In 2021 there was a lot of talk around “The Great Resignation.” As a result of this ensuing talent shortage, especially in the manufacturing industry, I discovered some shocking statistics.
According to a new study by Deloitte and The Manufacturing Institute, the skills gap in U.S. manufacturing could result in 2.1 million unfilled jobs by 2030. The cost of those missing jobs could potentially total $1 trillion in the year 2030 alone.
The manufacturing industry lost roughly 1.4 million jobs when the pandemic struck in 2020. The industry is still struggling to hire even entry-level and skilled workers. But we found a unique solution that, strangely, not a lot of people are considering.
“The Great Resignation” has now moved towards “The Great Reshuffle,” in which hiring has outpaced the quit rates of 2020. While there are still many manufacturing employees who have quit their jobs or have moved on from the manufacturing industry altogether, many workers are being re-hired at different companies.
“The Great Resignation” and “The Great Reshuffle” both point to a shortage of employees in the manufacturing industry that have caused companies to ask, “Why?” Recently, economists have highlighted a number of issues that are causing the talent shortage and how Manufacturers can proactively address these issues to attract and retain talent:
Disruption of Child Care and Eldercare
Unpredictable schedules and lack of consistent daycare availability associated with the pandemic has rendered it difficult for workers to return to their jobs. Preschool spots are few and far between, and elementary schools are running after-school care at limited capacity or have canceled after-school programs altogether. And because schools are also having a hard time hiring workers, it’s affecting the parents of students who need to work on the shop floor.
What manufacturers can do: Even for manufacturing, there are companies that offer flexibility in terms of shifts. Additionally, companies can add benefits for employees around childcare discounts, or offer onsite daycare solutions from national daycare companies.
The Specific Challenge to Workers in Manufacturing
Though the demand for blue-collar positions has been rising, the pool of applicants is declining. According to Conference Board data, some of the decline is due to stagnant population growth and overly restrictive immigration policies. But a large part is attributable to the shortage of men aged 16 to 24 entering manufacturing. These individuals haven’t disappeared; rather, they’re attending college in pursuit of white-collar careers. To some degree, the shortage of men seeking entry-level positions has been offset by rising numbers of women in blue-collar jobs. But closed schools and limited options for child care have wreaked havoc on the lives of many female manufacturing workers, causing additional challenges.
What manufacturers can do: Culture has been the number one reason I have experienced people making big career changes in the past (even before COVID-19). Candidates like to feel that they will be valued and have opportunities. One of the most effective ways for manufacturers to demonstrate a strong culture is by demonstrating their commitment to safety. Workers will want to join companies that can show great safety records as well as clearly communicate the incentives of career advancement, highlighting lifelong growth with pay increases, continuous training, and even tuition reimbursement.
Better Information Regarding Wages
Manufacturing workers have more access to survey the market for the best-paying, most attractive jobs. Job ads are more than just a source of information on the roles and requirements of a position, they are a marketing asset for employers. The top attracting factors job seekers look for in posted positions are:
- Salaries (67 percent)
- Benefits (63 percent)
- Location (59 percent)
- Commute time (43 percent)
- Employee reviews (32 percent)
What manufacturers can do: Since the pandemic, emphasis on greater workplace flexibility is also a major contributing factor of interest. Employers who are hesitant to include any of this information in their job ads may have a harder time attracting talent.
Companies should also consider offering Tours as part of a first interview. Candidates want to see and feel the culture. Most companies traditionally only have candidates meet with an HR manager before their first day on the job. They almost never meet co-workers or floor supervisors who can give them a sense of the day-to-day responsibilities.
People Leaving Manufacturing
The societal disruption caused by COVID-19 led many younger, more mobile people to move from the markets where they previously worked to areas with fewer manufacturing plants. Since this demographic was the source of many of the semi-skilled/skilled positions manufacturers need to fill, there is now a disconnect. Stated simply, people moved but the jobs didn’t.
What manufacturers can do: Show that the workplace is socially enjoyable. Despite its presentation, an entry-level job is a relatively low wage hourly position. People generally stay in these positions when they have a sense of community with their co-workers. Consider forming a “fun committee” on staff to organize stand-up meetings, softball and bowling leagues, quarterly barbecues, or other activities. Work is socially important as well as financially necessary to those without access to high pay and broad opportunities.
Shortage of Traditional Hiring Sources for Semi-Skilled/Unskilled Jobs
Skill shortages exist when employers are unable to fill or have considerable difficulty in filling vacancies for a position, or specialized skill needs within that occupation. The lack of education, particularly in computer literacy, has left many applicants ill-suited for even some entry-level positions. What was once considered a “simple job” in the manufacturing industry is no longer seen as such. This is a new trend caused by a mix of factors that has driven the U.S. labor shortage.
What manufacturers can do:
- Train existing employees
- Adaptability-apply workforce skills in different ways
- Re-evaluate recruiting practices
- Partner with local educational facilities for training
- Use contingent workers to fill in staffing gaps
The shortage of semi-skilled and unskilled staff is likely here for some time to come. Adjusting hiring practices will be necessary to keep companies and facilities staffed.
Manufacturers must differentiate themselves from other industries to stay on top of the shortage. This will require a shift in thinking for corporate dedication of traditional manufacturing hiring to a more modern career focus with the current labor market. Manufacturers have to sell themselves to attract new candidates at all levels. This is a huge shift that I have just started to see over the past few years.
To rapidly and sustainably accelerate your manufacturing business, nothing can rival the potential of people. People can help you grow and become a leader in your industry.
You’ll need an executive hiring strategy like no other, one that’s as proven and pioneering as your manufacturing process. Contact our Manufacturing team at Versique to find out how.