The following insights are from Deloitte and Manufacturing.Net.
According to a recent Deloitte study, the skills gap in manufacturing may leave approximately 2.4 million positions unfilled between 2018 and 2028—and a potential economic impact of 2.5 trillion. Furthermore, the Bureau of Labor Statistics found that 80 percent of the U.S. is employed in a professional services job and only a mere 8 percent in the manufacturing of goods. These statistics speak for themselves —there is a crisis at hand in the manufacturing industry—and there could be significant consequences if steps are not taken to mitigate the labor shortage. In order to do so, it’s imperative to first recognize the reason there’s a problem at all. In this case, there are several possible drivers of the shortage.
Or is a better word for this misperception? Jobs in manufacturing have historically received a negative reputation—one that is both unwarranted and inaccurate. Many think the industry does not provide fulfilling or well-paying careers, particularly for millennials. Other misperceptions include the idea that manufacturing itself is on a downward spiral in the U.S. and that machines will be replacing humans on the manufacturing floor. This could not be further from the truth. Later I will provide some ideas for transforming this.
Because of the negative perception of manufacturing, the vast majority of workers are turning to careers in professional services—as previously mentioned—including the “cream of the crop.” The outcome of this is not only a shortage in labor, but a shortage, more specifically, in highly-skilled workers. The industry is also seeing high drop-out rates, creating a higher turnover of employees. This is the product of perception issues, as employees may not see an opportunity for continued career growth. Because of the gap, manufacturing companies must pay inflated wages to attract and retain top talent.
It’s no secret that there is a higher risk of injury for many of the manual labor positions in manufacturing. When the other alternative is a low-risk, sedentary desk job, it’s inevitable that this factor may deter some individuals from the start. The danger of the job can also play a role in the drop-off of employees.
Now that several reasons for the labor shortage have been cited, let’s explore solutions to the problem. Manufacturing companies are taking a proactive approach, here’s how.
Stop the problem where it starts—in the community—and change a negative perception by creating a positive one. I have seen this tactic in practice by a manufacturing company in western Pennsylvania. The company ventured out into the community to tell its story to increase visibility and name recognition. Its goal was to inform the community that their company offered lucrative careers with established health and retirement benefits—eliminating any remnant negative perceptions and inspiring the next generation of workers.
Providing new employees with technical training tailored to their specific role can provide invaluable benefits and help address the worker shortage. Not only will it provide them with the knowledge to be more effective and efficient at their jobs, but also to do it safely and reduce exposure to injury – a win-win situation. But new employees aren’t the only ones that can benefit from training. Across the operation, training is key for continued improvement of all employees. For example, a train-the-trainer program can ensure that the individual conducting the training has the resources needed to effectively teach and mentor others. Hiring an outside resource to oversee the training may also provide a valuable unbiased perspective.
Offering tuition reimbursement for relevant continuing education and technical skill development also allows for professional growth opportunities that employees may not get otherwise. It can deliver a tremendous benefit to the company by reducing drop-off rates and encouraging industry career growth. This opens entry-level positions for new folks entering the workforce or industry. By offering educational resources, manufacturing companies can take another step in the right direction toward alleviating the worker shortage.
Mitigating the risk factor starts with embedding safety in the culture of the organization’s operations. It starts at the top with the leadership team. Executives, Managers, and Supervisors must support and practice proper safety if they expect the work force to buy in. Furthermore, if leadership emphasizes a strong safety culture daily, it will inevitably become an integral part of the company’s success.
Automation can support the cause through improved output by making labor intensive tasks easier and more efficient. This will reduce the number of back pulls, shoulder strains, twisted ankles and other common injuries. One company at a time, this can improve the safety—and perception—of the industry as a whole.
It may also be helpful for manufacturing companies to partner with an insurance broker that provides safety services to assist with the identification of risk, provide safety training and loss control support. This can support improved safety of the entire operation.
Despite the challenges manufacturing companies are currently facing from the worker shortage, there is plenty of room for optimism, armed with strategies to combat the problem.