The job crisis: Is the industry doing enough?

During the long presidential campaign we all heard the laments about manufacturing jobs disappearing in America. But ask anyone in the boating industry, and you quickly get a different story.

Manufacturers such as Fluid Motion, the builder of Ranger Tugs and Cutwater Boats, can’t expand as quickly as they would like because they can’t find people to fill the jobs needed to grow, says Fluid Motion president John Livingston. On the dealership side, the technician shortage is no different — maybe even worse — according to a new assessment done by the Marine Retailers Association of the Americas. MRAA president Matt Gruhn calls it an unprecedented “work force crisis.”

The MRAA survey drew 517 responses representing more than 1,300 dealership locations. The study showed that dealers “are operating their businesses at less than 80 percent of their staffing needs, and they expect to need even more employees over the course of the next three years,” says Gruhn. “This problem is only getting worse as baby boomers are retiring from the work force.” More than 21 percent of the positions dealers had budgeted to have on their payrolls in 2016 remain unfilled, and more than 90 percent of dealers have multiple positions unfilled.

The situation puzzles manufacturers and dealers. They speculate that some people just don’t want to work or they’re not aware of the jobs waiting to be filled — thousands in the marine industry alone.

Add to that the fact that Ford, for example, moved 3,200 manufacturing jobs from Mexico and Spain back to Ohio in 2015 and Boeing said it would restore 2,700 manufacturing jobs in St. Louis — both in industries that are facing challenges in filling positions.

According to a 2015 MarketWatch report, 60,000 manufacturing jobs were added in the United States in 2014, compared with 12,000 in 2003. Those numbers, combined with a slow-growing economy and the desperate shortages these industries talk about, suggest that some part of this story is being overlooked.

A ‘smarter’ service sector

The blue-collar stigma is a frequent scapegoat, but some in education argue that employers are not doing enough to attract, train and retain workers. And when workers emerge from technical schools or marine service classrooms, employer expectations are often way too high, says American Boat and Yacht Council education director Ed Sherman. The breakdown, he fears, ultimately winds up affecting the end user — the boater — and he worries that it could push some to abandon boating and migrate to other recreations.

“I got a letter just last week from a guy who bought a brand-new pontoon boat,” says Sherman. “He said it had a lot of things wrong with it, and the dealer basically said, ‘Call the factory.’ My gut tells me the poor dude is not alone. I bought a new boat in 2012 and wasn’t particularly thrilled. I was able to circumvent the dealer and go to the factory, but I’m the exception to the rule.”

As systems become more sophisticated and more integrated, workers are being tasked with something they haven’t dealt with in the past — making these complex components work together smoothly, says Sherman. For that reason the ABYC has teamed with the National Marine Electronics Association to provide more comprehensive training for workers in three-day class settings — not for novices, but for technicians who already have field experience.

“The manufacturer is full-on with us,” Sherman says. “But it’s been difficult getting the dealer network to realize the value of this training, even though the product line has changed exponentially in the last 10 years.”

Starting in 2017, the program will require some practical experience for students to gain certification in at least some of the courses, Sherman says. “As good as the classes are, there’s nothing like digging in and getting into it in the field. But the industry itself has got to come to the plate more than they have. They don’t realize how important it is to build a fresh, new, smarter service sector.”

Great expectations

Not only should employers be more willing to invest in workers, but they should also have a realistic idea of what the training will provide, Sherman says. “People have to manage their expectations,” he says. “We’re constantly facing the mindset of, I’m not gonna spend $1,000 to send a guy to school because he’s never going to return to the industry, or he’ll go work for my competitors down the road, without thinking, maybe the 50 cents more he’s making there per hour is worth it for him to keep that worker.”

Employers have the impression that if they pay to train an employee and they passed a test, they should not be making mistakes, says Mike Spyros, who runs the NMEA program certification courses. “It’s up to owners to understand — it’s management and it’s work,” he says.

Spyros has worked in the business since 1978 and got involved in education in 2009. He quickly became an advocate of hands-on training as opposed to classroom education — minimum requirements for learners to practice safe and reliable workmanship. That is very costly — and that’s on the electronics side, where it’s easier to bring tools into dealerships and manufacturers for training.

“One of our blue-sky ideas at NMEA is, we want to have our own building, with 10 trainers, and teach people connectors on wires, hydraulics, all the things we’d like to have. But we have to assess how big is the audience, versus the investment.

