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Manufacturers Are Asking, “Where Did the Skilled Workers Go?”

October 8, 2014

Manufacturing Services Group

According to a recent Wall Street Journal MarketWatch article, the number of jobs being filled in the U.S. each month is lagging behind an increase in job openings for the first time in more than a decade. Randall Stephenson, CEO of AT&T, says, “The main issue that businesses face today is a skillset mismatch.” The jobs that seem to be most lacking in qualified workers are those requiring technical skills in the math and science fields.

As manufacturing jobs are increasingly automated, these technical skills are critical to many jobs in this sector.

A 2014 study completed by Accenture takes a look at the issues manufacturers are facing when it comes to finding skilled workers, and it identifies some best practices for how businesses can build a talent pipeline to address this problem. The study, conducted from August 2013 through January 2014, surveyed more than 300 executives from U.S. manufacturing companies with average annual revenues of $100 million.

Key takeaways:

  1. 75%+ of manufacturers report a moderate to severe shortage of skilled workers. For purposes of the study, a skilled worker is defined as someone with an associate degree or equivalent 12-24 months of training and/or experience.
  2. 80%+ of manufacturers report a moderate to severe shortage of highly skilled manufacturing workers. For purposes of the study, a highly skilled worker is defined as someone with a bachelor’s degree or equivalent 36 months of training and/or experience.
  3. Skills shortages are costing manufacturers up to 11% of earnings annually.
  4. The largest bottom line hit from skills shortages stems from increased overtime costs. Companies are forced to use overtime to maintain base production volumes, leaving themselves unable to address peak customer demand.

Best practices for business in developing a talent pipeline:

  1. Self-paced online training
  2. Partnering with local community colleges and high school vocational programs
  3. Collaborating with colleges and universities
  4. Internal certifications for skill-building
  5. Apprenticeships
  6. Expanding the job candidate pool: Stop looking for the “perfect” candidate. Look for basic knowledge and motivation even when specialized skills are absent. Look for more general skills from other industries and geographies that can be tweaked and built upon to perform the job.

The manufacturing sector is facing a serious problem finding the skilled workers it needs now. Due to an aging workforce, we will only see this problem increase in the coming years without a serious effort to revamp the pipeline of future skilled labor. All of the companies surveyed that were experiencing success in their current workforce were using one or more of the best practices identified above to develop talent. 

Let’s do the hard work now and fix the skilled labor issue before it gets too big.


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