Mind the gap!
As technology and fast-evolving supply chain practices take hold, the future of American manufacturing will be increasingly high-value, high-tech and automated. Decades of offshoring, coupled with increased automation, has eliminated most low-skilled jobs leaving behind a set of higher-value jobs that are harder to fill. In fact, manufacturers and labor unions face a growth-constricting gap between the workers they need for this new paradigm and the talent they can actually find.
Current statistics illustrate the conundrum in greater detail — six out of 10 manufacturing positions remain unfilled, and it takes an average of 74 days to fill a skilled production position. Over the next decade, 3.5 million domestic manufacturing jobs will open — with 2 million of those jobs going unfilled due to the skills gap. And when you consider that for every 100 new jobs in manufacturing, 190 are created in ancillary fields, the domino effect of these unfilled positions on the greater economy is profound.
According to a joint study by Accenture and the National Association of Manufacturers’ (NAM) Manufacturing Institute, more than 50% of companies plan to increase U.S.-based production by more than 5% in the next five years, with nearly 25% planning to grow by more than 10% in the same timeframe. Yet 85% of executives say they believe the skills gap will impinge their ability to meet customer demand, and 65% believe it will curtail their ability to innovate. These counter forces pose a huge dilemma for U.S.-based manufacturers.
In addition to an impending spike in retirements of skilled boomer workers, other factors contribute to the shortage, including a negative image of the manufacturing industry among younger generations, lack of STEM (science, technology, engineering and mathematics) skills among workers, and a gradual decline of technical education programs in public high schools. To make matters worse, the Great Recession of 2008-2009 led many labor unions to pare back recruitment efforts and paid apprenticeships, which kept many young people out of the trade job pipeline.
Skills in Which Manufacturing Employees Are Most Deficient
The Talent Gap Isn’t Just Wide–It’s Expensive
A recent study estimates an average U.S. manufacturer is potentially losing 11% of its annual earnings, or $3,000 per existing employee, due to the talent shortage. Meanwhile, another study paints a bleaker picture: a loss of an average $14,000 per open position that goes unfilled.
Closing The Gap–What You Can Do Now
There is quite a bit you can do to build a more robust workforce while bolstering both your company image, as well as the appeal of manufacturing overall. Here are a few tips to tackle the forces working against you:
- Educate the Next Generations
Overall, as product development and manufacturing systems become more intertwined and products more tech-centric, take it upon yourself to ensure your workers master new ways of doing jobs. A great example is the Chicago-based Plumbers Local 130 who recently opened a state-of-the-art training center that will expose apprentices to “real-world” construction scenarios, plumbing issues, and “green” technologies.
Also, focus on building interest, and skills, in your greater community by continually seeking out opportunities to expose high-school-aged (and even younger) children to manufacturing as a profession. Everything from factory tours/field trips to mentoring and internship programs are great ways to build exposure. Furthermore, support local vocational schools by incentivizing your highest-skilled workers to host workshops, or even teach courses.
- Make Manufacturing a Key Part of Your Story
All too often, companies focus entirely on benefits and work environment in their recruiting messages. In today’s marketplace, these are merely table stakes, and don’t do enough to differentiate you. Instead, you should consider elevating the role factory workers play by putting your manufacturing operation and your team’s craftsmanship at the center of your marketing message. Perhaps one of the best adopters of this “creator” movement, Detroit-based watch maker, Shinola, built a $100 million brand in just seven years by weaving where their watches are made, and the people who make them, into their brand message. In doing so, they elevated their line workers to craftspeople, created a greater sense of purpose for their jobs, and instilled great civic pride across their entire operation. For Shinola, manufacturing jobs went from dark and dangerous to precise and proud.
By elevating the role manufacturing plays in your overall business, and by creating a go-to place of employment for younger, tech-savvy workers, your business can thrive while others flounder.