With companies like Ford, GM and Whirlpool all headquartered in Michigan we should be attracting talent to our area. However, recent studies have found that other states have been deemed. more desirable. What can be done to attract talent for jobs in-state and improve the overall states attractiveness?
Michigan is home to a large number of high-tech manufacturing jobs. With companies like Ford, General Motors, and Whirlpool headquartered here, we are in a prime position to attract the right talent for these jobs. However, recent studies show that Michigan may not be as attractive to potential STEM employees as other states.
Unfortunately, the past few years have highlighted labor shortages and vacant positions going unfilled in Michigan. Is this trend simply due to the aftermath of the COVID-19 pandemic and labor shortages, or is the problem more complex? To attract top talent, employers need to be willing to pay a competitive wage. And statistics show that is not happening in Michigan.
This is a critical issue for Michigan, as high-tech manufacturing jobs are vital to the state's economy. Here, we explore Michigan's position in attracting the right talent for these jobs and what needs to be done to improve the state's attractiveness.
Unfilled Job Openings in Michigan
One of the most obvious indicators of a talent shortage is the number of job openings that go unfilled. COVID-19 already catapulted the world into a supply and demand struggle for jobs and Michigan was no different.
In February of 2022, Michigan had 330,000 job openings, up 55.7% from the same period last year and equal to 7.2% of all jobs in the state, compared to the national average for unfilled jobs which is 6.6%.
What's more, the labor force participation rate, which is the percentage of people working or looking for work, is currently 59.5%, ranking Michigan 41st in the nation. These statistics show that more people are leaving the workforce than coming in, which is a sure sign of a talent shortage.
Do Michigan Employers Pay Enough?
According to Indeed, the average salary for a software engineer in Michigan is $112,910, nearly 11% less than the national average of $127,169. Similarly, physician assistants, often ranked as one of the Best STEM Jobs, are paid $73,550 in Michigan, 35% less than the national average.
Oakland County, Michigan's recent Economic Outlook report also shed some light on wage discrepancies and job growth. The report listed salaries in computer and math occupations in several metropolitan areas across the U.S. and adjusted for cost of living. Metro Detroit is at the bottom of the list. Last year, the average salary for a computer- or math-related job in Metro Detroit was $83,984, well below the U.S. average of $97,540. In Atlanta, Charlotte, San Francisco and Seattle, median wages when adjusted for cost of living for these STEM jobs bring in six figures, with Seatle topping the list at $116,488.
Unfortunately, this trend of lower-than-average salaries for Michigan employees carries across many STEM careers. This puts the state at a disadvantage when attracting top talent. It also puts Michigan businesses at a disadvantage, as they are likely to lose out on talent to companies in other states that are willing to pay more.
The gender pay gap is also a concern in Michigan, where the gap is larger in the state than in the nation. According to the U.S. Census Bureau, the median earnings of a U.S citizen who worked year-round and full-time is $53,544 for men compared to $43,394 for women. The gap is larger in Michigan, where the median pay for a man is $53,435 while the median for women was $41,560.
What Does This Mean for Michigan?
The talent shortage in Michigan is a real and pressing issue. Without the right talent in place, Michigan businesses will struggle to compete on a national and global stage. This is particularly true in the high-tech manufacturing sector, where Michigan businesses rely heavily on STEM employees.
As the state tries to attract large-scale development projects to add higher-paying jobs, this further raises the need to have a highly-skilled workforce. If Michigan cannot attract the right talent, these projects, and the jobs they create, will go to other states.
What Can Be Done?
Several things need to be done to improve Michigan's attractiveness to potential STEM employees.
First, Michigan businesses need to be willing to pay competitive wages. Attracting the right kind of top talent requires being willing to pay salaries on par with other states. It also requires being willing to close the gender pay gap.
New York City, for example, is considering making it an “unlawful discriminatory practice” for an employer to advertise a job, promotion, or transfer opportunity without stating the position's minimum and maximum salary in advertisements. These types of wage transparency practices are a good first step to solving wage discrimination and pay gaps. Michigan should consider following suit and adopting a similar law.
Second, Michigan needs to improve its education system. This includes both primary and secondary education, as well as higher education. The state needs to produce a pipeline of educated workers prepared to enter the workforce and meet the needs of businesses.
Third, the state needs to better market itself as a place for STEM workers. This includes highlighting the state's many advantages, such as its world-class universities, vibrant cities, and beautiful natural scenery.
Michigan has a lot to offer potential STEM employees. However, the state is not currently positioned to attract the talent it needs. This is a problem that needs to be addressed for Michigan to remain competitive in the high-tech manufacturing sector. By attracting the right talent, Michigan will be able to keep pace with other states and maintain its position as a leader in the manufacturing industry.