“Just because a guy passed a test doesn’t mean he knows everything,” Spyros adds. “And it doesn’t mean he’s not lazy. There are a lot of details you can cut corners on. I have my own business, and I do this for the NMEA. Those things are important, but you have to be a motivated person to do that.”

Educated but not prepared

Despite a culture — from parents to school systems — that emphasizes the importance of higher education, only 14 percent of Americans think college prepares students for workplace success, according to Gallup. Only 11 percent of business leaders agree that college graduates are adequately prepared for the work force.

Ashley Lamb-Sinclair, a high school English teacher who was named Kentucky’s 2016 teacher of the year, is the founder and CEO of Curio Learning, which offers a stark contrast to the Common Core principles American education is built around.

She suggests that by trying to ensure that all children receive the same learning opportunities, we don’t take into account individual preferences or talents. “Vocational programs can be beneficial as long as they are not attached to bias and therefore track ‘non-academic’ kids into trades classes because the students have nowhere else to go,” Lamb-Sinclair writes in The Atlantic.

A Gallup-Purdue study of more than 30,000 U.S. college graduates shows that one of the key influencers in obtaining a degree — and thriving after graduation — was having a mentor who encouraged students to pursue their dreams. Put another way, their passion should not be treated as a second-rate option just because it has to do with working with their hands. That encouragement went along with having an opportunity to work on a long-term project, as well as an opportunity to apply what they’d learned in a job or internship.

“Why should students drag their feet through traditional school before they get the chance to do what they love?” Lamb-Sinclair wrote. “Integrating validating experiences into high school rather than hoping that universities will provide them down the road gives opportunities for students who feel ignored, disengaged and disregarded to recognize the virtue of their talents and pursue them happily — and with pride.”

Not all created equal

But overhauling the school system is not a short-term fix to an immediately pressing problem, although it’s encouraging that schools are starting to integrate classes such as woodshop into the mandatory curriculum in some states, such as Washington and Massachusetts. The ABYC and NMEA are trying to offer training in a quick and affordable timeframe to help provide immediate solutions.

Once students move on to higher education and training, it can be difficult for them to discern one program from the next.

“I feel very lucky that our ABYC certifications have kind of risen to the top,” Sherman says. “There are a lot of reasons for that. One is, I’ve been very strict with not compromising. But we did come to a realization that we need to raise the bar yet again because there are a lot of good test-takers out there who can cause bodily harm with a pair of pliers, and we don’t want them working on someone’s boat.”

The ABYC and the NMEA have worked with the National Occupational Competency Testing Institute, and Sherman believes they are the only two programs for service technicians to have done that. The institute’s process is rigorous and is a recognized credential within the legal community.

“I think consumers need to know the difference between a certification and showing up to class and getting a certificate of completion,” he says.

“I’ve been doing this 30-something years, and there’s nothing easy about what we’re doing,” Sherman says. “The one way to educate people well is through on-the-job experience.”

That could be through the development of mentorship programs offered by small business owners — designating one person to train some of the less experienced people.

“It sounds simple, but it’s not so simple for some of these small business owners,” he says. “They have real trouble realizing it could be a real benefit to the business in the long haul.”

That’s in part because dealers have been so strapped since the Great Recession, often working with a bare-bones staff and wearing many hats, and they worry that even if they make a work force investment, it might result in trained workers leaving for another industry. That, Sherman says, is not a completely unfounded concern.

Factory work of the past

U.S. workers are a good value because they’re well educated and not that expensive, Livingston says. “Name a foreign car manufacturer that doesn’t have a factory in the United States these days,” he says. “They all have factories in the Southeast or the Midwest. The cost of our labor is probably one of the lower ones in the world right now. They realize that, and then there’s none of the shipping and freight.”

A New York Times Magazine article recently examined why U.S. politicians are “obsessed” with manufacturing. “Manufacturing retains its powerful hold on the American imagination for good reason,” writes Binyamin Appelbaum. “In the years after World War II, factory work created a broadly shared prosperity that helped make the American middle class. People without college degrees could buy a home, raise a family, buy a station wagon, take some nice vacations. It makes perfect sense that voters would want to return to those times.”

Because of automation there are far fewer factory jobs, but the value of things made in the United States reached a record high in the first quarter this year, Appelbaum maintains, even after adjusting for inflation.

In many of the remaining factory and technician jobs that companies are struggling to fill, one has to wonder whether — as in the days after World War II — a person without a college degree can buy a home, raise a family, buy a station wagon and take some nice vacations. That does not apply only to factory work, but also to several other sectors of the U.S. economy, such as manufacturing and boat service.

