More people have retired this year from Handy & Harman than in the previous five years combined. And at least another 24 employees could retire in the next five to 10 years.
Replacing them wouldn’t be a problem, if their skills were easily transferable to the incoming generation of workers. But in manufacturing, it takes a substantial amount of time to teach the skills the retirees have spent 10 to 20 years learning themselves.
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Even more troubling, says Kevin Bettencourt, human resources manager at the East Providence company, is that there are not a lot of people lining up to fill the holes created by today’s retirees.
That leaves manufacturers such as Handy & Harman – where about 30 percent of the workers are older than 55, and the average age is 47 – in a precarious situation.
“One of the big challenges is identifying internally who the replacements [of retirees] are going to be,” Bettencourt said. “And replacing the employees you’ll be advancing.”
That’s why Handy & Harman invests heavily in its on-the-job training program, he said.
To help supplement training costs, the company seeks grants from state and federally funded organizations such as the Workforce Partnership of Greater Rhode Island. The grants cover 50 percent of the wages for new trainees, Bettencourt said.
For example, if Handy & Harman needed a press operator, and to train one took 1,000 hours at $10 an hour, the grant would cut the company’s cost of the training from $10,000 to $5,000.
Handy & Harman has saved $70,000 in training expenses in the past four years through the program, Bettencourt said.
But Joe Cannon Jr., president and CEO of CAS America, said that even though such grants are available, the number of workers involved and the extent of the training they require make it nearly impossible to find enough funds for training.
And even if a company does find the money, it can take years of experience for a new hire to match the older workers’ productivity, Cannon noted. He said companies have to balance the need for new trainees with the need to implement lean manufacturing principles, to cut production costs and stay competitive.
There’s also a shortage of qualified applicants to begin with, industry representatives agreed.
“We’re not doing a good job at the school-system level to get kids interested in manufacturing,” said Leslie Taito, executive director of Rhode Island Manufacturing Extension Services, which supports small to mid-sized manufacturers in the state.
“Baby boomers are going to retire,” she said. “It’s critical-mass time.”
RIMES started offering free CNC (computer numerical control) training workshops earlier this year, Taito said, because there is no pool of CNC operators for manufacturers in the state, and there is an increasing demand for the skill.
Jonathan Fain, president of Teknor Apex Co. in Pawtucket, said he’s more concerned with the state’s – and the country’s – lack of engineers.
“Most of our chemists and engineers are foreign-born,” Fain said. “We’re not instilling in our young kids [a desire] to go into this industry.”
Handy & Harman’s Bettencourt echoed that sentiment: “It’s absolutely a challenge to find quality employees,” he said.
Yet his company’s predicament could be a lot worse. Because of the quality of the jobs, and the lack of an extensive social safety net, not every employee of retirement age is planning to retire.
Quality control inspector Nancy Allen, for example, is 66. She’s been working for Handy & Harman for almost 26 years.
Though she would like to retire, Allen said, it’s probably not going to happen any time soon, because she isn’t in a financial position that would allow her to support herself on her retirement income.
If she had a spouse or someone to share expenses with, things might be different. Allen said her husband died 20 years ago, leaving her with three children to raise, and she’s been working ever since.
“Ten years ago, I would have thought I could retire,” she said. But inflation continues to chip away at her paycheck, as do health care expenses.
At CAS America, a similar pattern has emerged. “I do find that more people are staying longer,” Cannon said.
