The “Skills Gap” within the Manufacturing Industry
One of the most pressing challenges facing manufacturers today is filling the needs of the industry with a qualified workforce. The “skills gap” that exists between needs of the industry and the qualifications of the incoming workforce is even more drastic than manufacturers had previously anticipated. A recent report on the skills gap in the manufacturing industry by Deloitte and the Manufacturing Institute revealed some very telling information.
There will be roughly 2 million unfilled manufacturing jobs by 2025, less than 10 years from now, according to a new report from the Manufacturing Institute. For manufacturers across the nation, this is disturbing news. The two primary drivers of this trend are the accelerating retirement rates of current manufacturing workers and an anticipated expansion of manufacturing in the U.S. projected over the next several years. The report concluded that 2.7 million new workers will be needed to replace retiring workers, and another 700,000 to meet the needs of “natural business growth.” Already today, about 60% of the unfilled manufacturing jobs are attributed to a shortage of applicants with the required skills. The report also found that manufacturing jobs on average pay 20% more than other industries, and 80% of manufacturing executives said they would be willing to hike compensation even more if credible candidates applied for work. In addition, most manufacturers are beating the bushes for qualified candidates and offering inducements, but they are finding it a hard sell. In the meantime, manufacturing workers are plugging the gap through overtime, putting in 17% more hours on average than workers in other fields.
Another major driver for the skills shortage beyond retirement and rapid industry growth is that manufacturing still has an outdated, negative image among many young people. The American student population has been conditioned to the status quo aspiration of pursuing 4-year degrees after high school. This “college for all” mentality has contributed to the negative image that skill-trades has among young adults. Also, the rapid advance of technology is raising the bar for working in modern manufacturing, and the public schools generally are doing a poor job of teaching the STEM subjects (science, technology, engineering and math). Some experts also fault industry for not providing sufficient training to applicants interested in manufacturing careers through on-the-job instruction and apprenticeship programs. Between 2003 and 2013, manufacturers reduced by 40% investments in various forms of internal skills development programs that combine on-the-job learning with mentorships, apprenticeships, and classroom education.
Manufacturers that want to be competitive and profitable in the years ahead will have to take aggressive action. They cannot afford to wait for the public schools to do it for them. They must foster internal training programs and become directly involved with local high schools, trade schools, and community colleges to create a reliable stream of qualified candidates.
For more information on the manufacturing skills gap and what the industry needs to do to address it, watch the video “Success in the New Economy” by Kevin Fleming of Citrus College at:
To read the full Skills Gap Report by Deloitte and the Manufacturing Institute, click below: