While economists closely follow the national unemployment statistics reported monthly by the U.S. Department of Labor, this does not always accurately reflect the challenges faced by manufacturing companies looking for skilled talent in today’s workforce.
There is a combination of factors at play, including the need for newer skills created by the digitized manufacturing landscape as well as the shift from a baby boomer economy to younger generations. In their third manufacturing skills gap report, “The Skills Gap in U.S. Manufacturing: 2015 and Beyond,” Deloitte and The Manufacturing Institute estimated 2.7 million baby boomers will retire by 2025, which will cause an enormous labor shortage to fill.
Although the younger generation typically would step into those roles, the manufacturing industry is facing an identity crisis. Younger workers associate manufacturing jobs with pollution, as well as repetitive and potentially dangerous work, even though new technologies significantly have improved manufacturing processes. As a result, the manufacturing sector needs a modernized management strategy that articulates a new vision for the industry. It also will require investing in the resources and job training that will enable a young workforce to see a lasting and successful career in manufacturing.
For the leaders facing mounting pressures to keep up with the consequences of the widening skills and labor gap, the most effective strategy is to begin internally, with the development of robust in-house training and recruitment programs.
In research conducted with support from Bank of America Merrill Lynch, the Urban Manufacturing Alliance surveyed and interviewed hundreds of manufacturers across six cities for the “State of Urban Manufacturing” study. In that research, larger manufacturing firms said they mostly hire people referred by current employees and through services like online job boards. But the fact that these manufacturers also reported a struggle to find qualified employees suggests traditional hiring practices could use an overhaul.
According to another recent study conducted by The Manufacturing Institute and Deloitte, Americans strongly believe targeted programs would be a valuable resource for driving new growth opportunities. Many of these in-house programs can tap the in-depth expertise of senior employees before they transition into retirement.
Equipping all current and future employees with these resources is not only critical for addressing the talent shortage in the short term, but it’s also a clear demonstration of a company’s investment in its employees, which helps attract and retain talent for long-term growth.
Influencing the educational system
To help ensure a skilled workforce of the future, organizations can partner with local high schools and colleges to redefine the perception of the industry and introduce students to the required technical skills before they enter the workforce.
Companies may benefit from presentations at job fairs or providing internship and apprenticeship opportunities to help dispel myths about the manufacturing industry. These programs offer hands-on experience without the full commitment of employment. Students get a better idea of what the job entails, while employers can identify strong job candidates.
Reaching untapped populations
Manufacturing leaders also can address the current skills gap by turning to untapped populations, such as refugees, immigrants or other nontraditional work pools. Innovative recruitment initiatives include Baltimore’s Second Chance, which trains individuals with criminal records and helps connect them with manufacturing jobs that work with deconstructed building materials, and Detroit Kitchen Connect, which helps food manufacturers from refugee and immigrant communities get their products to market.
The future success of manufacturing depends on a renewed commitment to the workforce. Whether it’s leveraging current employees and soon-to-be retirees, familiarizing students in the classroom with manufacturing industry opportunities or tapping into a nontraditional workforce, keeping up with the momentum of today’s industry begins with empowering and enabling all levels of the workforce.
Scott Fiser is senior vice president of global commercial banking for Bank of America Merrill Lynch in Grand Rapids.