MATURE BUT STILL LEARNING: HOW MATURE INDUSTRIES ATTRACT YOUNG TALENT ENGINEERING TALENT SOARS IN THE PUSH TO BUILD A BETTER AIRPLANE
ENGINEERING A COMEBACK:
ENGINEERING A SOLUTION TO THE TECHNICAL TALENT SHORTAGE
© 2014 Yoh Services LLC | A Day & Zimmermann Company
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WHAT’S INSIDE 03 Engineering a Comeback:
Engineering a Solution to the Technical Talent Shortage
09 Mature But Still Learning: How
Mature Industries Attract Young Talent
13 Engineering Talent Soars in the Push to Build a Better Airplane
ENGINEERING A COMEBACK: ENGINEERING A SOLUTION TO THE TECHNICAL TALENT SHORTAGE
American industry and its attendant need for engineers could be mounting a major comeback due to a highly unlikely cause. The re-emergence of America as a major oil and gas producer is impacting a wide range of industries that are now choosing to locate or expand in the U.S. due to a newly discovered abundance of cheaper energy. Much of the renaissance is due to hydraulic fracturing, a technology first developed and used in the U.S. in the 1940s and now finding unimagined new applications.
We shale overcome Shale deposits buried miles beneath the earth were long known to hold natural gas, but these fuels have only been recovered in recent years with the advent of unconventional new engineering technologies. In North Dakota and Montana, the Bakken Shale produced its billionth barrel of oil in May, and could hold as much as 900 billion total barrels, dwarfing America’s proven 32 billion barrels of oil today. In Texas, the Eagle Ford Shale play produced nearly 3.6 billion cubic feet of gas in the first four months of 2014, and by 2020, could bring 68,000 full-time jobs to Texas alone with an economic output as big as $21.5 billion. Over in Pennsylvania and Ohio, Š 2014 Yoh Services LLC | A Day & Zimmermann Company
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the Marcellus and Utica shale gas plays combined constitute the second largest gas field in the world, and could produce up to 25 billion cubic feet of natural gas per day by 2020. Already, these engineering methods have helped U.S. oil production surpass that of Saudi Arabia.
Impacting a wide range of industries All this activity has reinvigorated employment in the energy sector, which saw a 40 percent surge between 2007 and 2013. But it’s expanding other industries as well. It’s estimated that American manufacturing could add as many as one million workers thanks to the domestic shale revolution and cheaper petroleum products.
A lot of this new employment revolves around petrochemical manufacturing, an industry that relies on hydrocarbons as its feedstock. But it seems that all boats are rising in America’s energy resurgence. It’s estimated that American marine engineers and naval architects will see a nearly 11 percent rise in employment over the next decade as more American flagged vessels shuttle energy and finished product to foreign markets. © 2014 Yoh Services LLC | A Day & Zimmermann Company
Downstream, new pipeline projects, including the hotly debated Keystone pipeline, will fuel employment in America’s heartland as East Coast, West Coast, and Gulf Coast industrial buyers increasingly demand domestic oil and gas.
And there’s even evidence that more traditional manufacturing is returning to America, onshoring from Asian markets. In today’s smart manufacturing economies, where costs are driven more by energy than labor, the ability to capitalize on lower energy costs is convincing component and finished product manufacturers that America is now the land of both lower energy prices and reduced shipping costs to consumer markets.
The return of landmark engineering projects Twenty years ago, highly qualified petroleum or mechanical engineers might have had to move to Norway to design offshore oil platforms or to India to build dams or water purification systems. But with the advent of cheaper energy here in the U.S., landmark infrastructure projects are destined to return to American shores. © 2014 Yoh Services LLC | A Day & Zimmermann Company
Right now there are plans to construct 351 additional gigawatts of electric generating capacity from 2013 to 2040, with 73 percent of it fueled by natural gas. In addition, 1,723 miles of pipeline projects are on the horizon. That doesn’t include the ships to be built on the Gulf Coast, new rail systems throughout middle America, and production facilities that need to be brought online near East Coast consumer markets.
