The manufacturing industry’s pre-existing workforce crisis could get even worse according to a new 2018 skills gap study released today by Deloitte and The Manufacturing Institute — the social impact arm of the National Association of Manufacturers.
The widening manufacturing skills gap is expected to grow from about 488,000 jobs left open today to as many as 2.4 million manufacturing jobs in 2028. In turn, $454 billion in manufacturing GDP could be at risk in 2028, or more than $2.5 trillion over the next decade, according to the research.
“Manufacturers in the United States are experiencing some of the highest levels of growth we’ve seen in decades, yet the industry seems unable to keep up with the resulting rebound in job growth,” said Paul Wellener, vice chairman, Deloitte LLP, and US industrial products and construction leader. “With nearly 2 million vacant new jobs expected by 2028, compounded by 2.69 million vacancies from retiring workers, the number of open positions could be greater than ever and might pose not only a major challenge for manufacturers but may threaten the vitality of the industry and our economy.”
Five out of 10 open positions for skilled workers in the US manufacturing industry remain unoccupied today due to the skills gap crisis, according to the report. These include positions for skilled production workers, supply chain talent, digital talent, engineers, researchers, scientists, software engineers and operational managers. The study points to the top reasons these positions tend to go unfilled, with the negative perception of the manufacturing industry topping the list, cited by 45% of survey participants, followed by the notable shift in desired skill sets due to the introduction of advanced technologies and retirement of baby boomers, both at 36%.
Manufacturing executives stated the top five skill sets expected to increase significantly in the coming three years due to the influx of automation and advanced technologies are:
- Technology/computer skills
- Digital skills
- Programming skills for robots/automation
- Working with tools and technology
- Critical thinking skills
To mitigate the impact of the skills shortage and begin to shrink the gap, most companies surveyed are focusing efforts on several specific areas, including adopting broader HR management practices to hire and retain talent, cited by 37%, and building knowledge transfer programs to pass on skills between retiring and new workers, cited by 32%. Twenty-four percent have turned to outsourcing certain functions, according to the report.
Additional approaches surveyed manufacturers are taking to solve the employment challenge include:
- Adopting learning and development programs
- Increasing flexibility in the hiring process
- Tapping retiring, experienced workforce
- Turning to automated technologies and embracing technology
- Increasing wages and offering signing bonuses