Manufacturing Skills Gap Widens in the Wake of COVID-19

A new study by Deloitte and the Manufacturing Institute says the pandemic erased 1.4 million U.S. manufacturing jobs. And, even as the industry rebounds, the remaining unfilled jobs could cost the U.S. economy $1 trillion.

Over the past six years, the manufacturing industry successfully added about 600,000 jobs,  making some headway toward solving its biggest challenge of attracting and retaining a quality workforce.

But it’s one step forward and two steps back for the industry. That’s because it lost its momentum last year when the pandemic wiped away 1.4 million U.S. manufacturing jobs. While we recouped the majority of those jobs by the end of 2020, about 570,000 jobs remain unfilled according to information released in the 2021 Manufacturing Talent study from Deloitte and the Manufacturing Institute (MI). This is the duo’s fifth manufacturing talent study which was fielded between December 2020 and February 2021 and surveyed more than 800 U.S. manufacturing executives across all sectors.

And, despite the fact that the unemployment rate remains high, the majority of survey respondents said that finding the right talent is now 36% harder than it was in 2018, with 77% of surveyed manufacturers saying they will have ongoing difficulties in attracting and retaining workers in 2021 and beyond.

The Manufacturing Talent study found mid-level skillsets are needed the most.The Manufacturing Talent study found mid-level skillsets are needed the most.Deloitte

 And, while there’s always need for engineers, really, these companies are just trying to fill entry-level positions. All it requires is a good work ethic and the ability to follow directions. There’s also a need for mid-level skilled jobs, such as welders or CNC machinists, which may require a certification, but not a college education. So, with so many people displaced from other industries like the hospitality and restaurant businesses, the question is: “Where are the people?”


   Read this article on how to build the future workforce as the skills gap widens.


 If we stay on this track, the U.S. manufacturing skills gap could leave as many as 2.1 million jobs unfilled by 2030, according to the study, which is concerning because manufacturing has the highest multiplier effect of any economic sector: “For every $1.00 spent in manufacturing, another $2.74 is added to the economy. Using this multiplier, leaving the open jobs unfilled in manufacturing could bring a potential negative impact to the U.S. economy of more than $1 trillion by 2030 alone.”

They are a few reasons why we are not seeing people lining up to work on the factory floor. First, there’s the old stigma that it’s a dark, dirty, and dangerous place. The study found that the ongoing challenges in attracting entry-level and skilled workers in the right geographic markets are often the result of misconceptions about manufacturing work, especially amongst the younger generations who wonder if it can deliver rewarding career experiences with work-life balance.

“The biggest challenge is perception,” said Carolyn Lee, executive director of the Manufacturing Institute in an interview. “People don’t know these are jobs that they want to look for…It has to be a different narrative today for parents, students, and dislocated workers who say there’s nothing for me there. It’s not true, there’s a lot.”

Creators Wanted Campaign

In an effort to change the perception, the National Association of Manufacturers (NAM) and MI are taking its message on tour, kicking off the Creators Wanted mobile experience which features a 53-foot tractor trailer that will be traveling throughout the country starting in Washington D.C. this fall. The truck has five rooms set up in a gamified escape room experience where teams of four are provided information on modern manufacturing and have to solve challenges to get to the next room, which ends with a picture of the future of manufacturing based on an individual’s interests, showing educational paths or perhaps even local apprenticeship programs. 

“Creators Wanted is perfectly timed to meet the needs of today and talk about what the future of work looks like to eliminate the perceived barriers of entry,” Lee said.

In addition, the Manufacturing Talent study underlines the importance of thinking differently about the kinds of skills required because the other challenge relates to the ongoing digital transformation, which means the skills needed to run a smart factory in the future will be very different than the jobs of today.

Deloitte developed a series of personas to describe the new kinds of roles that will be required in the future. Titles include: digital twin engineer, predictive supply network analyst, robot teaming coordinator, drone data coordinator, smart safety supervisor, etc. The good news is, the roles are not mundane. A robot teaming coordinator, for example, will be responsible for training humans and robots to work together collaboratively for optimal human-machine interactions. An interesting job! However, to be successful, the manufacturing community will need to change its approach to recruiting—highlighting the new career opportunities and expanding its recruiting efforts.

 7048 Figure9Deloitte

Diversity, Equity, and Inclusion

Specifically, the report notes the growing need for diversity, equity, and inclusion (DEI). “In manufacturing, DEI is often focused on women because the industry has historically been male-dominated. Fewer than one in three manufacturing professionals are women today, despite representing nearly half of the overall workforce in the United States,” the report said. In addition, a separate DEI study by Deloitte and the Manufacturing Institute notes that women are more likely to leave the industry than men, in part due to the circumstances of the pandemic, but it could also be about the way work is organized in manufacturing—noting that the lack of work-life balance and flexible work arrangements have been a top reason that many women give for leaving the industry.


   

Lear Corp.'s VP of talent acquisition and General Mills engineers address diversity and inclusion.


It’s important to have a diverse workforce for a number of reasons. Of course, offering an environment of equity where all people have fair access, opportunity, resources, and power to thrive is the right thing to do. But having DEI in a company has been proven to drive business performance and innovation. According to the study, “An analysis of Fortune 500 manufacturing companies reveals that companies fostering diversity and building inclusive environments are more likely to have stronger financial performance.” In addition, 63% of manufacturers surveyed link the business benefits of DEI to the ability to attract, retain, and develop talent.

7048 Figure11Deloitte

That means manufacturers need to put more role models out there that people will identify with, and write different job descriptions that expand beyond one skillset. “Instead focus on a person’s capabilities,” Lee said. “Diversity and inclusion is not only the right thing to do, but an essential thing to do because we can’t mathematically get there to close the skills gap if [the industry] only attracts white males. The labor force is evolving and we need to make sure all potential workers see the opportunity in manufacturing.”

For more information and recommendations for closing the manufacturing skills gaps, you can find the study here.        

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