. We have training to get them up and on the line within that week. You know we have, and these are programs that are used throughout the industry. Right now we have. We just launched the first three apprenticeship, nationally recognized apprenticeship programs in electronics. Last year we started enrolling people this year for that.
Speaker 2You talked about Pride. Pride actually is a is a is a partner of ours in workforce. They utilize a lot of our workforce solutions. We work with our foundation works with universities around the United States to get them access to facilities so that they can kind of get that inside look of what these jobs look like. We have a careers in electronics website that we just launched last year to provide students and parents with information a careers in electronics website that we just launched last year to provide students and parents with information about careers in electronics Every day.
Speaker 2There's no one solution to the workforce problem, right? There's no one workforce problem right. Whether you're talking about operators, inspectors, technicians, engineers, doesn't matter researchers, there's a different set of problems for each one, and so what we're doing is we're leveraging all of our resources and, most importantly, we're leveraging the thing that I think IPC does best, which is we can bring the industry together to solve problems right. As a standards body, as a certifying body. That's what we do.
Speaker 2We put, you know, the operator training program, the operator assembly program that I talked about. We put a hundred companies together to build this program right. This is an industry program, it's not an IPC program, and so we put them together. We, we, we standardized the education with the goal of saying we put these hundred companies together and we realize 85% of what they teach their operators is exactly the same. So we're going to standardize that 85%, that last 15%, which is how you do these things in your facility. The company takes on right, and so now we're able we have a variety of case studies again on our website if you want to take a look at those that talk about the effectiveness of this type of approach. Right, both in reducing training times to increased retention for the people that go through the programs, to decreases in waste, decrease in rework and repair higher yields. So it's a matter of finding the right solution for the right problem inside of an organization and then leveraging the tools that are made available to them.
Speaker 1Yeah, that was an excellent overview.
Speaker 2Thank you. It's a lot to go over very quickly.
Speaker 1It's clearly not your first rodeo on that one, david, because that came out pretty good. And that's the point too, because and Gustavo, speak to me there's the level where the IPC and the trainings that they're doing. But, like you said, then there's the customization within the facilities. Right, then there's, in fact, facilities are never going to be able to escape the fact that they're going to have training responsibility or equipment suppliers when they come in with their equipment, there's some training that's going to be required in upskilling and familiarizing people with their equipment.
Speaker 3Yes, and it is very common that companies in the US do not bring more manufacturing to the country because they do not have enough skilled people. There are several reasons, but this is one of the most critical reasons why companies cannot produce more locally, and for this it is very important that companies develop internal programs to upskill their people. One simple example In the past it was very common that a company comes with the customer, they train the customer and practically that was it. The company did not need any more training for the next two or three years. People leave high rotation or because the demand is so high that sometimes companies cannot cope with that demand that I need to constantly train my people. So you need to develop some initiatives like train the trainer.
Speaker 3So now the company trains its own people with internal resources. They have one robot, one SMT machine, whatever. They have the trainer. So we as suppliers, we train the trainer and this person trains the whole plant practically constantly, because they need new people very frequently and they can't simply say Panasonic will come once every year, once every other year and that will be it. That is not enough anymore. On the other side, it is very important that we, the suppliers, provide easy-to-use machines, easy-to-use software that can facilitate the operation to our customers. The easier to use, the more the companies will be able to produce locally, because at least that gap, that training gap, will be easier to fill, and we are working on that.
Speaker 1So wasn't sure if I'd bring. I'll bring it up anyway. You know I've been on a theme here lately since Apex about, you know, the EMS industry and the concerns about, you know, not finding enough workers, and my line was well, if you're paying them 50 bucks an hour, your lobby would be full right. So you know, the other issue is is that the industry has a margin issue, at least as EMS companies. Right, oems are making nice double digit margins. Ems are still challenged at the you know kind of lower single digit type piece, and that's just so.
Workforce Development and Retention in Industry
Speaker 1You know, we've always kind of encouraged EMS companies to kind of diversify their revenue stream, you know, expand that and I think. But it's also, in my mind, kind of different if I think of the North American industry, which is the more lower volume, higher mix type work right which generates and a lot of prototyping. It generates new product, generates a higher type margin. Those are higher margin functions within the industry and we have more of that here than we did, a lot of that high volume that benefited from intensive, low cost labor right that was offshored for over the years. So what's your view on that? Do we see this changing within the industry?
