At a time when Harley-Davidson Inc. is preparing to shift new jobs out of the region, and Modine Manufacturing Co. is cutting 100 jobs at its Racine headquarters, it seems counterintuitive to think that the Milwaukee area is in the midst of a skilled labor shortage.

And yet it is. In fact, the shortage is likely to grow worse before it gets any better.

A recent survey by the Paranet Group asked 200 local manufacturers to rank the most significant challenges they've faced over the past six months. You might think that their biggest obstacle to doing business would be taxes. Or rising employee health care premiums. Or soaring energy costs.

Nope. Their No. 1 obstacle is "finding and retaining good people."

How could this be? Well, for starters, nearly 66 percent of those manufacturers reported an increase in domestic sales.

By adopting principles such as Six Sigma, lean manufacturing and just-in-time capabilities, most of the Wisconsin manufacturers that have survived the march to global trading have figured out ways to be competitive. And now, they're competing against each other for a limited skilled labor pool that will continue to shrink as the baby boom generation retires and is replaced by a much smaller generation.

Similar shortages are found in the skilled trades, where gray-haired carpenters, plumbers and electricians are in such demand that they're having trouble keeping up with their work loads.

At the same time, unemployment rates among African-American males in Milwaukee's inner city continue to skyrocket. This, at a time, when nearby manufacturers need all the skilled labor they can find.

That disconnect is not lost on Milwaukee Mayor Tom Barrett.

"I have often referred to this as ships passing in the night. I was at a Saturday morning community meeting with more than 100 people in the central city. The big issue was the lack of employment opportunities. I left there and went to visit a company on the northwestern part of the city who lamented on the fact that they couldn't find workers," Barrett said.

Milwaukee-area companies increasingly are taking proactive steps to recruit a more diverse workforce. Most of those employers reaching out to minority candidates aren't doing so because it warms their bleeding hearts. They're doing so because it makes sense from a business standpoint. They're doing it out of necessity.

You can learn more about these progressive companies in the cover story of this week's Small Business Times (www.biztimes.com). Headlined, "The Business of Diversity," this special report documents the best practices for connecting employers who need skilled labor with the people who need good jobs.

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