The future of manufacturing – still all about the people

Many large manufacturers are already pushing forward with an industry 4.0 strategy and others are certainly thinking about making use of technology around data and automation to increase profitability in their own business strategies. But what does this mean for the people, and what does this mean for leaders hiring manufacturing workers?

Jobs that require an assembly line of employees focusing on a single skill are going away. With the growth of computer-controlled manufacturing systems and robotics, there is a demand for different types of manufacturing employee – people with skills and knowledge in areas like data analytics and programming.

For a long time, we have been moving away from a time where physical prowess and a motivation to work was all you needed for a job in manufacturing. Technology, information and more recently automation are playing a big part in the shift towards needing a more specialized and adaptable worker.

This is not new. Manufacturers have spoken about a gap between the people they need to keep profits up and the talent they can find. And this problem is getting deeper – according to Deloitte in the US, three and a half million manufacturing jobs will likely need to be filled between 2015 and 2025, with 2 million of these likely to be unfilled.

This is also going to be exacerbated by the retirement of baby boomers – skilled production workers born between 1946 and 1964, according to manufacturing executives. 2.7 million of these jobs will be due to retirements of the existing workforce, with 700,000 due to natural business growth.

There are also other issues – loss of this experience, as well as a negative view of manufacturing by young people and a lack of quality STEM (science, technology, engineering and mathematical) talent.

Manufacturers believe that the skills gap could affect their profitability

For manufacturing leaders and executives, talent plays a big part in driving the innovation needed to make their businesses more competitive. If people with the right skills are lacking, then this will have an impact on growth and profitability.

According to Deloitte in the report ‘The skills gap in US manufacturing – US and beyond’, 82% of executives believe the skills gap will impact their ability to meet customer demand, while 78% think it will impact their ability it will impact their ability to implement new technology and increase productivity. Manufacturing executives also believe the skills gap will impact the ability to provide customer service (69%) and their ability to grow and expand internationally (48%). Seven out of 10 manufacturing executives also reported shortages of workers with the right technology, computer, and technical training skills.

Hiring manufacturing workers can be very difficult

According to Deloitte’s research, six out of 10 manufacturing positions remained unfilled. Although businesses are willing to pay more than the market rates – there just isn’t enough numbers. And the time needed for hiring is also long – it takes an average of 94 days to recruit an employee in the fields of engineering, research and science, and 70 days to recruit a skilled production worker. With rates of manufacturing growth growing, this hiring problem hits a manufacturer’s ability to meet customer demand.

How can manufacturers raise the skill level of their existing staff?

According to Deloitte, around 94% of manufacturing executives agreed that internal training and development was the most effective way of dealing with the skills problem. Here are some of the ways US manufacturers are looking to upskill from within:

1. Train employees from within

Jobs for life are very rare these days, so manufacturers shouldn’t depend on keeping talented workers long term. They should instead think about improving the skills of the group, focusing on internal employee training and competency. They should make sure these senior figures share their knowledge – even if they move on in the future, the skills they developed can be kept in the business. It’s also important to supply employees the means for internal training and development, specifically crafted to meet a company’s needs.

2. Identify STEM students at academic institutions

The long-term future of US manufacturing and other industries is dependent on STEM education, as STEM jobs are needed to keep pace with global competitors. Manufacturers today can do their part by joining forces with universities and other types of academic institution in providing graduates a pathway into a lucrative manufacturing career. Students need to know about the cutting-edge technologies and careers available in UK manufacturing. There’s also the possibility of launching manufacturing apprentice programs.

3. Provide training outside the company

In-house training can be problematic – it can take people away from their day-to-day tasks, and only works if you have adequate teachers. Also, manufacturers might understandably feel that they need fresh perspectives and a culture which is stifling innovation. A big benefit with external training is the ability of company leaders to choose whoever they want to manage it – they can bring people in with different experiences of different industries, which may be just what a company needs!

4. Hire employees from outside of the manufacturing sector

Bringing in engineers and experts from outside of manufacturing can bring in new ideas and insight on how to solve problems, as well as knowledge on innovation and technologies, such as the Internet of Things (IoT).  Manufacturers might be able to add new ideas to testing and quality, accelerating processes that long-established companies might have felt were set in stone. Innovation is about challenging pre-conceived ideas about what should or must be done, bringing in new and revolutionary ways of thinking.

5. Hire from other manufacturing companies

To bring in talent from competing businesses, manufacturers must build a solid employment brand which can convince world-class talent that the culture and values they hold are what they should be looking for. It might also mean putting a focus on the right recruitment strategies – whether that’s through the use of recruiters, a good use of social media channels, or the right level of pay and benefits that are suitable for the skills that are needed.

Does manufacturing have a perception problem?

The shortage of skilled candidates for modern manufacturing jobs indicates that there is a problem in convincing Americans that they should be pursuing careers in manufacturing. Does this indicate that the industry has a problem convincing people of its attractiveness?

According to another study by Deloitte, the vast majority of Americans (eight out of 10) believe that US manufacturing is vital to maintaining prosperity. Concerningly for manufacturers though, less than five in 10 Americans believe that manufacturing jobs are interesting, rewarding, clean, safe, stable and secure. Less than three in 10 Americans would encourage their children to pursue a manufacturing career.

On the other hand, Americans believe that the manufacturing jobs in the future will require high-tech skills (88%), be clean and safe (81%), and more innovative (77%). Manufacturing leaders need to take notice – there seems to be a lingering view of manufacturing as a sweatshop of the past, but a belief that future manufacturing is different and important to the global economy.

What can leaders do to improve the perception of manufacturing?

Manufacturers need to understand that they are competing for skilled talent with multinational companies from other industries, as well as the Silicon Valley giants. They need to change the images of their companies, representing the Industry 4.0 expert modern manufacturer, a pathway to a career with the future factory where robotics and data analytics play a big role. Through recruiting a new generation of skilled talent, they can create a virtuous circle, encouraging more talent to believe modern manufacturing is their future.

Recommended actions for manufacturing leaders include:

Invest in skill development

Putting money in skill development such as internships and apprenticeships could convince more students that with manufacturing is a clear pathway to a successful, well-paid career. The industry has good benefits, pay and can be very satisfying – but manufacturers have a role to play in making sure people understand that this is the case and making their company more attractive than the in-vogue tech firm.

Raise awareness about manufacturing careers

As Deloitte’s research indicates, there is still a significant perception problem about the current state of manufacturing. There is a need to dispel false impressions. If manufacturers opened their doors and showed off what modern working life and conditions were like, young people will be better able to understand that it isn’t just about unskilled assembly lines and unsafe conditions anymore.

Tap into pro-manufacturing groups

An older demographic has a better view of manufacturing than young people – manufacturers need to tap into this group and use them for recruitment and ambassadors of the brand. They also need to take advantage of the positive role that Americans feel manufacturing has for the future of the global economy.

Increase awareness about high-tech technology and cutting-edge innovation

Modern manufacturers are winning with industry 4.0 and technology like data analytics and the Internet of Things, but does the wider world know this? It’s time to emulate the Silicon Valley giants and make sure that their industry is just as technologically innovative. Young people today are technologically innovative – we need to make sure that they see this in manufacturing.