An aging industry: People & Companies

The cutting tool industry is dealing with the very real challenge of an aging workforce. Baby boomers, the people in our industry with the most institutional knowledge and skills, have been retiring at a rapid rate. According to a January 2020 report from the U.S. Bureau of Labor Statistics, the median age of workers in our industry was about 49 — and that was almost two years ago, before the pandemic. We need to recruit, train and retain a lot of young people.

Compared with other industries, few young people choose to join our industry. Our talent gap quickly could worsen and result in a serious shortage of many critical skills. However, the more progressive that our industry becomes, the more success we will have attracting younger employees in every discipline.

Appealing to engineers is particularly problematic. Colleges and universities promote four-year engineering programs with the promise of working with organizations like NASA or in high-tech, with graduates destined to become creative designers and engineers who have many flashy opportunities. The reality is that graduates enter the
workforce and realize that there are not enough of those glamorous, high-level, exciting design/engineering jobs. But there are opportunities — plenty of them — in manufacturing industries like cutting tools.

Young engineers who consider other manufacturing industry segments, including automotive and tier one suppliers, will look to cutting tools if we make the environment attractive.

Baby boomers, the people in the industry with the most institutional knowledge and skills, have been retiring at a rapid rate.

Something missing from our business is an internship or apprenticeship program. I don’t mean just the traditional trade segments — apprentice, journeyman and master — but a cross-discipline approach involving engineering, sales and marketing. Having a true career path for all the talent in our business would make it much more enticing. Attracting young workers in every discipline is important to make our industry progressive and aspirational. The shortage of engineering talent is reflected in the other disciplines that are critical to our industry, including sales and skilled trades.

I look forward to the day, not long from now, when young engineers, machinists, salespeople and marketers envy their friends who work at ARCH Cutting Tools. We will foster such word-of-mouth among prospective personnel. This is a very tribal, grassroots but effective approach to develop talent in our business.

The aging workforce causes a lot of risk for organizations. It’s essential to manage the transfer of knowledge from senior employees to new ones and stay engaged while recruits work through the transfer and become comfortable with their responsibilities.

Surviving Adversity and Recruiting Through It

Since I’ve been in the business, we’ve experienced significant downturns. There have been situations in which it would’ve been easier to normalize profitability by cutting the workforce than by making other changes. This is perceived as the quickest way to rationalize the bottom line.

But what actually happens is that the highest-compensated individuals, the ones who have been around the longest and have the most knowledge, experience and skills, often are lost. Even if those people are laid off temporarily, they tend not to come back.