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Supply Chain News: As Manufacturers Go High Tech, Finding Software Talent is Big Challenge


Many Millennials For Now Don't See Allure of Manufacturing Work, Social Purpose of Manufacturers versus Silicon Valley

Oct. 20, 2016
SCDigest Editorial Staff

Rather suddenly, many manufacters are looking for softwae talent.

Much of that is driven by what manufacturers see as big opportunities to create new products and services from Internet of Things (IoT) technology For example, equipment giant Caterpillar has millions of its machines out in this field connected to the Internet, providing data on potential maintenance needs, how customers are actually using the equipment, and more.

Supply Chain Digest Says...

Obviously, many manufacturers have a lot of PR work to do to change millennial perceptions. Some think that change in perceptions are coming.

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Industrial giant GE is also investing heavily in IoT capabilities, seeing it as a huge opportunity to create new services and revenue streams. In fact, GE has said it has a goal of becoming a top 10 global software company by 2010. Other manufacturers have similar ambitions.

There's just one problem: the top software talent isn't that wild about going to work for manufacturers.

The reality is that most manufacturers right now can't compete with the pay and benefits tech companies offer, said Andrew Dugenske, director of the Factory Information Systems Center at the Georgia Institute of Technology.

"Students are very interested in working for companies where they see a lot of upside potential," Dugenske recently told the Wall Street Journal. "For manufacturing, it's a bit challenging for companies to hire them at times because of the salaries that those [tech] companies are able to offer students."

The pay it seems is better at Internet and software-focused companies, but not dramatically. On average, tech companies pay $105,227, 12% more than manufacturing employers, for software developers, according to the researchers ar Burning Glass Technologies. For entry-level software jobs, tech companies pay $88,820, about 5% more than manufacturers.

However, issues beyond pure compensation are likely the more important factors. Potential employees are enticed by tech firms' name recognition, social cachet and hip offices in locales such as San Francisco or Boston. Tech companies in Silicon Valley and elsewhere may also be able to better tap into the interests of the so-called millennial generation in working for companies that have a social responsibility mission or the potential to "change the world" through innovation.

It may be a tough slog for many manufacturers to change that dynamic. An article this week in the Wall Street Journal quoted one college student studying software engineering as saying "I don't know what social good Caterpillar does," relative to a relative lack of interest in going to work for a manufacturer.

(Article Continued Below)



SCDigest will note that Caterpillar equipment plays a key role in feeding and providing energy to probably billions of people across the globe, but recognize that might be apparent to college students immersed in Facebook and Twitter.

The Wall Street Journal article, however, quotes another college as saying that while he didn't want to work in Silicon Valley, most of the traditional manufacturing companies he spoke with made him feel like just "a cog" who wouldn't be challenged or contribute meaningful work.

Obviously, many manufacturers have a lot of PR work to do to change millennial perceptions.
Some think that change in perceptions are coming.

Morgan Vawter, a Caterpillar executive, predicts that recruiting will become easier for manufacturers as the sector evolves. "The line between a tech company and a non-tech company is going to go away over time," Vawter said.

Can manufacturers attract top tech talent? What do they need to do? Let us know your thoughts at the Feedback section below.


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