Jeff Green and Mark Clothier| Business Week
Andrew Watt says he figures the shelf life of an auto engineer looking for a job in Michigan is about three days. Companies that wait longer than that will have to get back in line for the next candidate.
“If their skills are even on the edges of automotive, they can get a job,” said Watt, whose iTalent LLC in Troy, Michigan, finds engineering and information technology workers for companies in nine states. “There’s an extreme shortage. There’s way more demand than supply.”
Michigan’s unemployment was the worst in the U.S. at 14.2 percent in August 2009, shortly after General Motors Co. (GM) and Chrysler Group LLC emerged from a U.S.-backed rescue, and has since plunged to 8.6 percent, roughly in line with the national average. Employment in skilled positions is rising, reversing a decline under way since the turn of the century.
Recruiter Watt said the demand for engineering and IT workers is requiring additional pay and bonuses, with the normal pay range of $80,000 to $120,000 commonly stretching toward the high end. A recent recruit got a $17,000 raise and bonus of as much as 20 percent to move from Tennessee to Michigan, he said.
Engineers, who help design cars and parts and need specific — and, in some cases, advanced — degrees, have been in demand throughout the U.S. for years. Michigan Governor Rick Snyder said part of the problem in has been a gap between what companies need and what the educational system produces.
“We’ve had kind of a dumb system in our country,” Snyder said in an interview. “The private sector is out with its demand, and supply people, the educational system, there’s no strategic perspective to say let’s match supply and demand.”
Even so, Michigan’s situation today is notable for such a dramatic change in such a short time.
December Georgia Institute of Technology graduate Graham Fletcher, 24, said he had one job offer already on the table and three in progress when he decided to accept another position with tire and auto-parts maker Continental AG (CON) that started May 2 at the supplier’s Auburn Hills, Michigan, office. He’ll do training in Germany and Shanghai over the next 14 months before returning to Michigan, he said.
“I’d never set foot in Michigan until I came for the interview,” said Fletcher, who also considered jobs in Georgia, Alabama, Massachusetts and California. Continental had the best offer and most friendly hiring approach, he said.
He’s already recruiting other Georgia Tech students and will participate in job fairs for his new employer, he said.
The scarcity of technical talent is why Nissan Motor Co. (7201) is extending job search efforts to Ohio and Indiana to find engineers for 50 open jobs at the Yokohama, Japan-based, automaker’s technology center in Farmington Hills, Michigan, said Carla Bailo, senior vice president of research and development for Nissan Americas.
The company plans to hire as many as 150 engineers this year, primarily for the 1,200-employee technology center, she said. Nissan has about one candidate right now for every two openings, she said.
The company more than doubled the size of its internship program this year to 45 from 20 in 2011 to increase the flow of trained engineers, Bailo said.
During the automotive industry downturn, employment at the technology center dropped to about 750 from 1,000, because Nissan didn’t fill jobs vacated by retirements and people who left for work in other industries.
“We saw a lot of that in the auto industry, people saying they were done with autos,” Bailo said. “Now we’ve got to get those people, those car lovers, back.”
The presidential election battleground state’s improving fortunes are in contrast with the U.S., where unemployment has persisted at more than 8 percent since February 2009, the longest stretch at the level since monthly records started in 1948.
Michigan has had the fastest-improving economy in the U.S., after energy-rich North Dakota, from the third quarter of 2009 through the first quarter of this year, according to the Bloomberg Economic Evaluation of States, which tabulates economic recovery from employment and home values to performance of public companies.
Michigan announced it’s eliminating 177 temporary workers and as many as 225 full-time workers at the Unemployment Insurance Agency after claimants fell to 187,000 in April 2012 compared with 537,000 in June 2009, according to Mario Morrow, a spokesman.
GM, Chrysler, Ford Motor Co. (F), Nissan, Toyota Motor Corp. and other automakers have pursued plans to seek new engineers for jobs in Michigan in the last several months. That has led to a spike in job openings on the website for the Society of Automotive Engineers International, said Martha Schanno, SAE recruitment and sales manager.
Normally, there are fewer than 100 job postings and that number has swelled to more than 400, with about 300 from Chrysler alone, she said.
