Blog Post | Employee Retention
December 9, 2019
Since 2010, we’ve added 1 million new manufacturing jobs to the US economy—that’s a 400% boost—and yet hiring has remained almost flat. Anyone in the manufacturing industry will likely point to one culprit: the manufacturing skills gap. In fact, 73% of manufacturers cite the skills gap as their top concern.
In short: there aren’t enough skilled workers to fill all the positions opening up in the trades. Thanks to this perfect storm of a changing industry, an aging workforce, and a misperception of manufacturing work among the younger generation of workers, nearly 2.4 million manufacturing jobs could go unfilled by 2028.
But it’s not all bad news. There are 7 tangible ways you can close the skills gap and prepare your company for the future of manufacturing:
Studies have found that, while many manufacturing employers cite in-house training as a priority, in almost all contexts the pace of change has exceeded companies’ ability to develop training programs to keep up with the times.
Increasing your investment in training programs (especially those that focus on integrating digital technologies) will result in a well-trained workforce, a competitive advantage that will let your company drive innovation, customer satisfaction, productivity, and growth. All this with beneficial by-products like a more engaged workforce and higher retention rates.
While in-house training programs are a great investment for most businesses, there are other options for companies that don’t have the time or resources to devote to building these programs.
In their report, Deloitte called out one area that’s a prime candidate for further exploration: public-private partnerships. Right now, only 2/10 manufacturers partner with the government and only 3/10 partner with private education companies to train their workforce.
Forging long-term partnerships with public education, industry associations, and agencies to develop programs that build a strong connection with the industry will help create a skilled talent pool that will help benefit your business and the industry at large.
When developing training programs, it’s important to focus on the skills that are most important for your business. Take a look at both the jobs you’re trying to fill and your current workforce. What kind of training and development will help you promote and retain your most talented employees? What major skill areas are missing?
It’s also important to keep in mind the skills that are most in-demand in manufacturing right now. Because, as the industry continues to change and adapt, these are the areas that are predicted to become the most vital to the future of work.
For years, high school students have been encouraged to go to college to pursue academic degrees rather than vocational or technical training (despite the fact that many technical industries have lots of job opportunities). Why? Mostly it’s an image problem. In a Deloitte report, less than half of Americans surveyed believed that jobs in manufacturing were “interesting, rewarding, clean, safe, stable, and secure.” The result is that vocational courses in high school were often viewed as “second class”.
The reality? The United States has 30 million jobs that pay an average of $55,000 per year and don’t require a bachelor’s degree. And, according to the US Department of Education, people with career and technical education are actually more likely to be employed than their counterparts with academic credentials.
The more you can present these facts and focus recruiting efforts on changing the viewpoints of a younger generation of workers, the faster you can fill those vacant positions. And you won’t be alone: Recently, California spent $6 million on a campaign to revive the reputation of vocational education and $200 million to improve the educational offerings available.
One way to appeal to a younger workforce is with an age-old method of training: apprenticeship programs. These kinds of programs often appeal to a workforce looking to move into a manufacturing position for the first time. They offer: instant hands-on experience, paid work while they learn, and the promise of steady employment at the end of their training.
The strongest apprenticeship programs will offer some combination of classroom training, hands-on experience, and mentorship. And, to be successful, they will need a strong commitment from everyone: from senior management to frontline supervisors and workers themselves.
But it’s worth the investment since apprenticeships are one of the most effective ways to increase worker skills, meet employer needs, and enhance performance outcomes. How effective? 91% of apprentices that complete an apprenticeship are still employed nine months later, according to the US Department of Labor. And, on average, they earn $300,000 more over the course of their career than non-apprenticeship workers. And businesses can reap other benefits like:
A steady pipeline of qualified workers
Customized training tailored to your business needs
Increased knowledge transfer between long-term and new employees
There are also ways to offset the costs of building an apprenticeship program, including state tax credits. Download an apprenticeship toolkit to get started.
One of your core assets may also be one of your most underutilized: we’re talking about the 2.6 million baby boomers set to retire in the next decade. Many of these experienced workers hold incredible depths of knowledge. And, since most of this know-how isn’t formalized or recorded anywhere, it risks being lost.
Right now, only 9.2 percent of manufacturing companies have created roles targeted for older workers, so harnessing the experience of this group could be a major differentiator for your business. Consider creating a mentorship program that pairs incoming workers with more experienced employees. Or find out which employees might be interested in taking on short-term projects or being involved in mentorship/training after retirement.
In its future of jobs report, the World Economic Forum highlighted that by 2022, machines and algorithms will contribute 42 percent of total task hours, compared to 29 percent in 2018. In the last 3 years, nearly half of the executives surveyed in Deloitte’s report on the skills gap have implemented automated technologies in the form of robots, cobots, machine learning, or AI.
While workers once worried that automation would replace them, the opposite has become true. Highly skilled workers are more sought-after than ever. In fact, many employers are using automation to supplement the more rote jobs so they can focus existing workers on more highly-skilled work.
64% of executives surveyed said that creating human-machine collaboration has allowed them to overcome some of the challenges they’ve faced filling open positions. In short: automation is here to stay and that’s good news for both workers and employers.