The engineering talent gap All this activity is spurring huge demand for technical and engineering talent as well as project management expertise, much of it on a temporary project basis. “American engineering was among the first industries in the world to benefit from the efficiencies and flexibility of contingent labor,” said Tammy Browning, Sr. VP of U.S. Field Operations at Yoh. “As early as the 1950s, manufacturers and energy companies realized they could move more swiftly and gain more ground by employing nimble talent acquisition practices to deploy teams of contingent workers around the world.”
Many energy companies today are recruiting as many technically trained candidates as they can possibly handle. “Right now we’re recruiting at 20 campuses p. 5
across North America,” said Browning. “For nearly two decades, engineering talent chose other fields of study, such as software engineering, instead of the chemical, mechanical, and process engineering needed to power industry. That’s left a hole in our industrial base.” Today the average age of a petroleum engineer is 49. At the same time, unconventional development requires even more technology engineering know-how.
“The oil and natural gas we are exploring and producing today is much harder to get at than oil and gas was 20 years ago,” adds Browning. “And we’re still 15-20 years away from reaching maximum production in this country due to new development techniques and domestic reserves.”
To reach that, the industry will undertake a wide variety of projects, many of which will be short in duration but high in value. For instance, the drilling stage in the typical hydrofracturing project takes about a month, but then produces a well capable of extracting gas for a decade or more.
This type of project orientation takes a just-in-time approach to talent acquisition. Teams need to be deployed during the life cycle of a project and the inability to find the engineers and technical skills comes with great cost. A single day of
© 2014 Yoh Services LLC | A Day & Zimmermann Company
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downtime in the hydrofracturing process can cost millions of dollars. In component manufacturing a missed delivery date can warrant fines of millions of dollars whether the parts are for car, avionics, or energy customers. In this light, project management, finance, and generalized business skills also take on great urgency.
As such, it’s not just engineering where demand is rising, but also in the support services to ensure constant and profitable production. These include everything from data analysts, financial professionals, and compliance officers to human resources administrators, health and safety professionals, and environmental experts.
A recent study by Monster.com showed that industrial, mechanical, electrical, and civil engineers are most in demand right now. The University of Houston, in the heart of one of America’s highest producing oil and gas regions, has also seen demand for petroleum, chemical, process, and control engineers. And while the number of students studying petroleum engineering is tripling at many universities, just 39 percent of employers are confident they’ll find the engineering talent they need. Adding to the shortfall © 2014 Yoh Services LLC | A Day & Zimmermann Company
are employers that increasingly recruit professors out of the classroom, jeopardizing the rate with which we mine future talent.
Compounding it all is foreign demand for American engineers. The hydrofracturing technologies pioneered in America are now in high demand in countries with similar shale plays, including Poland, China, South Africa, and Great Britain. Technology developed here in the U.S. is rapidly being exported, along with engineering talent, to help these countries capitalize on the same environmental and economic benefits that natural gas has brought to the U.S.
What’s an employer to do?
“And while the number of students studying petroleum engineering is tripling at many universities, just 39 percent of employers are confident they ’ll find the engineering talent they need. “
Employers looking to benefit from the American renaissance should consider the following tactics:
1. Build a talent acquisition pipeline. In order to capitalize on upcoming industrial manufacturing projects, employers need to have many candidates in various stages of the employment process in order to have the right candidate available for the right job at the right time. p. 7
2. Work with a proven contingency workforce firm experienced with attracting and retaining top engineering talent. These are not your typical employees. Many are degreed professionals who wear hard hats for a living and have the engineering, business, and analytical skills needed to manage $100 million projects. Being able to effectively attract and retain this talent takes genuine and deep-rooted knowledge about this industry that comes only from decades of experience.
3. Network with educational institutions. Many are in need of funding and input from industrial partners that want to collaborate to develop the next generation of mechanical, chemical, process, and petroleum engineers. Your involvement could place you first in line for tapping engineers as they exit the stage diploma in hand.
4. Don’t let talent throttle prospects for growth. Companies that will win in the new American Industrial Revolution will be those that understand that human skills and expertise are the keys to advancing technology and rebuilding America’s industrial base.
