By Angela Rose | May 23, 2023
The manufacturing sector is on fire in Arizona, to say the least. According to a recent report by Common Sense Institute Arizona, a non-partisan research organization, the state's manufacturers added 2,000 jobs in March of 2023 alone. Annual AZ manufacturing job growth has averaged 3.6 percent since 2017, with direct sales and output by the state's manufacturers reaching $77.6 billion in 2022.
Six percent of Arizona's total workforce is employed in the manufacturing sector -- and the need for more workers is ever increasing. Nationally, more than 2.1 million unfilled jobs within the sector are expected by 2030 -- and not just due to a shortage of skilled workers. According to the National Association of Manufacturers, many manufacturers are struggling to get even entry-level job candidates through the door.
What can Arizona's manufacturers do about this situation? It's a question that needs to be answered in order for the sector to continue to thrive. At the Arizona Tooling and Machining Association (ATMA), members are betting on a possible solution: the Skill Up Arizona Apprenticeship and Award Foundation.
Originally launched in 2009 as the Arizona Precision Manufacturing Apprenticeship Program, the foundation was recently given a glow-up with a fresh name and the addition of a scholarship and award feature, both of which the ATMA hopes will help them appeal to a broader set of potential apprentice candidates.
CompanyWeek recently spoke with Rodger Shepard, president of the ATMA, and Rick Hansen, director of apprenticeship operations at Skill Up Arizona, to learn more.
CompanyWeek: Major companies moving to Arizona from other states frequently make the news. How would you describe the current state of manufacturing in Arizona along with the state's workforce needs?
Rick Hansen: If you look at the 2020 to 2023 forecasts for Maricopa County, the highest job growth is going to be first in hospitality, second in construction, and third in manufacturing. Manufacturing has always been in the top tier. The 10-year forecast still shows 2 percent to 2.9 percent growth in manufacturing. The number of [manufacturing] establishments in the industry continues to grow, too. And there's the increasing challenge of finding workers. But we're not having an export of companies out of Arizona. Many are still coming in.
I think it was Richard Florida that many years ago said, "Companies will go where the skilled workforce is." And I think we've shown that to be the case, with a good deal of the reason being the educational institutions we have here in Arizona. Speaking just from the Valley standpoint, both ASU and the Maricopa Community Colleges have shown real strength in providing that skilled workforce that companies need.
Rodger Shepard: I agree, and I really believe manufacturing is very strong in Arizona. As Rick said, new companies are moving in all the time. The numbers are just astronomical as far as what we're going to require as far as a skilled workforce goes. But there's a very easily identifiable group of high school students coming out with little or no idea of what they're going to do next. We have to marry ourselves to these high school programs, these continuing education programs, and have our apprenticeship program be the next step for those kids. It's what the state needs to continue this growth in manufacturing.
CW: Your website states that Skill Up Arizona provides a comprehensive apprenticeship program in the area of precision manufacturing including CNC machine operation, CNC precision machining, CNC programming, milling and turning, and tool and die making. How does the program work?
RH: We're registered with the state of Arizona and the U.S. Department of Labor as an authorized registered apprenticeship program with five occupations. Three of the occupations are competency based, and two are time based. Apprenticeships run from two to five years. We graduated seven apprentices last year and are graduating three later this month.
My job, and that of one of my colleagues, is to make sure [program applicants] understand the requirements. They have to be 18 years of age or older, have a high school diploma or GED, and pass the nationally validated mechanical aptitude test with a score of 70 percent or greater to get into the program. Then, when an organization says, "We want to bring in an apprentice," we essentially provide them with candidate information including resumes and the mechanical aptitude test scores. [The employer] tests them, interviews them, and makes the hiring decision.
During the program, we track their OJT (on-the-job training) hours on a weekly basis. And we meet with the apprentices monthly to make sure they are putting in the hours against the competencies that they're supposed to in order to get their national credentials out of NIMS, or the National Institute of Metalworking Standards.
RS: Rick mentioned the aptitude test that the apprentices take. We're also making an effort to place the folks who don't pass in lesser-skilled positions whenever we can. A lot of the machine shops need clean up people or have jobs at lower skill levels. Putting these people in those positions lifts them up a little bit and may help them really get a spark [for manufacturing].
CW: And why did you decide to add a scholarship component to Skill Up Arizona?
RS: There are some fees and costs associated with being in the program that either the student or the employer bears the burden of. To lift these young people up, we want to alleviate any of those obstructions that we can. Rick knows all about [designing and running] apprenticeship programs, but I know where the money is buried. We've been finding it. There's public and private money to be had that we can use to reward these young people for trying to advance themselves through a career in this line.
CW: How receptive have area high school students been to the program?
RH: Not as much as we'd like, to be honest. In talking to the folks at Mesa Public Schools, they're overbooked in terms of students interested in welding, but not as much in [precision machining]. I think we just need to get out there more and start further down the pipeline, talking to earlier grades about the opportunities and careers in manufacturing instead of waiting until graduation.
RS: It's also the community awareness that we have to bring. We have to educate the public on the fact that it's not your grandfather's machine shop anymore. The precision manufacturing of today has a lot of computer programming, and automation, and robotics. They're not going to be getting their lungs filled with smoke and dirt because it's not what it used to be -- but we have parents that don't understand that. Raising awareness of what a career in precision machining and manufacturing means in the 21st century is a big part of the outreach work we're going to be doing over the next 12 to 18 months.
CW: So far, have the apprentices who have trained with the manufacturers who participate in the program stayed on as employees?
RS: That has been my experience. We have one [at Cleveland Electric Laboratories] that has been here three years now since he completed his two-year apprenticeship with us. I think they stay in the industry at the very least.
RH: Most of the companies wait until one apprentice completes the program before bringing on a new one. It isn't a backfill but saying, "Hey, this has worked so well that we're ready to bring on one or two more." That suggests, to me, that they haven't lost people. In many cases, the apprentices are not working on the floor anymore. They're actually managers.
CW: If manufacturers in our audience are interested in taking on an apprentice, how can they get involved with the Skill Up Arizona program?
RS: They would reach out to skillupaz.org to start. We were designed to service the members of the ATMA, but as a 501(c)(3) organization, we're not limited to that. We can help any manufacturer in precision manufacturing around that state that has apprenticeship needs. And we'd be glad to help them. We want to reach out beyond our 45 or so ATMA companies and help grow the precision manufacturing employee base as best we can.
Angela Rose is executive editor of CompanyWeek. Reach her at email@example.com. Learn about additional workforce development efforts in Arizona in these interviews with representatives from the Quick Start Semiconductor Technician Training Program, Southern Arizona Manufacturing Partners, and Pima Community College.