During a briefing at the 75th anniversary annual meeting in October, the results of the VMA’s latest research project were revealed. The Employment Snapshot Report provided insight on the state of employment for VMA member companies, and came about as a result of a representative telephone survey conducted of 37 of the nearly 100 members of the association of valve, actuator and control companies, their suppliers and distributors/channel partners.
Results of the survey mirrored closely what would be expected as a result of the earlier released report that in 2013, members of the VMA will ship $4.3 billion in products, accounting for approximately 80% of the total industrial valve shipments out of U.S. and Canadian facilities. Through this latest survey, VMA estimates that the domestic valve industry (including Canada) employs more than 30,000 people, a 50% increase from a decade ago. Thousands more are indirectly employed by industry suppliers.
Growth in Hiring
More than half of responding member companies reported that their domestic hiring was growing up to 5% this year. Nearly one-fifth expected growth up to 10% and another fifth is planning to grow their ranks up to 16%. Only 3% of valve manufacturers did not expect any growth.
Also, a majority of these firms—two-thirds of which are privately held—have international locations and employees and most have plans to grow their international workforce over the next five years. In fact, 30% of these firms expect more than 10% growth in their international workforce over this time period and China was the most frequently cited location of internationally-based employees, followed by the UK and Germany.
As is the case in many manufacturing sectors, this industry has a seasoned workforce, with employees averaging 44 years of age and 13 years of experience. VMA President William Sandler said, “We are growing and hiring! But the industry is also graying, so keeping up with our talent needs will become more and more important for our members.”
Replacing an Aging Workforce
This challenge was mentioned by several respondents during the survey. One respondent voiced the concerns of many when he addressed the difficulties of finding qualified people to work in the production areas. “We need skilled welders, machinists and valve assemblers,” he said. “It is becoming more difficult to find young people interested in going into a profession where these skills are used. Most younger candidates would rather work in an office or on a computer.”
Another cited the lack of diversity and the loss of institutional knowledge because of the lack of young people coming in to take the place of experienced but aging “baby boomers”. The consensus was that it is a tough industry to recruit for as younger workers want more technology based industries.
Consequently, the older workers are leaving without passing on their information to a younger crew. There simply isn’t time to train and mentor a younger worker before the older one is gone. “It isn’t just the employees that will be gone,” said a respondent. “It’s also their knowledge that will be retiring in the next 5 to 10 years. This will present challenges to find quality and qualified replacements.
VMA and its members recognized several years ago that there would be challenges filling these positions. In response, in 2009 VMA established an in-depth valve education program, Valve Ed, to reach the next generation and generate interest in its careers, attract and train current and future valve employees. Today, the program contains creative components such as Valve Basics in a Box, a “Valve Petting Zoo,” and soon an online 101 valve basics training course to promote valve literacy and to attract and train current and future valve employees.
Health Care Challenges
Several VMA members indicated that they were concerned about the new health care law. The perception is that it will be very expensive, and several worried that it could be a major block to hiring. Their fears seem not to be unfounded, at least according to economist Alan Beaulieu who, in his address to the 2013 VMA Market Outlook in August, said, “The Healthcare Reform Act is going to raise costs for businesses and it will raise the cost of the employee portion to participate in the plan. Businesses and individuals will have less money in their pockets so they will spend less, which means the economy will slow, which means there will be less hiring in 2014.” However, Beaulieu stressed that while it will have a short term negative impact on the economy and hiring, it is not an “end of the world” scenario. It will just take time for employers, including those in the valve, actuator and control industry, to adjust.
For 75 years, VMA members have shown they are more than capable of adapting to changes. Whether it is gearing up for wartime, reaching into space or engineering valves that have made possible the unconventional oil and gas booms in North America, they have found solutions and met the challenges. While the dynamics of the workforce and the way it is hired and trained may change, there is no doubt that the valve industry will continue to adapt and grow to meet the increasing needs of the sectors it serves.