CSCMP's Supply Chain Quarterly
Manufacturing
December 19, 2018
Forward Thinking

Talent shortage to hit manufacturing hard

Comment
As many as 2.4 million manufacturing jobs will go unfilled over the next 10 years due to widening skills gap, study shows.

The thriving manufacturing sector could be stalled by an increasingly challenging labor outlook over the next 10 years, according to a study released this month by Deloitte LLP and The Manufacturing Institute, a division of the National Association of Manufacturers.

The study found that the shortage of skilled workers plaguing U.S. manufacturers today is only going to get worse in the years ahead. According to the groups' 2018 Skills Gap Study, the widening manufacturing skills gap is expected to grow from about 488,000 vacant jobs today to as many as 2.4 million manufacturing jobs left unfilled between now and 2028. The situation could cost the industry $454 billion in economic output in 2028, or 17 percent of U.S. manufacturing's gross domestic product (GDP) contribution, the study authors said.

"With nearly 2 million vacant new jobs expected by 2028, compounded by 2.69 million vacancies from retiring workers, the number of open positions could be greater than ever and might pose not only a major challenge for manufacturers but may threaten the vitality of the industry and our economy," Paul Wellener, vice chairman, Deloitte LLP, and U.S. industrial products and construction leader, said in a statement announcing the study's findings.

Five out of 10 open positions for skilled workers in U.S. manufacturing remain unoccupied today due to the skills gap crisis, the survey authors said. In addition, nearly two-thirds of manufacturers listed the issue as their top concern and said they expect it to get up to three times worse over the next three years. Nearly half of the survey respondents (45 percent) said that a negative perception of the manufacturing industry is the main reason positions tend to go unfilled, according to the study.

The study also found that manufacturers are developing new strategies to try and shrink the skills gap:

83 percent of companies said they are increasing wages and eight percent said they have offered signing bonuses;

More than three-quarters (77 percent) said they are willing to compromise on the level of experience required and 65 percent said they may make concessions on the required skill set;

39 percent of respondents said they are adopting learning and development programs;

One-in-four (26 percent) manufacturers said they are turning to automated technologies to supplement open positions, and 59 percent said they are likely to rely on adding more automation to eliminate unfilled production jobs over the next three years.

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