“The economy is changing. It’s moving very fast, but it doesn’t mean that stalling or going in reverse is going to help,” says Caroline Freund, a senior fellow at the Peterson Institute for International Economics and former lead economist in the research department at the World Bank, as well as the International Monetary Fund, speaking on a Boston public radio program titled “Global Trade: Fact and Fiction.”

The comment section of a recent article in MinnPost, a nonprofit Minnesota news organization, that discussed how the state of Minnesota was subsidizing and helping businesses attract more people into their dwindling manufacturing work force was telling. The story discussed grants and raising awareness among high school students that these jobs are plentiful and aren’t as dirty or stigmatized or dangerous as they used to be.

“Interesting how compensation isn’t mentioned by the interviewees anywhere in the article,” said a commenter who identified himself as Anthony Walsh. “Asking someone to go through the effort to get a degree or certification that may not pay enough to cover student loans, rent, insurance, car payments and the other domestic necessities of life in this country sounds like a tall order.”

Subsidizing wages

A second commenter, Henk Tobias, reiterated that sentiment by mentioning a vague reference that the job “pays more. Pays more than what? It doesn’t say. It’s typical of this type of complaining about not being able to fill jobs; they never seem to add the part about not being able to fill jobs at the offered rate. I have a simple solution: quit with the outreach, stop spending tax money trying to coerce students into going into manufacturing and START PAYING A DECENT WAGE! That’s it; it’s that simple. Pay a decent wage, and word will get out.”

Appelbaum takes this sentiment a step further, writing that this kind of “myopic focus on factory jobs” distracts from a much simpler way to help working Americans — improve the conditions and pay of the work they do. He suggests that instead of bolstering training programs for such jobs, the state and federal aid would be more helpful if it were used to enable employers to improve working conditions and raise wages.

According to the Bureau of Labor Statistics, there were 64,000 steelworkers in America last year, and 820,000 home health aides — more than double the population of Pittsburgh.

“Next year, there will be fewer steelworkers and still more home health aides as baby boomers fade into old age. Soon we will be living in the United States of Home Health Aides, yet the candidates keep talking about steelworkers,” Appelbaum wrote in the New York Times Magazine article. “Many home health aides live close to the poverty line. Average annual wages were just $22,870 last year. If both parties are willing to meddle with the marketplace in order to help one sector, why not do the same for jobs that currently exist?”

That shift could make a big difference in helping boat dealerships and manufacturers offset the costs of training, provide raises and added benefits for existing employees, and update equipment that would make jobs safer and more comfortable.

Boat industry harder hit

Sherman says that although finding technicians is becoming difficult in all industries, that’s compounded by the fact that marine jobs sometimes pay less than in other industries and can be accompanied by less favorable conditions.

“There are a few things going on — working conditions, wages and, in a lot of cases, just employment advancement opportunities,” Sherman says. “You’ve got a guy 50 years old who’s been crawling through bilges a good part of his life. He’s starting to get some aches and pains. Wouldn’t it be nice to see a career path that leads to an office as he ages out?”

Although boat-related jobs by nature involve some amount of exposure to unpleasant conditions, the industry has come a very long way, Sherman says. But still the odds can stack up against it.

“Picture it this way,” Sherman says. “An 18-year-old kid who’s pretty good at working with his hands has a choice.” He can pick a program teaching him to work on cars, go to a new dealership and be in an air-conditioned bay where a hydraulic lift brings the work to him — so he doesn’t have to lift heavy objects or cram himself into tight spaces. “And in a relatively short amount of time, he can be making in excess of $100,000.”

If the same kid goes to work at a full-service marina, “He’s scraping bottoms even after he’s graduated from the program. He’s dodging dust and fumes in 98-degree ambient temperatures. And if he doesn’t complain too much he has the privilege of jumping down in the bilge, where it might be 128 degrees,” Sherman says.

“If he really behaves himself, in 10 years he might be making $30 an hour,” Sherman says. “And that’s a fact. I’m not making any of this up. Therein lies a big part of the issue. Our employers really need to do more to attract youth. And I’m told that right now they’re having the same amount of trouble getting new-generation kids working with automotive. All of them are having a hard time recruiting good kids, the kind of people you really want doing the work.”

Marine vs. aviation

Because the automotive industry is so large, we thought the aviation industry might be a better comparison to the boating industry. The National Business Aviation Association has 11,000 member companies — all of which use airplanes as part of their business for one reason or another, says NBAA communications vice president Dan Hubbard.

