Help Wanted: Rebuilding the U.S. Manufacturing Skills Pipeline

June 30, 2014
Though U.S. manufacturing is on a steady path of growth, the threat from the skilled worker shorter could derail that. Here are some effective strategies to address the skill shortage.

These are largely good times for the U.S. manufacturing industry, which has shown steady growth in recent years. Automakers, for example, continue to experience strong growth, while increasing demand for customized products and services is presenting new opportunities for industrial equipment and industrial product producers.

Reflecting this positive momentum, more than half of the 300 U.S. manufacturing executives we surveyed recently plan to increase U.S.-based production by at least 5 percent in the next five years. Nearly a quarter of them plan to grow U.S.-based manufacturing by more than 10 percent. However, findings from the Accenture 2014 Manufacturing Skills and Training Study, done in collaboration with The Manufacturing Institute, also indicate that shortages in the skilled talent required to perform essential tasks could derail the trend of steady growth.

According to the research, more than 75 percent of manufacturers reported a moderate to severe shortage of skilled resources, and more than 80 percent cited a moderate to severe shortage in highly skilled manufacturing talent. Adding to the challenge is the fact that a large segment of the skilled manufacturing workforce is approaching retirement age. These shortages have considerable business implications. Increased production costs and revenue losses that result from skills shortages in U.S. manufacturing are costing manufacturers up to 11 percent of their annual earnings—further underscoring its importance as an issue that companies cannot afford to ignore.

Fixing the problem

At the heart of this challenge is the need to build and retain a skilled workforce capable of using advanced technology to configure, control and monitor processes that are essential to manufacturing competitiveness. Although these skills are high in demand, the number of qualified people who have them is small. Manufacturers will need to consider investing in training to develop a highly skilled production workforce that supports these advanced technologies.

Based on Accenture’s ongoing research and the study, there are some effective strategies leading companies are employing to address critical skill shortages, including using skills development as a way to gain a competitive advantage. The research suggests manufacturers should:

  • Maintain a current inventory of in-house skillsets and regularly compare it against current and anticipated skill needs to establish a viable talent strategy, as well as make better training investment decisions.
  • Adopt and apply statistical analysis and reporting that correlate training programs with key business and operational metrics. This has allowed many businesses to focus resources and invest in the programs that will have the most positive impact on their business.
  • Use digital technologies to make skills training available to employees on a self-paced basis, anytime and anywhere. Digital learning also can be a more economical approach compared with classroom learning.
  • Incorporate nationally recognized, certified training programs to build standardized skillsets. Using this strategy helps employers gain confidence in their employees’ ability to perform at a given skill level, and helps employees gain confidence in their own abilities as they acquire new skills certifications. This can enhance employee morale, productivity and retention.
  • Work with educators at colleges, community colleges, trade schools and high schools to build a pipeline of future skilled workers and influence curricula. Also, lend employees to help teach specialized skills to potential manufacturing recruits in the future.

Sustaining growth

The U.S. manufacturing industry has withstood many challenges, including the adverse effects of the economic slowdown in past years. Today, leading companies are taking the pragmatic steps identified in our study to overcome this latest challenge of a skills shortage. It is an approach that manufacturers should consider as a way to help them sustain growth now and in the future.

>>James Robbins, [email protected], is Accenture’s automotive industry and industrial equipment industry North American managing director.
>>Russell Rasmus, [email protected], is managing director of the Accenture Strategy Manufacturing practice.

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