The balance of power at the SAE career fairs has shifted, too, with about 300 job seekers at an April fair attended by 60 companies compared with 1,200 to 1,500 jobseekers competing for jobs from 12 companies as recently as 2009, Schanno said.
There have always been some shortages of engineers, particularly for “specific, targeted niches,” Schanno said. The current shortage is made more acute than those she said she experienced in the past because of the lack of graduates to fill the pipeline.
Engineers were the most difficult job to fill in the Americas in 2012, up from fourth in 2011, according to Manpower Inc.’s 2012 Talent Shortage Survey of 10,232 employers in North and South America. Engineers were the second most difficult job to fill globally, according to the annual survey.
In Michigan, companies are also hiring college students practically right off the parking lot from SAE’s student competitions, where they create and run race cars and off-road vehicles, Schanno said.
Continental, which has U.S. engineering centers in Michigan, as well as in the Chicago area and South Carolina, sent both human resources personnel and engineers to an SAE competition in May, said Trisha Boehler, a recruiter for the supplier in Michigan. Her job, called a senor employer-branding specialist, was created in March to help the Hanover, Germany- based parts supplier raise its profile with job seekers, she said.
Continental received eight resumes, and 200 additional Facebook (FB) likes, as a result of the event. Two of those applicants will start this month, Boehler said.
With less than one applicant available for each job opening, the tire and auto-parts maker has no choice but to make every effort to find new workers, said Ann Baker-Zainea, who heads up North American recruiting for Continental.
Ford is advertising in local newspapers to help fill about 100 engineering jobs in southeast Michigan, John Fleming, Ford’s global manufacturing chief, told reporters Aug. 5 in Acme, Michigan.
“The market is very tight generally for engineers and for technically qualified people,” he said.
Toyota is adding about 150 engineering jobs at its Ann Arbor, Michigan-area facilities, Bruce Brownlee, a company spokesman, said in an interview. The automaker increased its intern and co-op program to 120 this year, from about 50 in previous years.
“Clearly, we have a lot of competition for the engineering talent,” he said.
With national news stories about crime in Detroit and other negative stereotypes about the region, employers also have to convince prospects that the area has plenty of positives.
GM sends interns on tours of the city to see things such as popular restaurant Slows Bar BQ, the Eastern Market, urban gardens and the riverfront area, said Sean Vander Elzen, senior manager for global talent acquisition at the automaker.
“Those things are exciting to certain people,” he said. “We let the city speak for itself.”
Governor Snyder said he wants to change state liability laws to make it easier to give tours of auto factories and change perceptions of factory work.
“We need to give kids and parents the opportunity to see a plant floor today,” he said. “You walk into most manufacturing facilities today and it’s like going into a clean-room environment. It really is that clean. It is a high-tech industry and we should be proud of that.”
Although Michigan doesn’t specifically track automotive engineering jobs, highly skilled categories associated with the industry are showing gains for the first time in years, said Bruce Weaver, economic analyst at the Michigan Department of Technology, Management and Budget.
Jobs that include architectural engineers, computer-system design, and scientific research and development and related services have risen 9.1 percent, adding 10,100 positions, from the end of the 2009 through last year, his data showed. Those same skills lost 38,000 jobs, or more than a quarter of the total, from 2001 to 2009, he said.
In Lyon Township, about 40 miles northwest of GM’s Detroit headquarters, there are already several companies in the area that can’t find enough skilled workers and in some cases it’s restricting expansion, said Michelle Aniol, economic development coordinator for the township.
Outbound Technologies Inc. bought an 8,000-square-foot building in Lyon Township three years ago to expand engineering work on designs for factory-equipment controls, said Chris Tury, 61, the company’s senior partner. The engineering services company, with locations in Indiana and Ohio, has a dozen desks in Michigan still empty and is turning away work, he said.
“In order to grow, I need to hire and I can’t find enough engineers,” said Tury, who has run the company for 18 years. “It’s absolutely throttling our growth.”
To contact the reporter on this story: Jeff Green in Southfield, Michigan, at email@example.com; Mark Clothier in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: Jamie Butters at email@example.com