Work to Narrow Manufacturing Skills Gap

Copyright 2020

The numbers don't lie. The Manufacturing Institute estimates that there will be 4.6 million job openings in the U.S. manufacturing industry from 2018 to 2028, but only 2.2 million of those positions will be filled. That leaves a skills gap of roughly 2.4 million workers.

Many of hard-to-fill positions will be in critical job categories, such as digital talent, skilled production and operational managers. While those positions remain vacant, companies may struggle to deliver open orders, expand production and respond to customer needs.

Potential Causes

Research has shown that several related factors have contributed to the gap. Due to an increase in U.S. manufacturing activity, the need for skilled workers has grown. Combine this with a wave of retirement among the Baby Boomers born between 1946 and 1964. By 2030, more than 20% of Americans will be age 65 and older, compared with 13% in 2010, according to the U.S. Census Bureau.

This graying of America further depletes the pool of skilled laborers for the manufacturing industry, especially among upper-level managers. It's critical for the industry to attract and train younger workers.

"We've got six to seven openings all the time, and our turnaround is low," said Jody Fledderman, chief executive officer of Batesville Tool & Die in Indiana."There are new positions that aren't getting filled. We're trying to develop young people that can stay in industry for years." His company has reacted by partnering with local high schools in developing a technical program for students.

What's more, it is becoming increasingly difficult for U.S. manufacturers to fend off challenges from overseas. "If we can't fill the skills gap, it's going to be very difficult to be competitive in the global market," said Ted Toth, vice- president and managing director of manufacturing technologies at Rosenberger-Toth, a New Jersey manufacturer.

Many manufacturers report a gap between the skills their businesses need, and the skills available in the labor pool. Nevertheless, the sector remains generally optimistic about the future and expect conditions to improve.

Five Steps to Help Close the Gap

To help bridge the gap, manufacturers must do a better job of creating a pipeline of workers. Here are five proactive steps to consider at your firm:

1. Establish partnerships with local schools. Manufacturers need to work together with local institutions, including community colleges and high schools, to train employees for the types of jobs that remain open. In particular, community colleges can be good partners because of their ready accessibility to students, close location (there are community colleges in all 50 states and the District of Columbia), flexible curricula and class schedules, and liberal admissions policies. (In many states, community colleges offer open admission.)

2. Institute apprenticeships. Generally, manufacturing jobs require at least a high school diploma and certification, but few manufacturers take the time to actively recruit at high schools. Because about 30% of high school graduates don't go on to college, firms are missing out on viable candidates. This could be mitigated by apprenticeship programs that can train workers and show students the possibilities.

3. Join a nonprofit coalition. Local nonprofits may act as facilitators in connecting workers with jobs. Such organizations — which may coordinate efforts with local government agencies, industry associations and community colleges — are gaining traction throughout the country.

4. Authorize portable certification. The Skills Certification System, offered by the Manufacturing Institute and approved by NAM, provides industry-recognized credentials that may be recognized nationwide and across multiple manufacturing sectors. It can also be used to upgrade credentials due to changes in technology and job descriptions. Increased use of the system may save training time and money.

5. Broaden the search. All too often, workers who are good candidates for manufacturing jobs don't pursue these positions because they are discouraged by traditional views of shop-floor work. Reach out to high school students through job fairs and other means to shine a more positive light on the industry. When more students are apprised of the opportunities, more will choose this career path. Finally, manufacturers may seek to add more women to their workforce in what has historically been a male-dominated industrial sector.

You don't have to be limited by these five suggestions. Try to expand your operation by thinking outside the box. For additional assistance, contact your financial advisors to develop creative ways to expand your workforce with new hires who can expect to grow and prosper with your firm.