National industry certifications are closing the skills gap

Companies in manufacturing and closely related materials handling/distribution industries are rightly concerned about the shortage of workers with the higher skills needed in today’s technology-driven economy. According to a 2015 Deloitte-Manufacturing Institute Report, 3.5 million manufacturing jobs will need to be filled in the next decade, but two million are expected to go unfilled due to the talent shortage. A 2015 Material Handling and Logistics Industry job report (prepared by APICS, AST&L, MHI and WERC) predicted a shortage of workers with the specialized skills needed for the industry to keep pace with technological change.

An underlying cause of this skills crisis has long been the misalignment between the skills needed by industry and knowledge provided by the nation’s schools. This problem persists: A 2014 Gallup survey showed that 96% of chief academic officers of colleges and universities were confident their schools were preparing students for success in the workplace, but only 11% of business leaders shared that confidence. A Wall Street Journal article at the time characterized this survey outcome as the “vast disconnect” between school and work.

For years, one of the strategies that companies have used to communicate their skills needs to the education community is standards-based certifications. MSSC is an example. Formed under the National Skill Standards Act, the MSSC created a large coalition of some 700 companies, 4,000 front-line workers, 15 national trade associations, and 400 educational organizations to develop industry-wide core technical skill standards and related certifications for front-line work in advanced manufacturing and supply chain logistics. Approved officially by the federal Skill Standards Board in 2001, those standards, which MSSC updates annually, formed the substantive foundation for the MSSC Certified Production Technician (CPT) and Certified Logistics Technician (CLT) training and certification programs.

The nation’s manufacturers have continued this strategy ever since. In 2009, the National Association of Manufacturers (NAM) created a NAM-endorsed Skills Certification System. In 2014, a NAM Board-level Task Force Report on “Overcoming the Manufacturing Skills Gap” called upon the nation’s manufacturers to “speak with one voice” by using national standards and certifications as their way to communicate with the nation’s schools. The report specifically recommended that manufacturers use MSSC CPT to engage with the nation’s secondary schools.

One of the results of this industry focus on industry-recognized certifications is the increasingly rapid use of them in the nation’s schools, beginning with secondary schools and into post-secondary, especially at the nation’s two-year community and technical colleges. Some of the leading industry certification bodies available nationwide are:

• Manufacturing: MSSC, NIMS, AWS, SME
• Distribution-Logistics: MSSC, APICS
• IT: CompTIA, Microsoft, Cisco Systems
• Auto Service: ASE
• Construction: NCCER
• Petroleum and Gas: API
• Quality Control: ASQ

Another example of the success of these programs is the growing awareness of their effectiveness in helping individuals secure employment in higher-skilled, in-demand, middle-income jobs. Individuals securing full certifications from these organizations are achieving high success rates either in going directly into employment or in continuing on to higher education in the same career pathway. For example, an industry-supported high school program in Wisconsin, GPS Education Partners, embeds MSSC CPT and is experiencing a 92% job placement rate.

Certifications are becoming so successful that the general public is beginning to see them as more effective than college degrees in helping students find productive employment. An October 2016 Pew-Markle Survey asked 5,000 Americans to rate the value of different kinds of education to secure employment in today’s economy: 58% chose a two-year degree, 67% chose a four-year degree, but 78% chose “professional, technical certificate.”

From the employer perspective, industry certifications are good news. Recruitment costs are much reduced because the skill levels of job applicants are well documented and applicants are sufficiently interested to secure these credentials in the first place. Remedial training costs are close to zero because most industry certifications require a good foundation in math and locating information.

Some employers express concern that if they encourage their workforce to secure certifications, they will migrate to other, higher paying companies. But, our research shows that workers’ loyalty to the company increases and turnover rates decline if the company encourages them to get their national industry certifications. When Ben E. Keith Food Distributors opened a state-of-the-art distribution center near Houston and filled most of their operations jobs with holders of the MSSC CLT credentials, they put out a press release expressing surprise at how much this certification motivated their workforce.

Well-established national certifications are increasingly demonstrating the potential to close the skills gap. To reap the full benefits from this solution, industry and academia have to enhance their support. The first requirement for industry is to adopt a “zero cost” recruitment policy. This means that companies need to inform their own recruiters, area schools, state and federal agency offices—and need to include in their job postings—that they will give preference to job applicants with certifications from well-known, third-party endorsed or accredited national industry certifications.

For their part, schools need to include certification-related courses in their regular course offerings, preferably for credit, and have career counselors brief students on the value of industry certifications in securing higher-wage employment and building successful careers. Collective action by employers and schools will provide a much stronger pipeline of higher skilled workers able to keep pace with technological challenge. In helping to close the skills gap, these measures will enhance productivity, economic growth and global competitiveness of the U.S. industrial base.