Speaker 4it goes back a bit to what Gustavo was saying earlier that sustainable, successful, profitable businesses retain people and sustainable, successful, positive, profitable businesses can afford to train those people and can afford to upskill them and pay them more.
Speaker 4You know it's, it's like you say, eric, you can pay your team more if you, if you make more money and you know that is your. You say, eric, you can pay your team more if you make more money and you know that is your hobby horse. Get out there and tell the industry to be more profitable. And I think, with the reshoring trend and with everything that's going on, and with the proper application of automation and manufacturing excellence application of automation and manufacturing excellence combined with being in those, perhaps those markets that are a little bit less price sensitive, those high mix markets there is the opportunity to do that. But that needs to be absolutely, absolutely embraced and that needs not just a understanding from the EMS companies but understanding from the OEMs and brands that use those companies that if everybody in the supply chain makes a profit, the supply chain is more robust, more secure and more sustainable.
Speaker 1Exactly right, gustavo, you were going to say something there.
Speaker 3I was going to say with different words what Philip mentioned, but I can add something. I think something important is that companies need to work together in order to develop the knowledge in the community. Ipc can help us a lot in this topic and they are doing that already with a lot of seminars, a lot of courses. But at the same time, we, as suppliers, can work with universities, we can work with the supply chain in order to develop this mindset, this wish to participate in this segment, this knowledge, so that when people join the segment, they are not starting from zero. So if we can work with IPC and we are in order to develop this competence before it's needed, if we can do the same with the universities providing the machines so the students leave the university with some knowledge, we save a lot of time. That is what I would like to ask.
Speaker 1Good, David, I see you shaking your head. Go ahead and comment.
Speaker 2Well, so over the next four and a half hours I'm going to go ahead and explain how we're. I'm just kidding Briefly. This is a really complicated topic, right, but if one organization trains someone and loses them to another organization, I always say this is not an IPC problem, right, you lose someone that's talented to another competitor. That's the market, right, they may be offering, they may be more efficient, they may have better quality and therefore have higher margins and therefore can pay more. The problem that we see in the industry is that we lose a lot of people out of the industry, right, so we're making these investments in workforce and then we're losing half of that investment over the first year. Right. And so the question and Phil mentioned something and it got me thinking of my kids right now, who are working in their first jobs, and they always complain to me about minimum wage and they're ready to jump from one job to another to make 25 cents more an hour. Right, and the issue is that they think about this as a job, and that's okay, right, because they're trying to go to college and they're trying to get their careers and all that. So it may just be a job for them. But if we can offer people careers instead of jobs. Right, that's a game changer. Right? If we can say, if the best thing we can offer someone, let's say a production worker, is you're going to make 15 bucks an hour today, and 10 years from now you're going to be making 18 bucks an hour, that's not much of an incentive for them to stay Right? But if you say, look, today you're starting off at $15 an hour, but we're going to help you, train you, so that a year from now, you're doing this other work and a year after that you're doing this other work and two years after that you're doing this, and they can see this progression in their career. All of a sudden, that becomes very attractive, right? They're seeing that the company's willing to invest in them, to grow them, and that creates loyalty. Right, that creates a higher, a better relationship between the organization and the worker, even with our young engineers, right?
Speaker 2Gustavo said something a little bit earlier in the, in the, in the uh, in the meeting he said um, you know, uh, and I think Phil also talked about this there are career opportunities that exist in our industry that don't exist in others. Right, if you want to go work at Google, that's great, but so does everyone else, right, and it's basic supply and demand right. When the supply of workers in that industry increases, you know the pay and the benefits for those workers and the opportunities for those workers go down. We have a lot of opportunities in this industry for technicians, for engineers, for production workers.
Speaker 2The key to me is something that Gustavo mentioned a little bit earlier, which is if we can standardize training across different groups, if we can credential people to have the competencies they have be recognized out of school when they're entering into the workplace, competencies that they gain in the workplace over time, those people are going to want to stay in the industry, right. Why would I want to leave the industry if I've invested all this time in getting these certifications and these credentials, to then have to start over in another industry, right? So they may be leaving an individual company, but they're staying within the industry. And so over time and this can't happen overnight over time you start to really build up a workforce for that industry, right? But the key in my mind and I may be biased because I spend so much time working with associations the key in my mind is can you standardize that training, that curriculum, so that organizations know what they're getting when they hire a worker.
