This Week's Herman Trend Alert Demand-Driven Workforce Development

The Herman Trend Alert November 29, 2006 Manufacturers Being Squeezed In the United States and elsewhere, structural (non-wage) costs for manufacturers, as a percentage of the total costs, are continuing to rise. According to a study released September 2006 by the U.S. National Association of Manufacturers (NAM), The Manufacturing Institute, and the Manufacturers Alliance/MAPI, structural costs increased from 22.4 to 31.7 percent of the total costs, compared to similar costs for similar companies in nine trading partner countries in 2003. “(This) sharp rise in these non-wage costs represents a significant and long-term problem for our nation’s manufacturers and America’s economy,” said John Engler, President of the NAM. These increasing structural costs harm workers and threaten competitiveness because they prevent job creation and take valuable funds away from research and development and worker training. Without investment in these three areas, manufacturers cannot realize growth. While manufacturing has rebounded from the protracted slowdown of the early 2000s, the underlying pressures on U.S. manufacturers have not abated. Surprisingly, the largest contributor was the corporate tax rate, responsible for one-third of the increase. Higher energy costs also contributed significantly to this challenge for U.S. employers. Historically---in the mid 1990s, natural gas pricing had been a competitive advantage for these companies, costing on the average 30 percent less than the trading partners had faced. As the average cost of natural gas for the nine major trading partners shifted to 0.7 percent below the price paid by U.S. manufacturers in 2005 that competitive advantage flipped to a disadvantage. Other increasing structural costs include those for pollution abatement. Since the year 2000, these costs were found to have increased by 11.5 percent, increasing the U.S. excess cost burden by 1.7 percentage points relative to its major trading partners. Add to all of these increasing costs, escalating costs in insurance benefits and it’s easy to understand the predicament in which U.S. manufacturers find themselves. Many are struggling to embrace technology fast enough to make these differences. The problem is that embracing technology requires upskilling the labor pool and those funds have been reduced, rather than increased. Expect these costs to continue to rise across the developed world. © Copyright 1998-2008 by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com. The Herman Trend Alert is a trademark of The Herman Group, Inc." DON'T BE LEFT BEHIND! If you've been thinking about attending our valuable Employee Retention Specialist Certificate Program, don't delay--only three spaces remain. With the employment market heating up, many positions are literally impossible to fill. Attend this course and you will learn dozens of low-/no-cost valuable strategies to attract and retain the talent you need. Recertification credit from HRCI. Next program: May 22-23, Charleston, SC. Call Carol at 336-282-9370 or visit http://www.employeeretentionspecialist.com. GET INSIDE THE MINDS OF YOUR EMPLOYEES Find out what's really going on inside the hearts and minds of your employees. Our InnerViews interviewing service uses SPHRs and PHRs, certified human resource professionals to probe for the information you really need to know. Exit and Stay Interviews, as well as Why-Didn't-You-Take-Our-Offer Interviews. Call Rosalie Catalano at 937-648-1918 or read more at: http://www.hermangroup.com/retentionconnection/exit_interviews.html. NEW BABY BONUS Book Joyce to speak on the West Coast in 2008 and receive 100 of her books of your choosing. There is a new baby in the family, Spencer Jay, and Joyce would appreciate more opportunities to watch him grow. For more about Joyce, visit http://www.hermangroup.com/joyce.html or call Joyce at 336-210-3548. Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers. New subscribers are welcome. There is no charge for this public service. The Herman Trend Alert is received by over 30,000 subscribers in 78 countries, in addition to other websites and printed magazines. Do you enjoy receiving this weekly e-mail update? Contact us about our co-branded Trend Alert service. Click here to sign up for the Herman Trend Alert. Subscribe or Unsubscribe to weekly Herman Trend Alert View this week's Herman Trend Alert Archived Weekly Herman Trend Alerts

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