The Manufacturing Skills Gap and What Can be Done

One of the biggest challenges facing the manufacturing sector today is the skills gap that exists among the workforce. According to a 2015 Manufacturing Institute study:

The skills gap is widening, and over the next decade, 3.4 million manufacturing jobs will likely be needed. In addition, our study estimates 60 percent of these positions are likely to be unfilled due to the talent shortage. As a result, only 1.4 million out of 3.4 million positions are expected to be filled, implying that the U.S. manufacturing sector is likely to suffer a shortfall of 2 million workers over the next decade.

This lack of skilled workers has dire consequences for the industry as a whole since manufacturers won’t be able to keep up with demand, develop new products, or expand into new markets. A CareerBuilder study estimates that, on average, a company loses more than $14,000 for every job that stays vacant for three months or longer. The gap becomes even more trying now that manufacturers are more likely to reshore as the wage differential closes and offshore supply chain costs rise.

Primary factors contributing to this gap:

Baby boomer retirement/negative perception of manufacturing among young workforce

It’s estimated that approximately 2.7 million jobs will be created when workers retire from manufacturing between 2015 and 2025. (Source) This doesn’t even include the jobs that will be created due to expanded operations. Unfortunately, the perception of manufacturing and a career in the industry is not great among a younger workforce who think of the industry as “dirty and dangerous.” It’s the least preferred career destination among Gen Y. The manufacturing industry as a whole must work towards improving this perception through educational programs geared not only towards the youngest workforce, but also to their parents, so that they’d be more likely to encourage pursuing this career path to their children.

Lack of STEM skills

Tech education programs have been in decline in public high schools. According to a 2014 Wall Street Journal article, apprenticeship programs that combine on-the-job learning with mentorships and classroom education fell 40 percent in the U.S. between 2003 and 2013.

Automated processes

While automating manufacturing processes is crucial to the success of the industry to improve efficiencies, it is a trend that requires workers that are more technically skilled than the less skilled workers that made up a significant percentage of the manufacturing sector in the past.

In addition to improving the overall perception of manufacturing and investing in programs that cultivate STEM interests, manufacturers also must be doing the following:

Developing existing employees

Attracting new workers isn’t the only solution. Manufacturers must also be developing current employees internally via training and development programs and encouraging employee growth into new, more challenging roles. This can be done with both formal classroom and experiential training.

Improving overall branding efforts

A positive overall brand and perception of both an individual company and the manufacturing sector as a whole makes it easier for HR and recruiters in the industry to appeal to top talent. Potential employees are researching everything about a company before considering employment and the perception of each marketing touchpoint can make a big difference.

Manufacturers have a long way to go towards closing the skills gap. But with a measured approach that addresses each of the contributing factors, it can be achieved.

About the Author

Cheryl Beebe

Cheryl graduated from Providence College with a Bachelor of Science degree in Accounting. She has worked in the accounting and finance field for 20+ years in Real Estate/Construction, Asset Management, Telecommunication, Information Technology/Software, non-profit, Diamond Industry, and Manufacturing. Cheryl is currently the Chief Financial Officer at Fishman Corporation, a manufacturing corporation based in Hopkinton, MA.

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