Workforce Challenges Continue as Top Priority for Manufacturing

By: Joy Duce, SPHR 

In the manufacturing arena, recruiting employees is harder now than it has ever been in the past ten years. In fact, according to the Society for Human Resources Management, 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 the younger generation’s negative image of manufacturing. 

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. 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.  

Advancing technology and science is changing what is learned, how it is taught and who teaches it, as the “old school” methods of industry training are slowly but surely failing to keep pace. It seems like every industry and every job within it are becoming high tech or are blending with high tech components more and more each year. 

The new and emerging high-tech manufacturing businesses are looking for a workforce that is getting spread out over many other industries. This is 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 now have evolved to embrace it. Candidates that have a background in computer coding or engineering are qualified to work in the majority of industries and not just within the realm of manufacturing. While there is a heightened need for tech-proficient employees in manufacturing, employers struggle to compete for the talent. 

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.  

These challenges are then 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 suitable 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.  

What now? 

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.  

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, manufacturers must abandon the  talent development tactics that were being employed a decade ago for new performance tools and formal processes.

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 active roles in mitigating the talent shortage. In the past, 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 governments can provide a foundation to mitigate the skills gap over time. 

Next Steps 

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 have 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 and increase their focus on improving the education system, and businesses must do their part to support the effort. With that support, manufacturers can provide a foundation to mitigate the skills gap over time.

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By |2018-11-21T13:15:34+00:00November 21st, 2018|Human Resources, Manufacturing|0 Comments

About the Author:

Sikich LLP
Sikich is a leading professional services firm specializing in accounting, technology and advisory services. For over 30 years, Sikich has been helping clients focus on overall business growth and the components that result in building the bottom line. Sikich has more than 750 associates and has been ranked as one of the country’s 30 largest accounting firms and among the top one percent of all enterprise resource planning solution partners in the world.
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.

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