Nationwide, manufacturers are still operating with fewer employees than before the pandemic. According to a study2 performed by Deloitte and The Manufacturing Institute, 13 million individuals were employed in manufacturing in January 2024. An expected 3.8 new workers will be needed by 2033. In their study, Deloitte concluded that 1.9 million of those jobs will go unstaffed, leaving the industry with a massive shortage of employees.
The Widespread Impact
While this labor shortage represents a significant challenge to manufacturers, the consequences will extend beyond the human resources department or even manufacturing companies. Millions of vacancies in manufacturing will cause a pronounced decrease in the GDP and affect the availability of products nationwide. If left unchecked, this labor shortage could continue to grow and have widespread repercussions across many industries.
A manufacturing labor shortage forces manufacturers to operate at less than full capacity, stretching their teams to keep up with the demand for products. It can lead to:
- An increase in the cost of goods, as they are in short supply
- Product delivery delays, as teams struggle to meet deadlines
- A decrease in product quality, as quality control suffers in short-staffed facilities
- Reduced innovation in manufacturing products and processes, as teams lack time to devote to such improvements
How Did We Get Here?
Yes, the pandemic marks a significant shift in the manufacturing industry. However, there are many more factors to consider if manufacturers hope to overcome this developing problem.
- Workforce Demographics – Currently, one in four US manufacturing employees is over the age of 553. These individuals have the necessary skills and experience but are nearing retirement age. Manufacturers could be left short-handed without a steady influx of skilled workers to replace them.
- Low Unemployment – If there are few applicants available when hiring for open positions, employers have few choices. In times of low unemployment, it is likely that highly-skilled individuals are not openly searching for a new job.
- Poor Compensation – Manufacturing jobs that do not offer competitive wages, benefits, working conditions, and career advancement opportunities are not as attractive. Recruiting and retaining top talent begins with creating a competitive compensation package.
- Manufacturing Advances – Industry 4.0 refers to a host of changes in industrial and manufacturing processes that mark the fourth industrial revolution. Beginning in mid-2010, these changes include the adoption of various technologies, including AI, automation, robotics, and big data. Manufacturers hoping to stay ahead of the competition are integrating these technologies in their facilities and need a workforce skilled in using them.
- Immigration Policy – Shifting immigration policies can make it challenging for employers to hire non-US persons for manufacturing jobs regardless of their qualifications or experience.
Closing the Manufacturing Skills Gap
1. Recruiting to Retain
With many jobs available and few skilled workers, potential employees will be comparing your offer against those of other companies. Do you provide full benefits? Paid time off? Flexible working hours? What are the working conditions in your facility?
Before you start recruiting for manufacturing jobs, be sure you know what benefits your applicants expect to see. You may want to talk to a recruiting firm specializing in manufacturing professionals. They can help you craft a compensation package that will put you at the top of the list of prospective employers.
2. Training
As the necessary skill set for the job changes, so should your employees’ skills. Choose to stay at the forefront of manufacturing technology by helping your team learn to use new technology on the job. Virtual and augmented reality can be great tools to allow employees to practice new skills before using them at work.
3. Outsourcing
What do you and your team need to do in your facility that nobody else can do? This key question can help you identify which necessary tasks you can outsource. Hiring individuals outside your facility to take over routine tasks lets you focus on what you do best—production and product development. It also reduces the number of manufacturing employees you need to hire to get the job done well.
4. Automation
Gone are the days when human interaction was necessary at each step of the manufacturing process. Robots and guided machines can perform many mundane or repetitive tasks. This allows team members to focus their time and efforts on monitoring processes, programming efficiencies, and optimizing operations. In many cases, automation can remove the need to fill lower-skilled positions with people and open up more engaging technical opportunities that provide better compensation and more growth potential.
5. Data Analysis
Manufacturers who embrace the power of technology to identify bottlenecks and quality control issues will reap the benefits of streamlined operations. Employing sensors and interconnected devices throughout the manufacturing line can provide a wealth of information about which processes or procedures need improvement to increase productivity. An efficient facility needs less human interaction to realize the same outcome.
6. Education
Widespread misconceptions about jobs in manufacturing may lead young people to steer clear of the industry. However, there are more opportunities in leadership, technology, data analytics, and management in manufacturing than ever before. Companies supporting vocational education programs and offering internships may help pique the interest of future prospective employees. Attracting talented individuals to the workforce will help fill future manufacturing jobs.
The Future of Manufacturing
The United States economy rests on the sturdy shoulders of manufacturers nationwide. The manufacturing skills gap is a reality with a broad impact as many industries and organizations depend on the products they create. However, if addressed wisely and effectively, it can be a problem left to the history books.
These changing trends in manufacturing will inevitably change the way manufacturing staffing in Utah and other parts of the country will happen. And the recruiters at PrincePerelson are dedicated to helping manufacturing companies navigate these changes to support a bright future for US manufacturing. Call us today for help with recruiting top talent for your manufacturing company.
Infographic
The labor shortage presents a major challenge for manufacturers, affecting more than just human resources. Discover how to tackle the manufacturing skills gap in this infographic.
1https://www.bls.gov/opub/ted/2022/u-s-manufacturing-output-hours-worked-and-productivity-recover-from-covid-19.htm
2https://www2.deloitte.com/us/en/insights/industry/manufacturing/supporting-us-manufacturing-growth-amid-workforce-challenges.html
3https://nam.org/new-report-dives-into-retaining-the-aging-manufacturing-workforce-5579/?stream=workforce