Š 2014 Yoh Services LLC | A Day & Zimmermann Company
America’s energy comeback carries a cost, and the price is engineering talent. Across industries and specialties, degreed engineering professionals are the fuel for the fire of America’s resurgence in energy, manufacturing, infrastructure, and more. Only organizations with immediate access to talent will be able to see their projects through and realize the next iconic feats of American engineering.
© 2014 Yoh Services LLC | A Day & Zimmermann Company
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LEARN NEW TRICKS Š 2014 Yoh Services LLC | A Day & Zimmermann Company
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MATURE BUT STILL LEARNING:
HOW MATURE INDUSTRIES ATTRACT YOUNG TALENT In talent acquisition for engineering, many buyers are mature industries that understand how to find, negotiate, and retain quality engineering talent. But the changing dynamics of today’s market are requiring some of them to learn new rules in order to make elephants dance.
As one of the world’s first industrialized nations, America has had a mature industrial base for over a century. The country that tamed the west, built the railroads, cracked the nuclear code, and landed the first man on the moon only accomplished these feats through tremendous engineering talent.
But as the American economy transformed into one of consumer products and technology, its industrial base withered. With a new awakening of American manufacturing, however, we are © 2014 Yoh Services LLC | A Day & Zimmermann Company
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learning new tricks to develop, attract, and retain the quality talent needed to get this country rolling again.
Finding elusive technical talent Over the past ten years candidates have been siphoned away from the chemical, process, mechanical, and industrial fields into IT and software engineering. As a result, industrial companies face a massive challenge in finding young people who have the technical skills to change a tire on their own cars, let alone build steel bridges or pipelines. It’s gotten to a point where some organizations have stepped in to educate workers on the job.
“Technical job training programs are helping to fill this engineering skills gap by reintroducing young people to the trades,” said Tammy Browning, Sr. VP of U.S. Field Operations with Yoh.
German glass manufacturer SCHOTT, for instance, offers one of the few apprenticeship programs at its plants in Duryea and Lebanon, Pa. “We set up an apprenticeship program because of a need for new talent as we’ve invested in capital equipment for glass forming,” said Lauren Lake, HR Director at SCHOTT North America of Lebanon, Pa. “We started our program in order to take a more active © 2014 Yoh Services LLC | A Day & Zimmermann Company
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role in training the next generation of workers. Since these new machines rely heavily on highly technical expertise for their operation, the company needed specially trained talent to manage their maintenance, and the best way to do this was to create a program to train promising talent ourselves.”
How mature industries cultivate talent A full apprenticeship program might not even be necessary. While some mature industries might lack the sex appeal of Silicon Valley, old dogs can draw on several new tricks to freshen up their talent pool.
1. Look to tier two engineering schools. You don’t have to join the crowds clamoring for first dibs on the engineering talent graduating from MIT, Stanford, or Michigan. A number of second-tier universities, from Lehigh to Widener to the University of Delaware, develop exceptional young engineers who are just as technically proficient but aren’t pursued as relentlessly as graduates of top schools.
2. Emphasize opportunities. Ph.D.-caliber engineers are attracted to signature, iconic projects that will stand up over time. This is why NASA is the most
attractive employer in the eyes of engineering students. But even earth-bound employers can raise their stature by emphasizing larger opportunities inherent in major projects in order to draw the talent that can help meet America’s industrial challenges now on the horizon.
3. Hire for projects. Find a workforce management firm with long tentacles into industries that not only delivers technical talent exactly when it’s needed, but keeps engineers engaged through project work. At Yoh many of our contingent engineers have worked with us for 20 years or more. That kind of longevity and experience is tough to find, especially on a contingent basis. And yet short-term projects comprise many engineering assignments in mature industries, as well as feed the minds of talent through a diverse set of ever-shifting challenges.
“But even earth-bound employers can raise their stature by emphasizing larger opportunities inherent in major projects in order to draw the talent that can help meet America’s industrial challenges now on the horizon.”
