U.S. manufacturers may be losing up to 11% of their earnings annually due to increased production costs stemming from a shortage of skilled workers, according to a new study from Accenture and The Manufacturing Institutes, “Out of Inventory: Skills Shortage Threatens Growth for U.S. Manufacturing.”
Nearly 40% of manufacturers described the shortage of qualified, skilled applicants as “severe,” and 60% said it has been difficult to hire the skilled people they need. Yet more than half plan to increase their production by at least 5% in the next five years.
The report points to detriments when manufacturers can’t fill positions:
- Overtime, downtime and cycle times increase.
- More materials are lost to scrap.
- Quality suffers.
“Given today’s limited pool of relevant talent, companies may have to forget the notion of the perfect candidate. Instead they should look for more generalist skills in candidates and develop them to match the specific work that needs to be done,” said Matt Reilly, senior managing director of Accenture Strategy, North America.
More is expected of manufacturing professionals today than ever. “Production workers, engineers, and managers all spend a significant part of their day using advanced technology to configure, control, and monitor processes,” said Blake Moret, chairman of The Manufacturing Institute’s Board of Trustees. “While these skills are in high demand, the number of qualified people who have them is small. Manufacturers will need to invest in training to develop a highly skilled production workforce that supports the advanced technologies that are essential to modern manufacturing competitiveness today.”
To mitigate the skills shortage, manufacturers tend to spend more to train new hires than to develop existing employees. The report suggests that manufacturers:
- Maintain a current inventory of inhouse skill sets and regularly map that against current and anticipated skill needs to inform talent strategy as well as training investment decisions.
- Adopt and apply statistical analysis and reporting that correlate training programs with key business and operational metrics.
- Take advantage of digital technologies to make skills training available to employees on a self-paced basis, anytime, anywhere.
- Incorporate nationally recognized, certified training programs to build standardized skill sets.
- Engage with educators at colleges, community colleges, trade schools, and high schools to build a pipeline of future skilled workers, influence curricula, and lend employees to help teach specialized skills to potential manufacturing recruits of the future.
“Skill-building programs offered by professional organizations offer an avenue for manufacturers seeking to certify their people in specific skill sets,” said Jennifer McNelly, president of The Manufacturing Institute. “Nationally recognized certification programs provide an opportunity for manufacturing employees to grow their capabilities.”