How Manufacturers Value and Use Industry Credentials to Source Skilled Talent

Manufacturers may have a new ally to help them more effectively use industry credentials to qualify and hire skilled workers, in the form of a valuable report entitled Examining the Quality, Market Value, and Effectiveness of Manufacturing Credentials in the United States. This study was released by Workcred, the American National Standards Institute (ANSI) affiliate, in partnership with the National Institute of Standards and Technology (NIST) Hollings Manufacturing Extension Partnership (MEP).

With more than two million manufacturing positions expecting to go unfilled between 2018 and 2028, the Workcred-MEP study was designed to gain a better understanding of how industry credentials could be used to fill the demand for skilled workers and upskill existing ones. Nine hundred and forty-five (945) manufacturers participated in the study via online surveys and in-depth focus groups to evaluate the effectiveness of current credentials and provide feedback for improvement.

The results varied among industrial professions and manufacturers of various sizes, but there was one common consensus: Industry credentials could be a more useful resource if they were better understood by manufacturers and if they were created to align with the skills most needed at their facilities.

While 66 percent of the study participants viewed experience as a better predictor of performance, they reported they would use credentials if more focus were placed on soft skills and hands-on experience that applied to their industry.

Larger Manufacturers Place More Value on Credentials

One large manufacturer from the Midwest region responded in the Workcred-MEP study that “I think that [a credentialed] employee will have more success on the job. They will be more engaged. They’ll contribute more to the company.”

Reinforcing this particular respondent’s sentiments, one of the study’s key findings was that larger manufacturing facilities (more than 500 employees) were more likely to prefer industry credentials than smaller facilities. A majority of surveyed small and medium-sized manufacturers (SMMs) do not routinely require credentials or use them as a major factor in hiring or promotion decisions. They also do not view credentials as the most relevant tools to identify new skilled labor. However, with more understanding of credentials and how they can assist in the hiring process, this perspective from SMMs could change.

As one small manufacturer in the Northeast region noted: “[There is] a lot of ignorance about what credentials are out there and what they mean. If somebody could tell us or teach us what . . . these things mean, and I see them on the resume, it might mean something to me.”

Thirty-six percent of the study participants noted most new employees require training, regardless of their credential status. These manufacturers also had difficulty quantifying whether credentials actually added value in reduced training time and expenses. The study participants noted that numerous manufacturing credentials are not recognized by an independent third party, which adds to the difficulty of assessing the quality of the credentialing certificates or certification programs.

However, when asked about the overall perception of credential value, 69 percent replied that credentials help them more easily identify qualified people in their facility. Fifty-two percent said that credential holders required less on-the-job training.

Given these findings, the Workcred-MEP study points to the potential for industry credentials to become essential evaluating and hiring tools, if they can close the skills “mismatch.” According to the surveyed manufacturers, credentials must be able to clearly demonstrate which individuals possess the right qualifications to meet the growing demand of new skill sets.

The Value of Industry Credentials Varies by Profession

As previously noted, large manufacturers demonstrated more overall preference for industry credentials than smaller facilities. The Workcred-MEP study also determined that large facilities are more likely to use a wider variety of credentials compared with smaller facilities. The credentials most sought after include high-demand professions such as engineers, quality technicians, precision machinists, production, and management.

The study’s credential breakdown by profession (Table 7) demonstrates the large gap in preference by the size of manufacturing facilities. Seventy percent of large facilities prefer credentials for engineers. However, only 39 percent of very small manufacturers look for engineering credentials. Sixty percent of large manufacturers seek credentialed quality technicians, while only 29 percent of very small facilities look for the same credentials.

When participants were asked to name their top industry credentials for employment decisions, both large and small manufacturers cited the National Institute of Metalworking Skills (NIMS), the IPC21, the national HVAC credentials, and the Professional Engineer license. Of the study participants 13 percent develop their own facility-specific credentials to apply to certain job roles.

Additional in-demand industry credentials (Table 12) include:

• OSHA Forklift
• Certified Welder, American Welding Society (AWS)
• Certified Quality Inspector, American Society for Quality (ASQ)
• Apprenticeship - Machinist
• OSHA 10-hour and OSHA 30-hour
• IASSC Certified Green Belt™
• IASSC Certified Black Belt™

Forklift drivers, welders, machinists, quality inspectors, and CNC programmers were all cited as credentials in high demand from the smallest to the largest manufacturing facilities. More than half of the study’s participants cited industry-specific certifications as a key factor in hiring decisions. Many of these manufacturers said their credentialed employees give their facilities a competitive advantage. Participants noted that with more standardization per industry and profession, credentials could deliver even more value for both manufacturing employees and their employers.

Recommendations to Clarify Credential Value and Potential ROI for Manufacturers

One of the most critical findings from the study is that more research is needed not only to clarify existing manufacturing credentials and what they represent, but to determine what new credentials are needed for areas not yet covered. This study opens the credentialing door to deliver more value to manufacturers who need to identify qualified job applicants and expedite onboarding times.

Other recommendations from the study include:

• Increased transparency for improved understanding of the purpose, use, and competencies of manufacturing credentials – The study cites a new app, Credential Finder, for credential comparisons that align with the needs of students, job seekers, workers, and employers.
• Expansion and clarification of credential quality standards – This includes increasing the awareness of the benefits of current industry credentials, publicizing this value, and developing incentives for credentialing organizations to use quality standards.
• Development of stronger relationships between manufacturers, educators, trainers, and credentialing organizations – The lack of credible third parties to assess credentials demands more collaboration. Continuous feedback is needed from all these key players so that industry credentials can more directly reflect the skills that manufacturers need to fill open positions.
• Addition of more employability (soft skills) to current and new credentials – The study notes the opportunity to address employability skills in secondary schools (K–12).
• Address the need for new credentials that focus on performance and specific roles – Assessments should be redesigned to measure applied knowledge and skills. Manufacturers identified several roles as lacking relevant credentials, such as ISO auditor, quality control, inspection, and industrial maintenance.
• Expansion of apprentices and apprenticeships to more manufacturing occupations – Individuals should be able to advance their careers by demonstrating that they have the specific skills and knowledge required by the manufacturer. More resources and initiatives should be made available for very small, small, and medium-sized manufacturers to participate in apprenticeships.

Most importantly, the study notes that additional research is needed to determine how industry credentials could deliver more value to the entire manufacturing community.

Recommendations for further research include:

• Analyze supply and demand for workforce competencies
• Validate the need for new credentials
• Examine other factors that impact the use of credentials (sociological and anthropological methodologies)
• Study the impact of performance exams on actual job performance
• Examine facility-specific credentials
• Study the return on investment of work-based learning for manufacturers

Many of the identified credential organizations have been reviewing these recommendations.  The wheels are in motion to help manufacturers more fully understand industry credentials and their ROI potential for qualifying and hiring job applicants. Credentials could then deliver real value for manufacturers looking to fill a growing skilled labor gap.

In addition, MEP Centers are a source of information to small manufacturers. Centers are encouraged to learn more about key manufacturing credentials to inform manufacturers of their potential in their talent plan. Contact Mary Ann Pacelli of NIST MEP at mary.pacelli [at] nist.gov (mary[dot]pacelli[at]nist[dot]gov) for more information.