Workforce Challenges Continue into 2017 as a Top Priority for Manufacturing

Posted in Recruiting and Onboarding | Manufacturing & Distribution | Manufacturing Jobs on January 9, 2017

Manufacturing Skills GapHow Your Business Plays a Part in Overcoming the Skills Gap

In the manufacturing arena, recruiting employees is harder now than at any time during the past ten years.  In fact, one-third of HR professionals in manufacturing have said in recent months that they can’t fill an open position.

The reasons are threefold. First, more than 75 percent of manufacturers report a moderate to severe shortage of skilled workers. Second, a significant portion of the manufacturing workforce is nearing retirement age. And, third—and perhaps the most serious recruiting challenge—is manufacturing’s negative image among young people.

The heightened challenges are prompting leaders in manufacturing to take more-creative approaches to finding and keeping workers, ranging from holding community events aimed at improving public perceptions about manufacturing to developing a more worker-friendly culture inside the plant.

The Skills Gap
Over the next decade, there could be a shortage of two million manufacturing employees. That’s because there just aren’t enough workers with the skills and training needed for modern manufacturing (about 2.7 million workers are expected to retire in the next 10 years, while 700,000 new jobs are projected to result from business growth.)

Between retiring baby boomers and uninterested youth, age clearly is taking its toll on U.S. manufacturing skills. There's growing evidence, however, that manufacturers have begun identifying age as a potential solution to manufacturing's talent shortage as well.

Indeed, changing the negative perception of manufacturing among youth and their parents has become an integral component of closing the skills gap for a growing number of manufacturers.

Changing the Negative Perceptions
The knowledge economy is changing what is learned, how it is taught and who is teaching it, as the old-school methods of industry training are slowly but surely failing to keep pace. It seems like every industry, every job, is becoming high tech, or has become blended with high-tech components, more and more each year.

The new and emerging high-tech manufacturing businesses are looking for a workforce that today is getting spread out over many other industries because using information technology and data analytics has become one of the more critical core jobs in companies across the globe. Jobs that once did not require that knowledge base have evolved to embrace it.

Along with that heightened need for and use of tech/IT training, potential employers have to deal with the challenges that come with broader choices for a worker. For example, if they have a background in computer coding or engineering, now almost every industry in the country could hire them.

The negative image of the industry, coupled with scarcity of STEM (Science, Technology, Engineering and Math) talent in high schools, makes recruiting the right candidates challenging for manufacturing companies. The wage paradox adds to the conundrum as well. Although manufacturers indicate they have the propensity to pay more than market rates, they are still often unable to find the right talent.

Workforce Challenges
Not only are manufacturers facing various recruiting challenges, but these challenges are compounded by additional differences from one workforce category to another. For example, one of the biggest challenges during the recruitment process for skilled production workers is to find candidates who pass the probationary period, while for engineers, researchers, and scientists it's to find candidates who are eligible to take the initial screening tests. Therefore, while it may be relatively easier to scout for eligible candidates interested in skilled production positions, many of these candidates are not able to clear the basic screening or probationary period. Whereas for engineers, researchers, and scientists, simply finding the right candidate due to the smaller supply pool is the toughest hurdle. As different workforce categories present varied recruiting challenges, manufacturers need to develop customized recruitment strategies.

Managing the Talent Crisis
Creating a supply of workers with manufacturing skills – engineering, skilled trades and production – will be critical to the future competitiveness of companies and the industry as a whole. Manufacturing organizations should take the lead in managing the talent crisis by designing strategies that not only optimize talent acquisition, and deployment, but also contribute to developing manufacturing skills in their communities.

For example, workforce planning is important. But, on its own it’s not enough to deliver what manufacturers need. Fresh approaches in areas such as employer branding can generate big results when pursued in tandem with more traditional approaches. Similarly, many manufacturers are using a number of the same tactics to talent development that were being employed a decade ago. New performance tools and formal processes should be playing a larger role in any manufacturer’s talent management plan.

The manufacturing industry can’t solve all of its talent challenges on its own. Manufacturers should build robust community outreach programs, design curriculums in collaboration with technical and community colleges and continue to invest in external relationships that help attract talent. Creating a sustainable manufacturing workforce development program requires systemic change and ongoing commitment from the manufacturing community.
The federal government and state governments also play an active role in mitigating the talent shortage. For example, the U.S. government has supported state-wide apprenticeship programs, provided grants to community colleges and distributed tax credits and loans to companies that hire skilled workers. The industry, in its own capacity, continues to engage with state-sponsored local schools, community colleges and apprenticeship programs. None of these solutions on their own will close the gap, but together, manufacturers, educational institutions, communities and government can provide a foundation to mitigate the skills gap over time.

Next Step: Call to Action for Collaborative Strategies
There isn’t one specific solution to overcome the skills gap issue. Instead, a combination of strategies must be employed in concert to address current and future issues. Multiple stakeholders need to collaborate to address the skills gap. Manufacturing companies have to rethink their talent sourcing and recruiting strategies to attract new employees, improve candidate screening practices, define clear competency models and role-based skills requirements, invest in internal training and development, and engage with local schools and community colleges. Additionally, manufacturers and communities must stand together to poise the industry as a viable career option by improving the overall image of manufacturing. The U.S. federal and state governments must also continue to be engaged and increase their focus on improving the education system.  Additionally, businesses must do their part to support the effort. None of these solutions on their own will close the gap, but together, manufacturers, academia, communities, and government can provide a foundation to mitigate the skills gap over time.

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Author: Joy Duce, SPHR. She can be contacted at Joy.Duce@Sikich.com.


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Disclaimer: This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.