The resurgence of the U.S. industrial economy means mature industries must adjust their approach to talent. With mechanical, process, and other engineers in short supply, a more proactive approach to building talent pools and an experienced contingent labor partner will help employers build the future of American industry. p. 13
FOR THE BIRDS Š 2014 Yoh Services LLC | A Day & Zimmermann Company
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ENGINEERING TALENT SOARS
IN THE PUSH TO BUILD A BETTER AIRPLANE Just over a decade after Orville and Wilbur Wright’s inaugural flight, the first commercial airline carried its single passenger from St. Petersburg, Florida to Tampa on January 1, 1914. In the century since, America’s engineering know-how has extended the range, speed, and size of aircraft to make every corner of the globe more accessible.
But for all the challenges that engineers have solved over the decades, many more remain. Fuel costs, for example, have hampered airline growth, and while prices have leveled off in the past couple years, the $31.1 billion that domestic airlines spent on fuel in 2013 is more than triple what they spent just a decade ago.
Those fuel costs, combined with competitive airfares, are eating into profits. Airlines will make just $5.42 for every passenger they fly this year, a profit margin of 2.4 percent. And this is an improvement over two © 2014 Yoh Services LLC | A Day & Zimmermann Company
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years ago, when airlines eked out a mere $2.05 per passenger. Adding to the struggle, airline cargo revenue has slumped in recent years as customers shift to marine, rail, and ground transportation.
The future of flight As with many challenges in aviation, however, smart engineering could hold the answers to reversing these trends. Right now, some of the best minds in engineering are working to improve airplane fuel efficiency, reduce the frequency and cost of maintenance, and put the next generation of planes in the air in months rather than years. These advances, made possible by technically skilled teams of engineers, are expected to make a measurable difference not only in keeping the airline business aloft, but improving the industry for businesses, investors, and consumers alike.
These initiatives are driven by aircraft manufacturers’ new incremental approach to design. Forgoing major overhauls that might take a decade or more to complete, manufacturers are now emphasizing upgrades that arrive significantly faster, including fuel-efficient engines, composite wings, improved aerodynamic tail assembly materials, and more. Engineering talent Š 2014 Yoh Services LLC | A Day & Zimmermann Company
is also turning to previously untapped resources, such as the masses of data collected by various sensors throughout an aircraft. This information can be used to make flight more efficient in a number of ways, including anticipating maintenance events to keep more airplanes operational, safe, and generating profit.
Building a better airplane The aviation industry is filled with big dreamers who push the limits of mankind and create tools to keep us moving upward and onward. And the engineering talent needed to propel the airline industry further into the 21st century is eager to get to work. Both Boeing and Lockheed Martin are among the top 10 dream employers for engineering students. Yet finding enough qualified, degreed engineers—and at the right moment—could pose the biggest obstacle to the future of air travel.
From internal and external components to avionics and technology, aircraft orders, maintenance, and required upgrades all fluctuate with demand. Manufacturers need to have the right talent waiting in the wings ready to be deployed as soon as business ramps up. This underscores the need to engage students and © 2014 Yoh Services LLC | A Day & Zimmermann Company
other talent communities to build an employment pipeline before there are jobs to be filled.
At the same time, manufacturers must work with an experienced talent provider that can deliver the right professionals for the job exactly when they’re needed. Because this talent is so highly specialized and sought after, recruiters dedicated to the aviation industry, especially those with decades of experience working with these engineers, hold an advantage in delivering top performers as soon as demand heats up. Only by making sure degreed engineers are available can manufacturers ensure new components and technologies are consistently working their way into aircraft to improve efficiency, reduce maintenance, and advance flight.
While the aviation industry faces numerous challenges, engineers are working to trim the fuel and maintenance costs that have weighed on profits in recent years. The aircraft that might hold the answers are still under development, and only by tapping the right engineering talent at the right time can the aviation industry continue its evolution and extend its longevity another 100 years. p. 17
YOU NEED IT. WE HAVE IT.
Yoh is here. Yoh is there. Yoh is virtually everywhere. All in and busy going all out, doing everything it takes to take you where you want to go – forward. How? By foregoing the talent pool in favor of our own sea of talent, helping you find just the right person for the job or just the career you’ve been searching for.