by Susan Jeffery
06 Feb 2020
Addressing the skills gap in manufacturing: Labor shortage and associated factors
The Future of Work is Here. Can Your People Keep Up?
The shortage of skilled workers has become a very real problem for the manufacturing industry – and one that can have a significant negative impact.
Without the right people with the right skills, a manufacturing company simply cannot attain the operational excellence and productivity required to thrive. The ability to bring products to market cost-efficiently – all while meeting strict government regulations – is severely hindered. And digital transformation is throttled. You may have first noticed the drying-up of suitable talent a few years ago; well paid jobs that used to be filled immediately started taking a month, then two, then three to fill. Before you knew it you had a backlog of openings and very few ideal internal or external candidates with the skills required to step-up.
What’s creating this skills gap?
For many it’s been the arrival of the 4th industrial revolution – aka Industry 4.0 (I4) – which is often defined as the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality and artificial intelligence are changing the way we live and work.
For manufacturers, the trends that characterise I4 are particularly pervasive, and can be seen in smart manufacturing, smart factories, lights-out manufacturing, and the Industrial IoT.
Technology is rapidly accelerating, and herein lies the problem. The skills required to operate these emerging technologies and evolving needs are vastly different to the skills typically required for the manufacturing jobs of decades past. Not only that, but the shelf life of these skills are getting shorter and shorter as technology exponentially accelerates.
This of course dramatically impacts the availability of key skills. Technology is outpacing human adoption and it is proving a serious challenge for industry professionals to continually acquire and evolve the necessary skills. And this, coupled with the struggle to acquire talent in such a highly competitive industry, is a key factor behind manufacturing companies struggling with a skills gap that is impacting the business. Put simply, if you want your manufacturing company to stay ahead, you need to know how to recruit, retain and continually develop and reskill your people.
In the following chapters we’ll look at the main skills gap issues your company needs to address and offer some practical insights into how you can tackle those challenges and drive business success and innovation.
Chapter 1: The Labor Shortage and Associated Factors
It wasn’t so long ago that your competition for talent existed primarily within your postcode.
But consider this, with a 2018 Deloitte study2 suggesting that the manufacturing skills gap shortage will leave 2.4 million positions unfilled in the US alone (putting $2.5 trillion in manufacturing GDP at risk over the next decade) this seemingly North American problem is beginning to drain talent from across the Atlantic.
“Manufacturers are finding themselves competing for talent globally and against industries they never thought of,” explains Mike Bollinger, VP, Global Thought Leadership & Advisory Services at Cornerstone. We’ve already seen signs of this in the UK where there was a 24 percent growth in online advertising for Level 3 and above jobs in manufacturing and engineering from 2016 to 2018 - second only to the legal, financial and accounting sector (41 percent).
What else is driving the labor shortage?
On the macro side, you have near full employment, while on the micro side there’s a shortage of supply to meet the demand for the right skilled workers required for I4. Consider Deloitte’s2 new ‘personas’ for manufacturing labor:
- the digital twin engineer
- predictive supply network analyst
- robot teaming coordinator
- digital offering manager
- drone data coordinator
- smart factory manager.
These personas differ greatly from the traditional roles typically advertised for in decades past. Compounding this further, the battle for talent isn’t helped by the persistent misconception that the manufacturing industry lacks sophistication. “Manufacturing requires a new technologically savvy worker who operates in unison with sensored machinery and processes,” explains Bollinger. “But knowledge workers span all industries and manufacturing is not top of mind, or as attractive, to the next generation of workers.” So how do you make manufacturing more attractive?