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  • Attracting, Developing & Retaining

    Automotive Talent in Michigan

    Kristin Dziczek

    Director, Industry & Labor Group

    CAR Industry Briefing

    23 June 2015

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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 Bachelors Degrees and Above

  • 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 Bachelors Degrees and Above

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

  • 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

  • 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 positionabout 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • Skills in Demand in the CAV Space

    Electrical Engineering Computer Science/Software Engineering Mathematicsgeometry, algorithms Mechanical Engineering Hardware testing/calibration Supply Chain Management/Logistics

    Software Skills: Embedded automotive software

    (including RTOS such as ThreadX and QNX)

    Agile development Linuxbecoming 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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 Didnt Hire That Many People Between 2007-2010

  • 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 pressurewith 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

  • 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

  • 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

  • Kristin Dziczek kdz@cargroup.org