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Witness Testimony of Ms. Emily DeRocco, President The Manufacturing Institute

Chairman Stutzman, Ranking Member Braley and members of the SubCommittee, thank you for the opportunity to testify on behalf of The Manufacturing Institute at this hearing on Lowering the Rate of Unemployment for the National Guard.

My name is Emily DeRocco, and I am the President of The Manufacturing Institute. We are the non-profit affiliate of the National Association of Manufacturers (NAM), and our mission is to support the nation’s manufacturers through solutions and services focused on education, workforce development and innovation acceleration. 

Over the past few months, manufacturing has enjoyed something of a national spotlight.  Organizations all across Washington, from the White House and Congress to major think tanks and government agencies, have been discussing the manufacturing industry and what America must do to maintain and grow its manufacturing base. 

Manufacturing is certainly deserving of the recognition it is now receiving because it is an industry that is truly vital to our economic security. Manufacturing is the leader in generating wealth from overseas, contributing 57 percent of the total value of U.S. exports. Of course, manufacturing also plays a vital role in our national security, building the equipment, machines, and armor that equip and protect our servicemen and women. 

The American public understands how important manufacturing is to our country.  Each year we conduct a public perception survey to understand how Americans feel about our industry.  Not only do they believe that manufacturing is critical to our economic and national security, but when given a choice of selecting any industry to create 1,000 jobs in their backyard, the number one choice is manufacturing. 

But while manufacturing enjoys the support of policymakers and the public, manufacturing companies face a serious challenge -- they are unable to find workers who are qualified to step in and contribute to their operations.  In a survey that the Institute just completed, over 80% of manufacturers reported a moderate-to-serious shortage in skilled production workers.  80%.  Nearly 75% of manufacturers say that this shortage has negatively impacted their ability to expand, costing us an incredible number of jobs at a time when jobs are desperately needed.  Perhaps most alarming though is that, because much of the current workforce is quickly approaching retirement, over two-thirds of manufacturers actually expect the situation to get worse in the next couple of years. 

This has led to a situation where 5% of all jobs in manufacturing are unfilled because companies cannot find workers with the right skills.  In real terms, that is 600,000 open jobs today in manufacturing.

Those are some frightening results and make clear the threat that a lack of a skilled workforce poses to manufacturers.

It is widely accepted that the skills obtained in the military, from personal effectiveness attributes such as integrity and professionalism to more technically defined skills such as process design and development, are in abundance among separating military personnel. However it has traditionally been a challenge to directly align the skills developed during military service to the job codes in the private sector. In addition, the services offered through the Transition Assistance Program vary base by base…command by command.  Traditionally the military has focused on retaining members, not helping them transition out.

So we have two problems…The Transitional Assistance Program is inconsistent and often outdated in its attempt to help separating military and manufacturers want access to a highly skilled labor force.  

Fortunately, we now have a new system that will help with both of these challenges. In partnership with a company called Futures, The Manufacturing Institute has created an online tool that we’re calling the U.S. Manufacturing Pipeline.  It will provide the information for separating military to learn about careers available in advanced manufacturing, locate the schools and programs that teach additional applicable skills, and find available jobs at manufacturers in every region of the country.

And for manufacturers, it will be the place to find the skilled workers they need to close the skills gap and expand their operations.  Pipeline can allow individual companies to send a message to any individual that has, for example, welding skills,  and lives within a certain distance of their facility and invite them to apply for an open position.  This really is a powerful tool that can change the way manufacturers find and recruit talent, facilitating access to separating military.

Though the Pipeline platform has only been in operation for a short time, and no significant marketing campaign has occurred, over 35,000 servicemen and women are now using the site for their career and employment searches.  This is entirely through peer-to-peer and viral marketing and demonstrates the quality of the product.  And this number is set to increase dramatically.

The Defense Department is preparing a major advertising campaign to reach over 1 million Armed Forces Reserve and National Guard personnel and encourage them to sign up with Pipeline.  By demonstrating success with this group of servicemen and women, we hope that, through our partnership with Futures, we can engage with the Transition Assistance Programs for each of the services to reach all active duty personnel who are nearing their transition date, offering manufacturing jobs as an immediate career opportunity for all men and women who have served in uniform.

Finally, our longer term strategy for the U.S. Manufacturing Pipeline includes engaging with community colleges across the country that offer programs that provide national industry skill certifications.  This will allow transitioning military personnel to easily find any additional education and training needed to work in manufacturing.

I’m certainly excited about this and believe we are very close to a National Talent Solution for manufacturing.  Our manufacturers need the skilled workforce to compete.  Our separating military need good jobs.  And our country needs manufacturing for this to be another great American century. 

Thank you for the opportunity to join you today and I’m pleased to take any questions.