Deloitte ran an extensive report on the state of the manufacturing industry in the U.S. and the current shortage of workers. The writeup and analysis is great, but it’s accompanied by a lot of great data, charts, and anecdotes so the original article is highly recommended. If you don’t read it all, there are some really great nuggets that are worth taking a close look at, the abstract of which is that there is a major shortage of manufacturing workers, and that without focused effort, this gap is only going to get wider over the next 10 years.
The manufacturing industry netted a loss of 578,000 jobs during the pandemic-challenged year 2020—a figure that represents nearly six years of job gains, and yet, at any given moment in the past six months, nearly 500,000 jobs have remained open in manufacturing.
Surely some of these open positions are companies recently bouncing back, but taken at face value, this is a spread of about 1 million jobs i.e. 1 million less willing and able manufacturing workers than there was at the start of 2020. If this doesn’t close by the end of the year it means that manufacturing faces hurdles in both attractiveness of jobs, and also workers skilled enough to fill these positions.
There was a time where digital technology wasn’t ubiquitous in manufacturing, but for years now, industrial engineers have needed to have a diverse set of capabilities and a high degree of software and technology skills. Machinists and assemblers less so, but that is quickly changing. In the near future, most manufacturing employees will be working alongside robots or computer aided manufacturing lines that require frequent manipulation and interaction.
Adding more cobots or other sources of automation could help maintain production, but it also puts pressure on a plant to upskill workers quickly to absorb the new technology. Manufacturers that haven’t thought through this workforce transformation can find themselves struggling to adapt. In the 2020 Deloitte Global Human Capital Trends Study, 75% of industrial organizations identified reskilling the workforce as important or very important for their success over the next year, but only 10% said they were very ready to address this trend.
This is important, but not especially novel — of course more technological skills are needed as technology progresses. But even if this is resolved, there is still a gap in the demand for this type of work. The two most salient pieces worth covering here are work/life balance and diversity.
Work/life balance is the number two priority behind “attractive income/pay” when respondents choose where to work. However, it is also the top area where respondents believe manufacturers fall short, and work/life balance is the top reason that respondents are considering leaving the manufacturing industry.
For much of manufacturing, this is going to be an increasingly pernicious issue, especially as educational and skill demand rises within the industry. An increasing number of companies are able to have remote work and especially after the pandemic, more may allow it. Remote work isn’t really possible for many manufacturing jobs, especially in the near term. And while some flexibility can be built into manufacturing, it’s not quite like doing email all day.
Increasing the potential pool of employees is another way to help fill the labor shortage. The more that manufacturing companies find a way to attract, include, and retain less represented groups, the more people may gravitate towards the industry.
Most manufacturers are on the journey to develop a diverse and equitable organization. As one executive noted, “I don’t care if we are really good at recruiting more than our fair share of diverse talent. At the end of the day, people leave because of culture and the environment they’re working in.”
Shrewd, and even simple business perspectives have a way of piercing through politics, opinions and intentions. The bottom line is that if workers don’t like their employment, and have more attractive options, they don’t have to stay put. The 500,000 worker gap is proof they won’t. Read the whole article here.