Rumors have been flying for years that the United States manufacturing industry is dead. And the evidence is everywhere. American-born companies like Maytag and General Motors have moved operations overseas. Factories of all sizes have decreased in number since 1998. Politicians bring it up regularly, making promises to “bring jobs back” to the U.S.
And yet, if we’re talking manufacturing jobs, the industry itself certainly is not dead. Or if it is, the cause may have less to do with a lack of factories and more to do with a lack of workers. The jobs are here. It’s the employees who’ve moved on to greener pastures.
Recently, 78% of manufacturing executives and hiring managers said they had plans to hire more skilled workers within the next year. Just 10% said they wouldn’t. According to a U.S. manufacturing survey by QuickBooks, the top three most in-demand hires would be production supervisors, machinists, and pickers/packers. The struggle, they say, is finding skilled workers.
48% of respondents said it takes 3-4 weeks, on average, to fill a skilled manufacturing position. 22% said it was closer to 2-3 months. That’s weeks to months of unfulfilled need. The result is lost productivity and production and increased stress for those most eager for more helping hands.
It’s possible, then, that the U.S. doesn’t have a manufacturing problem at all. It has a hiring problem.
If your manufacturing plant has been suffering, here’s why and how to fix it.
Where did all the talent go?
89% of global manufacturing executives agree there is a talent shortage in the U.S., according to Deloitte and the Manufacturing Institute. And there are a few different reasons for this, including:
- A skills shortage
- A lack of interest by young people
Overall, 53 out of 100 manufacturing jobs (2.4 million) were left unfilled in 2018 because of a lack of skills. Not helping these conditions is a record-low unemployment rate of 3.6% (in manufacturing, it’s 3.1%) and a mass exodus of baby boomers, the industry’s most-employed generation.
Evidence of too few workers can be seen in employee time cards, as well. 49% of manufacturing workers clocked overtime within the last year. That’s higher than the percentage of attorneys and software developers who said they clocked overtime in 2018.
The struggle seems obvious: Jobs exist. But the people needed to fill them are untrained and unexcited about starting a lifelong career in manufacturing. And that’s despite the fact many in the manufacturing industry say wages have gone up.
“83% of [global manufacturing] executives offer higher pay to attract and/or retain skilled workers,” says Deloitte. Yet 66% of those respondents also said they’ve seen skilled workers leave to accept outside positions for even higher pay. So what’s a manufacturing plant to do?
Generations Y and Z might be the answer
If generations Y and Z (those born after 1977) were to find the future promising in manufacturing, there might be enough employees to fill all the seats once held by retiring workers. But those employees need proper training, too. After all, it’s not entirely a lack of people causing the problem. It’s a lack of qualified people. If workers don’t fill those 2.4 million vacant manufacturing positions, the industry could lose $454 billion by 2028.
Fortunately, the skills most needed in the manufacturing industry of today and tomorrow may be a good fit for what’s considered the “always-on” generation Z. Such individuals most commonly think of themselves as tech experts and go-getters.
That’s good news for manufacturing executives, who told Deloitte the top skill sets needed in the next three years include technology/computer skills, digital skills, and programming skills for robots/automation.
Unfortunately, the manufacturing industry is missing something critical gens Y and Z hold dear: work-life balance. A recent article by the New York Times highlighted the fact that gen Z prioritizes jobs that offer flexibility, mental health benefits, and PTO (including paid family leave). But unlike office jobs where an employee could get their work done anywhere there’s a decent Wi-Fi connection, many manufacturing positions require hands-on, boots-on-the-ground attention--at least until robots are doing all the grunt work, as assigned and programmed by out-of-office techies.
It’s time to bite the pay and benefits bullet
Since 2015, there’s been a “15% increase in the number of companies offering higher pay to skilled workers,” says Deloitte. Yet the average hourly pay for a production/manufacturing employee rests around $16.58, reports the U.S. Bureau of Labor Statistics (BLS).
Manufacturing companies may be boosting pay, but it’s not yet enough to attract the young, tech-savvy workers the industry needs to progress. And the same goes for benefits spending. While benefits spending in the manufacturing sector has gone up over the last 10 years, there’s always room to grow—particularly in the vein of flexible work opportunities.
Manufacturers are serious about wooing new talent. But hiring all the folks they need may require companies to reconsider how they evaluate an employee’s worth.