Comparing maintenance staff and workers across the board is difficult because “it varies quite a bit from A, one company to the next and B, what the complexity of the plane is,” Hubbard says.

Some companies might need one plane, another several; one might need a turboprop plane, another a Gulfstream jet. That compares to service technicians in the marine industry, as those jobs also greatly vary (think: working on a megayacht versus a small aluminum fishing boat).

The aviation industry spends a lot of time focusing on and trying to address work force shortages of its own, Hubbard says. “That concern is spread across nearly all occupation types, whether it’s technicians, pilots, schedulers, dispatchers — people are passionate about learning why,” Hubbard says.

One reason is the aging boomer work force, which is putting pressure on most every sector. Another is one of the boating industry’s common laments: the lack of awareness outside the industry that these jobs exist. And then “a lot of people get exposed to aviation and for various reasons get pulled toward major airlines,” Hubbard says. “They’re never exposed to the idea that there are some of the same careers in business aviation.”

There are stark differences between the two, as well. For one, the average wage of aviation maintenance technicians is $92,865. That figure is the average technician wage, from entry level to senior, and it includes salary, plus any bonuses or overtime hours worked. It does not factor in a valuation of benefits.

The marine industry has no technician compensation average to quote, but anecdotally, it is vastly less than $92,865.

The NBAA does a compensation survey of member companies annually to help flight department managers know what competitive rates are, Hubbard says. These data are either not gathered on a widespread basis in the marine industry or they are not made publicly available.

“There may be some bearing on the fact that under FAA guidelines the airplane has to be operable at under a 0.99 percent failure rate,” Hubbard says of the reason the aviation industry pays so well. “The failure rate has to be about zero. The technicians working on these planes, they’re working to that kind of a standard. Aviation is probably the most regulated industry for safety reasons.”

A failure in the air has a lot more potential for catastrophe than one on the water, he points out.

True — though probably not encouraging to people using their boats on the weekend — and illustrative of a stark contrast between the aviation industry and the marine industry in terms of regulation.

Treat them well

The NBAA hosts several events each year to try to attract more young people to the industry, Hubbard says. “A couple of those are very significant in size. They’re a venue to draw young professionals to the industry. We try to construct events and programming just for them, and let them know if they’re not in it, why they should be.”

The group also offers scholarships for initial training and continuing training. Sherman says he would like to see boating trade groups spend more on education, as well as these types of events.

Sabre and Back Cove have experienced work force shortages in part because unemployment in Maine is under 3 percent, says Bentley Collins, vice president of marketing and sales for the brands. “We’ve been struggling up here,” he says. “That lack of available labor hit our shop at Sabre, and it was the first time we’d experienced that in 25 years.”

So the company completely revamped its wage policy and increased compensation across the board. “We’re also more generous with medical and dental programs. We offer education programs,” Collins says. “There’s a whole bunch of stuff we do, and you can see the effect of that coming now.”

People say the problem with the American economy is that wages are stagnant, but that’s not the case in Maine, Collins says. “The wage pressure in the past has been 3 percent per annum, but that’s certainly up in the 5 percent range now,” he says. “I’d imagine some nearby competitors have tremendous pressure on their wages at this time. We’ve gone from saying this is a job to saying this is a career. The only way we can move forward with the business is if we sell careers and not jobs.”

Viking Yachts in New Jersey is another employer that tends to exceed regional businesses in terms of compensation (and probably not coincidentally, a company that has a robust work force). Some employees have been working there for 50 or 51 years — “and the company’s only 52,” says Viking communications director Peter Frederiksen.

“This building boats isn’t easy work; it’s pretty hard, so you always have to put yourself in the shoes of the people doing the work,” Frederiksen says. “One of the things that happens here is, people always have the best equipment to work with. In the metal shops, we have an easy environment. They’re not lying on their back welding. They’re doing it at standing-room height, so we’re making the work environment good. That helps people to show up.”

Investing in people

The custom aspect of the production builder’s boats seems to “breed enthusiasm,” Frederiksen says. “People like that challenge,” he says. The work isn’t for everyone — some don’t make it 30 days, meaning “it’s just not for them.” But those who stay beyond the 30-day mark are typically worth investing in because they are in it for the long haul, Frederiksen says.

“There’s a saying around here we have about building a better boat every day, so everybody has a vested interest in that because it’s just to their advantage,” he says. “It means they’ve got more work to do.”

