The Labor Shortage: How to Address One of Manufacturing’s Biggest Problems

By Danny Gavin, Association of Equipment Manufacturers

Job openings are at record highs in 2021, yet employers are struggling to find enough workers to match demand. There are around 11 million positions open, but 5 million fewer people employed than before the onset of the COVID-19 pandemic. The ongoing labor shortage in the United States is a problem that's not going away anytime soon, and the consequences that will come about due to that shortage are going to be felt in the various industries - including manufacturing - for a very, very long time.

Recent data published by Deloitte Insights indicated that manufacturers are finding it 36% more difficult to find talent today than in 2018, even though the unemployment rate is much higher than in the recent past. The reality of the situation is evident. Despite the fact jobs are in such demand nationwide, the number of vacant, entry-level manufacturing positions continues to grow.

Access more resources and information by visiting the AEM Workforce Solutions Toolkit.

Examining Manufacturing's Labor Shortage Problem

The main drivers of the labor shortage problem in manufacturing today is the competition between companies for qualified workers, and the fact there are simply aren't enough right now. Positions such as assemblers, production work helpers and hand-held tool cutters are great entry points for employees to gain a foothold in the industry. However, they are also being targeted by other organizations in other industries.

For example, a company like Amazon attempts to attract young people looking for work right out of high school. However, in the case of Amazon and many other companies like it, fewer long-term career opportunities are made available. Conversely, despite the manufacturing industry often being unfairly labeled as a stationary, low-progression and low-knowledge industry, many opportunities for career growth and skills development exist.

Manufacturers are increasingly struggling to fill middle-skills jobs as well, as they often require a hands-on, applied training program that can take between several months to more than a year. To make matters worse, some also require licensing and certification. As a result, finding new and effective ways to train the workforce of tomorrow will play a critical role in combatting manufacturing's labor shortage problem.

The Digital Transformation's Impact on Workforce

While both types of job shortages are placing significant pressure on the manufacturing industry, there is a third and larger challenge that the industry must face in the next 10 years. The digital transformation in the manufacturing industry continues to develop, and as it does new skills will be needed to be developed, refined and honed by the workforce of tomorrow.

These will likely be different from the skills used today, and many people who comprise manufacturing workforce do not possess these skills. Without making changes to the skills composition of the workforce, manufacturers could leave up to 2.1 million jobs unfilled between 2020 and 2030. In order to avoid further widening the skills gap over the course of the next decade, those within the industry need to not only broaden their understanding of the digital transformation and its potential impacts, but also prepare employees to thrive in what will be an increasingly technology-centric environment.

Perceptions, Misconceptions and Challenges

One of the largest misconceptions about these fields is that the jobs simply aren't there. A fair amount of people fear that robots will eventually take their job, or that their job will get shipped overseas. While it is true that robots can be helpful, and that there has been an influx of 2.7 million robots in industrial use worldwide, humans are still needed to produce the vast majority of goods. Robots may be able to pack and lift boxes, but humans possess the critical thinking and creativity that is needed to solve problems.

Manufacturers have been putting in a consistent effort to change the perceptions of manufacturing, but there is still a lot left to be done. Diversity and inclusion (D&I) is a major focus in the manufacturing industry right now, and for good cause. Although women represent almost half of the workforce in the U.S., less than a third of manufacturing professionals are women, and one in four women are considering leaving their positions in manufacturing.

While this is potentially due to the extenuating circumstances of the ongoing COVID-19 pandemic, it could also speak to how work is organized in manufacturing. In the 2021 Deloitte and The Manufacturing Institute DEI (diversity, equity, inclusion) study, 63% of surveyed manufacturers link the business benefits of DEI to an enhanced ability to attract, retain and develop talent.

Another key challenge is the lack of work-life balance and flexible work arrangements, as 43% of manufacturing workers believe there is a shortage of work-life balance in their field. Launching recruitment efforts at high schools, considering flexible schedules to help work/life balance, linking leadership performance to diversity, and equity and inclusion metrics can all help to attract a diverse range of talent. The Manufacturing Institute's STEP Ahead Awards is just one example of elevating women in leadership roles and recognizing their contributions within their organizations and the industry at-large.

Addressing unmet needs will ensure that employers are better able to create fulfilling career paths. Employees are increasingly investing in working somewhere that they feel a sense of belonging, or where they have trusting and caring coworkers. It is important to not only create a positive work environment, but to create a community within the workforce.

The Task at Hand

The challenges that manufacturers are facing today are likely to persist without a concentrated industry-wide effort. Creating the next generation of manufacturing workers is imperative. Building leadership pipelines and a sense of community within the workforce will allow for a more diverse environment within the industry. None of this is easy, and of course it won't happen overnight. However, every manufacturer can take steps now to build a better workforce for future generations.

For more support, ideas or information, get started by visiting the Workforce Solutions Toolkit or contact AEM Senior Director of Workforce and Industry Initiatives Julie Davis at [email protected].

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