Speaker 4Yeah, I think that's really valuable. But I think when you layer on top of that the fact that they can go through that career progression, and actually the sky's the limit, I think what they need to be able to see is those inspirational role models. And again, that plays to diversity, and it's great to see more women in senior positions and, as I mentioned, neurodiverse and all those different areas I think are hugely powerful. But there are plenty of examples of CEOs of EMS companies that started on the line, that started doing those IPC training programs and have come all the way through, because engineering and those skills are still hugely valued, even in the C-suite of the small, medium and large EMS companies. So I think there are inspirational role models and if you can overlay that with a career path that has those different elements of training, it does feel like a career and less like a job and moving for 25 cents an hour. So I think the combination of those things makes it interesting.
Speaker 1So it's what you said earlier, eric it's making the industry attractive, but also making that career path visible and standardized works for companies but it also works for the individuals within it yeah, no, and I, as you're talking there, phil, it reminded me what we used to say when I was in training, which is, you know, if you have to import talent to your company, that's generally showing a failure of your internal development, your internal training. And you know processes Right. They did their own internal famously right. They promoted within and everybody else. Those other candidates went to other industries because they, you know they had skill sets that were so well valued.
Speaker 1Listen, I want to be respectful of our time. I know we're coming to an end. I did want to kind of end it with allowing you to offer some advice to the audience out there in the sense of obviously, this is a complicated issue. We've talked about various elements of it. You know you joked, david, we could talk for another four and a half hours and there's a lot to this. I think progress is being made in the industry is my perception right on all fronts, fronts and everything that we've been talking about here. But you know, to EMS companies the companies out there within our industry that are dealing with these issues, what would be your best advice, kind of. I guess I'm thinking more in the short term than the longer term, because you know what's your best advice to those companies for addressing issues and challenges that they're facing in attracting and finding workforce? And maybe, david, I'll start with you.
Speaker 2The first thing I'd say is that there's an absolute ROI to the investment that is made in training. There's an immediate ROI in quality, reliability and a reduction of waste. There is a long-term ROI in retention of talent, and so sometimes we have a hard time thinking through to the next stage of that ROI discussions. We say, hey, training this person is going to take them off the line for this amount of time. Right, it's going to cost me this amount of training time for my trainers, or things like that. That investment is key to solving a lot of these problems, right? You're not going to be able to solve the workforce problem in the short run without companies realizing that there's absolutely a return on that investment. Right, and it's going to show itself in a variety of different ways. That's the first thing I would say.
Speaker 2The second thing I would say is that IPC is dedicated to working on this issue with the industry. Right? This is one of the top issues that the industry is facing, and the more organizations get involved, the better the solutions. The faster the solutions that we have, the more varied the solutions. We only know what we know. Right, decisions are made by the people that show up, right? That's a saying that gets used in politics all the time. Well, I can only help solve the problems that we know about right. I have a team of dedicated people who are passionate about solving this problem at IPC, and the organizations that show up are the ones whose problems we're going to address, and so there's a variety of different ways to get involved, but I encourage you to get involved with IPC. It's going to help your organization as well as helping the industry as a whole.
Speaker 1Very good, Gustavo. What pearls of advice do you have to offer?
Speaker 3My advice will be do not get late with the new tech trends. Sometimes companies may be afraid let's wait a little bit, and they wait forever, and once they know it, they are way too late, not efficient, not safe, not good quality, etc. You do not need to do everything at the same time. You can begin with the low-hanging fruits and once you start with that, you get confident and then you will begin to feel, hey, I want more, this is possible, this is doable, this is good. So that is my advice Go with the experts and try to do something. Start with the easy ones. Then the whole company will get very engaged because they will see the outcome. Sometimes companies want to do everything at the same time. Not my advice. Sometimes they say let's start with the most difficult, so then the rest will be easier Not my advice. Let's begin step by step, and there are a lot of companies Panasonic is one of them that will be willing to support Excellent.
Speaker 1Phil any closing comments.
Speaker 4Gustavo, I don't think. Yeah, I think. So I think, you know. Automate more would be my advice. Train more would be my advice. Invest more in your people and that's the, you know, the acquisition of talent, as well as the development and training of talent. Cherish those people, and I would finalize that with a classic Eric Miskell comment, which is make more money and pay your people better and you'll keep them for longer and you'll keep your business for longer. So you know, I think, if you're creating a sustainable business, you need to do all of those things, and investing in your staff is just like investing in yourself. You absolutely need to do that.
Speaker 1Absolutely, Gentlemen. Thank you all for a very engaging and robust discussion about this issue. Look forward to staying connected with all of you and following up in the future. Thank you very much. Thanks, Eric Bye.