A little more than a decade ago, Packard Instrumental Co., a stepchild of United Technologies Corp., was suffering from neglect. These days, it is suffering another stunting problem.
In 1986, Canberra Industries of Meriden, Conn., bought Packard, with its main manufacturing plant in Downers Grove. Packard makes the high-tech equipment that biotech and pharmaceutical companies use to ferret out new drugs.
“We wanted to be in the position where whatever markets we were in, we wanted to be the No. 1 or No. 2 company and excel,” said Packard President Richard T. McKernan.
Through partnerships with innovative inventors and its own “high-quality” work force, Packard has accomplished that and is ready to soar to new heights. But it can’t, because of one not-so-little problem–a lack of skilled employees.
There are “more opportunities than we can pursue,” said McKernan, adding, “We don’t have enough computer and mechanical engineering talent to go after everything that is out there.”
More and more executives are voicing this lament.
Throughout the Midwest, “there’s a real mismatch between the available (work) force and the types of industry and jobs we’re seeing growth in,” said Erin Fossett, senior domestic economist for First National Bank of Chicago. Companies “are snatching up any quality people they can find.”
In the latest survey of the Chicago Federal Reserve district, which stretches from Detroit to Iowa’s western edge, the Fed bank reported that “shortages of skilled labor continued to be a problem in most places.”
A number of factors are working against this problem getting resolved soon.
The economy in California, with its high-tech centers, “looks to have bottomed out,” Fossett said. As a result, fewer displaced skilled workers from there are seeking jobs in this area. “Housing prices appreciating at double-digit rates in this region” makes it harder still to attract from high-tech areas on “either coast,” she added.
But the most fundamental problem, Fossett said, is “really a training issue.” Schools are unable to turn out enough students with the desired skills.
“We don’t have enough supply to meet the demand,” said Richard Coddington, assistant dean and director of the engineering placement office and cooperative education program in the college of engineering at the University of Illinois at Urbana.
Demand is strong across all engineering fields, but particularly in computer-related fields, Coddington reported.
Over the last five years, undergraduate enrollment has nearly doubled in the U. of I.’s computer science and computer engineering programs, which produced the likes of computer geniuses Marc Andreessen, founder of Netscape Communications Corp., and Spyglass Inc.’s Tim Krauskopf.
“Amen,” echoed John Petrik, dean of career services at the DuPage County campus of the DeVry Institute of Technology. “We could graduate twice as many students (in computer fields) and easily place them.”
“That’s exactly what we’re seeing,” said Rhea Nagle, information director for the National Association of Colleges and Employers in Bethlehem, Pa.
In its annual Job Outlook survey, the association reported Wednesday that employers in the computer and technology sector “will be forced to compete for a diminishing number of new graduates.” Computer and business-equipment manufacturers, the association said, plan to hire 66 percent more graduates this year than last, and computer software development employers plan to hire 36 percent more college graduates.
Such hot demand bodes well for entry-level wages.
Since 1993, starting salaries for computer graduates have been rising 10 percent annually, according to Coddington. The average starting salary for U. of I. graduates entering the work force this year is $38,700, Coddington said, which is in line with figures reported by Petrik and Nagle. Coddington said he expects the average salary for 1997 computer graduates to rise 15 to 20 percent.
The hungry companies run the spectrum. There are, of course, those in the industry, starting with the big ones, such as International Business Machines Corp. and Intel Corp., and on down through the rapidly multiplying high-tech startups.
But as the exploding computer technology creates ever more uses for itself, in turn spawning more jobs, virtually “everybody needs computer people,” said Mary Lu Wasniewski, recruitment coordinator for the University of Illinois at Chicago. They need them, she said, to develop Internet connections and home pages, handle in-house computer operations, do trouble-shooting, provide user support, you name it.
“It’s a buyer’s (job-seeker’s) market,” Wasniewski said, with computer graduates and those already in the job market “playing off one company against another” and commanding attractive salaries right out of school.
Or even one field against another, said Wallace Hopp, director of the master’s of management/manufacturing program at Northwestern University’s J.L. Kellogg Graduate School of Management.
Consulting firms, which are able to offer nearly twice the starting salary that manufacturing companies can, “are snapping up fully one-half of the (program’s) graduating class,” Hopp said. Graduates are starting at consulting firms for $100,000 a year, whereas those joining manufacturing firms may make $60,000. But the situation may be changing.
Despite the salary difference, “we are seeing some of the people peel away from consulting (where job turnover is higher and a lot of travel is often required) and going into manufacturing jobs,” where there is more stability, Hopp said.
So what is a company hungry for highly skilled employees to do?
From Hopp’s perspective, one very basic suggestion: “Bring their compensation in line a little bit more” with consulting firms.
UIC’s Wasniewski added, “Keep your name out there,” keep university placement offices “updated on what your needs are.” She gives Packard’s human resources department high marks for “keeping in touch” with UIC career counselors.
But that still doesn’t address another gap Wasniewski said she sees.
Packard often seeks experienced employees and may be stymied until there are more in the job market. To provide students a “stepping stone” into the job market, Wasniewski said, companies such as Motorola Inc. have developed aggressive internship programs, recruiting some undergraduates between their freshman and sophomore years.
On another level, Hopp said, the National Coalition for Manufacturing Leadership, initiated at the Massachusetts Institute of Technology, helps universities develop programs to “increase the volume” of graduates in manufacturing management. But for many companies that may be putting the cart before the horse, the need being greater for skills in the actual doing.
Fossett at First National Bank has these suggestions:
– That companies work more closely with universities and technical schools “to steer more people into scientific and high-tech fields.”
– That companies explore the possibility of subsidizing educations for students studying engineering and other high-tech areas.
“At some point,” Fossett predicted, “industries will have to look into doing the training themselves.”
Packard’s McKernan has found other considerations may outrank salary for employees looking for greener grass. “Part of the problem we’re having,” he said, “is we’ve hired some good engineers and they were having to drive 30 to 40 minutes to work and they decided they didn’t want to drive that far if they don’t have to,” especially with plenty of jobs five miles from home.
“There’s a lot of mobility,” McKernan said.