The company is very flexible in terms of what people can do, as well as scheduling. “Some people work on split schedules or reduced hours,” Frederiksen says. “We’ve got a great health services department. This company places the most value on the people. Bob Healey, one of the owners, is fond of saying, ‘Take all my money, but don’t take my people.’ That’s the way they treat people around here.”

Not only are the workers well compensated, they also have health, dental and vision coverage, as well as profit sharing. “We’re a rare animal in New Jersey, and we’re a rare thing in the marine industry,” Frederiksen says. “We’re lucky in that we’re able to find enough people that want to do this.

“In Atlantic City, with the casinos closing, we were able to hire electricians and other people because a work force is not easy to acquire,” Frederiksen says, referring to 2014, when four casinos — The Atlantic Club, Showboat, Revel and Trump Plaza — went defunct, taking 8,000 jobs with them. There was a learning curve in hiring people from outside the industry, but “we got good people who make a good living with good benefits who can support their families,” Frederiksen says.

Incentivizing and training

Work force competition is fierce in the Seattle area — headquarters to such business giants as Starbucks, Amazon and Boeing. So Fluid Motion, the parent company of Ranger Tugs and Cutwater, does unique things to attract and retain workers, says Livingston, its president.

“There is a ton of opportunity for expansion in our two boat lines,” he says. “It’s more of a matter of how fast we can get to it. We keep trying to add people all the time. The limiting factor is getting everybody up to speed fast enough. All those companies based here, they do drive up the price of employees. It’s competitive to find good people, for sure.”

A few of Livingston’s staff left to work at Boeing, thinking they’d earn more, but a month later came and asked for their jobs back.

“We have an incentive system based on how many boats get out the door every month,” Livingston says. “If they hit the goal, they can earn an extra paycheck each week. Some guys will earn 20 to 25 percent more than their annual pay; that’s not uncommon.”

A little more than 200 people work at the company, and this year they’re looking to add 40 or 50 more to accommodate the company’s growth and all of the new models slated for 2017.

“It’s going to be a tall order, given what’s out there,” Livingston says. “We’re actually starting to work with a couple of schools, and some state programs. We’re going to set up a training facility to start training ourselves. We can’t find experience anymore, so we’re just going to start doing it ourselves.”

Once people get in the door and into the incentive system, they typically stay. But as in Maine, finding people in his region is tough. “I think it’s twofold,” Livingston says. “I think we could do a bit better job of participating in things like job fairs. We need to have a little more fanfare and promotion on our side, and say, ‘Look, this is a great career. You can do really well and support a family on what you make with us.’ ”

Second, the whole country is challenged finding people for trade careers with the growing emphasis on science, technology, engineering and math — often referred to as STEM. “Everybody’s all about computers,” Livingston says. “It’s like when the whole country went through a lawyer craze. Unfortunately kids don’t learn things like that in school anymore. Or from their dads in the garage, because nobody works on their car anymore. It’s all done on a laptop.”

He was pleased when local schools resurrected their woodshop programs. “I can’t tell you how many guys or gals show up here looking for work, and they barely know how to work a screw gun,” Livingston says. “They’ve never used tools. They can learn it, but they come with a different skill base.”

As sophisticated as airplanes

Livingston got an idea from Starbucks when his wife’s cousin took a high-level management position there. “It was the same with her as everybody else,” he says. “Everybody starts as a barista. You learn how to serve coffee. She had to go do that for two or three weeks before starting in her new role. One thing I want to do is start a class and send everybody through it. The biggest thing we do is on the lamination side of things, building fiberglass parts. I think it really helps all the engineers, the sales guys, managers, to know how it works and learn what you can and can’t do. You have to build a good product. Obviously building a boat is more complicated than a cup of coffee, but a lot of the principles still remain.”

Fluid Motion is not alone in recognizing that it might just be up to companies to provide their own training.

“MarineMax is going to try and set up its own MarineMax University program, and we’re going to try to help them with that,” Sherman says. “They’re big enough to realize we’re going to lose all these trained people when the boomers retire, and then we’re screwed. But that awareness is not universal.

“I don’t want you to think I’m dumping on the marine industry,” Sherman adds. “We’ve got so much interesting stuff coming at us, driven by the market demand. Boats are as sophisticated as airplanes at this point. This is both an opportunity and an issue. But I don’t think the products with this degree of sophistication are going to go away just because people can’t find help to work on it. At the same time, if our expectation is that we’re going to grow our market with any kind of real numbers, we’ve got to have a work force that’s able to deal with this highly sophisticated equipment. It’s becoming increasingly hard to fulfill that.”

This article originally appeared in the December 2016 issue.