As the Skilled Labor Force Disappears, How Can Manufacturing Grow?

For years, economists and business consultants warned us that a huge gap in skilled labor was coming and that it would be a challenge for our economy.

In 2015, Deloitte predicted, “Over the next decade nearly 3 ½ million manufacturing jobs likely need to be filled. The skills gap is expected to result in two million of those jobs going unfulfilled.” 

Today, everyone in manufacturing is seeing that prediction coming true. The gap is continuing to widen and affect vastly different industries—from food and beverage factories to electronics manufacturers. Unfortunately, when your plant location is short on skilled labor to diagnose and repair automation or equipment failures, this shortage quickly becomes extremely apparent and impactful.

No one is predicting that this situation is going to get better any time soon. Therefore, we need to focus our thinking on the important questions:

  • Why do we have this growing shortage?
  • How can we work through shortages in smarter ways?
  • How can we can use our limited supply of skilled laborers more wisely? 

And let’s be clear about that hard fact—this is a long-term problem. What we are experiencing is best viewed as a perfect storm. All the worst ingredients have come together—and are continuing to come together—to expand this gap in skilled labor.

Image courtesy: Pixabay

Image courtesy: Pixabay

For starters, all manufacturers depend on automation to increase efficiency. Whether you’re making electrical components for mobile devices or bottling beer, automation is key to the manufacturing process. However, all of that automation still requires skilled labor to install it, repair it, and maintain it.

Plus, gains in efficiency and productivity are being realized as new technologies are being integrated all over the plant floor. We’re adding more intelligent tools, collecting more data, and networking more machines, but we’re also increasing the need for skilled labor to make use of that data. 

So where did all these people go? The most obvious explanation is, Baby Boomers (born between 1946 and 1964) are retiring. And when they clock-out for the last time, they will take at least 20 to 30 years of institutional knowledge with them.

This core group of our workforce has left quite a gap, and millions of positions remain unfilled around the country. According to the U.S. Bureau of Labor Statistics, “Companies in the U.S. can expect to feel the pinch even more severely in the future as more than 76 million baby boomers age, and their current labor participation rate falls from 80% to below 40% by 2022.”

Another reason for the gap in these skilled laborers is simply because young professionals with science, technology, engineering, and mathematics (STEM) backgrounds are choosing more lucrative employment options with startups or technology companies that offer clean, comfortable offices, rather than loud and less comfy manufacturing environments.

Downtime in manufacturing caused by automation and equipment failures is expensive and disruptive, so let’s pivot and examine some ways to work smarter during this challenging time.

For starters, manufacturers in all industries should wisely invest in remote monitoring and diagnostics technologies, which can help minimize downtimes. Such investments can help quickly identify the origin of a problem faster and help specify the type of technician you need to repair it.

We’re starting to see investments in artificial intelligence and machine learning, which can help manufacturers can detect issues and perform preventative maintenance before a problem can become catastrophic. These tools will become more accessible to more manufacturers as the costs to implement them come down.

Most importantly, we need to optimize how we find and hire our limited supply of skilled laborers. Why hire a highly specialized technician to fix a problem that any generalist can handle? When there’s an issue, manufacturing facility managers should strive to match each problem with the right technician.

This is especially important because so many manufacturers depend on independent contractors—but not all independent contractors are equally qualified. We should not only verify licenses, insurance coverage, background checks, and certifications, but also specific levels of experience in advance to find and hire the person with the right skills.

Technology helps us find everything from an available seat in a nearby rideshare to nearly every home for sale everywhere within your preferred price range. With similar technology, we can wisely find and hire the exact individuals needed to quickly fix our automated manufacturing failures and equipment breakdowns.

The skilled labor gap in manufacturing is here to stay for the foreseeable future. We must all change and use our limited supply of skilled laborers more wisely.  Downtime is not just bad for one factory. It’s bad for our economy.

2 comments on “As the Skilled Labor Force Disappears, How Can Manufacturing Grow?

  1. agathabang
    April 11, 2018

    Great work

  2. Rharding64
    April 27, 2018

    I have worked manufacturing as ee and sw engineer since 1996. I design and build tools for use here in the states and overseas. The scope of my work has involved reverse engineering existing systems, upgrades of those systems and design and build of new systems from the ground up. I always have taken the end user abilities as system requirements so end user comprehend the context. I am available right now for employment most likely ocer the next 20 years. Feel free to contact me.

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