I found it interesting that among U.S. manufacturers participating in a new survey, 83 percent expect their revenues to go up in the next year. That’s according to the findings from the Q4 2012 Manufacturing Barometer released by PwC. What’s more, 58 percent of the respondents said they would be hiring, up 21 points from the same period in 2011. Those who are hiring said they are looking for professionals/technicians, skilled laborers, and production workers.
At the same time, an article in The American also is on my mind because it notes that while a shortage of skilled manufacturing workers in the U.S. is generally acknowledged, estimates of the size of the shortage vary widely. For example, the article cites research from Boston Consulting Group, which found the skills gap in U.S. manufacturing to be more limited than many people believe, and is unlikely to prevent a projected resurgence in U.S. manufacturing.
“Shortages of highly skilled manufacturing workers exist and must be addressed but the numbers aren’t as bad as many believe,” says Harold L. Sirkin, a BCG senior partner and coauthor of the firm’s research.
Nevertheless, The American article also references a September 2011 , “Boiling Point? The Skills Gap in U.S. Manufacturing,” commissioned by Deloitte and the Manufacturing Institute. The online survey of U.S. manufacturing executives found that 83 percent of participating American manufacturers reported a moderate or severe shortage of skilled workers. That translates into approximately 600,000 unfilled skilled manufacturing positions.
The manufacturing skills gap is forecasted to worsen in the near term as well. While BCG and the Manufacturing Institute differ on the current number of unfilled positions, they both agree that certain demographic realities will contribute to a much greater skilled worker shortage, explain the article’s authors--Thomas A. Hemphill (associate professor of strategy, innovation, and public policy at the University of Michigan’s Flint campus), Waheeda Lillevik (assistant professor of human resources and management at the College of New Jersey), and Mark Perry (a scholar at the.
A U.S. Department of Labor statistics show the percentage of manufacturing workers aged 55 to 64 years and the share of workers older than 65 years have both significantly increased since 2000. The shortfall of skilled factory workers due to the aging manufacturing workforce and the resulting retirements of older workers, occurring at the same time a manufacturing rebound is expected—driven by U.S. manufacturers trying to bring millions of factory jobs back to the U.S.--will further increase demand for skilled workers.
The solution to closing the skills gap will most likely require two things to happen. For one thing, those entering the workforce will need the education and marketable skills in demand by manufacturers. A key aspect to this may be the Skills for America’s Future program, an industry led initiative with the goal to improve industry partnerships with community colleges and build a nation-wide network to maximize workforce development strategies, job training programs, and job placements. Central to the program is a Manufacturing Skills Certification System, which will give students the opportunity to earn manufacturing credentials that will travel across state lines.
Secondly, it warrants pointing out that not all of the concessions should be made by the prospective workforce. If companies are going to entice and recruit people to join the manufacturing workforce, employers must be willing to pay competitive wages and assume some of the employee training costs. If they do so, they will be better able to retain quality employees and continue to reap the benefits of their personal investment.
What do you think? Is there a so-called manufacturing skills gap? If so, how bad do you think it is?