Are you seeing a gap in skills? If you’re in the manufacturing industry, you’re not alone. Companies across the industry are quickly facing a workforce crunch, due to a number of factors.
First, the baby boomer generation is getting ready to retire. According to a recent Gallup study, the average retirement age in the U.S. workforce is 64 years old.
That means that in the manufacturing world, approximately 2.7 million jobs are getting ready to open up. That’s 22% of the existing workforce. Add that to a projected need for about 700,000 additional jobs due simply to natural business growth, and you’re looking at a need for 3.4 million new workers.
Those numbers alone could be an HR nightmare, but there’s more.
Your next hire may not have all the skills you need to replace.
All those numbers don’t even reflect the job positions currently sitting open, with industry numbers reflecting difficulty in hiring skilled labor to replace veteran workers. The next round of workers just doesn’t have the skills needed to match the quality of worker needing to be replaced. That discrepancy is what’s called a skills gap.
And manufacturing executives are starting to worry that this skills gap is responsible for up to 60% of the current open positions failing to find a successful hire.
Apply that percentage to the 3.4 million positions soon to open, and that leaves almost 2 million jobs left unfilled.
A skills gap is a talent crisis.
What’s causing this skills gap to widen? Research according to Deloitte points to five contributing factors:
- Baby boomer retirement is coinciding with an economic expansion, inflating the need for workers.
- Loss of embedded knowledge due to movement of experienced workers, meaning there are less opportunities for younger workers to be mentored because those who would do the mentoring are the ones retiring.
- A negative image of the manufacturing industry among younger generations
- Lack of STEM skills (science, technology, engineering and mathematics) among workers
- A gradual decline of technical education programs in public high schools
Image from: Deloitte, The Skills Gap In U.S. Manufacturing: 2015 And Beyond. Page 7.
The combination of these conflicting elements creates a lot of pressure to attract skilled laborers. 80% of manufacturing executives report that they are willing to pay more than the market rates in workforce areas that are reeling under the talent crisis, hoping to attract competent employees who will be able to handle advanced, constantly updating standards. They need people who can hold their own while simultaneously shore up the abilities of the current workforce.
That extra pay comes with a risk, though.
New employees in the manufacturing industry are only going to stay in one particular job for an average of 4.6 years, according to statistics from the U. S. Bureau of Labor. So even when you find the right person, it might not be long before you’re back at the search.
That’s why companies are focusing on internal employee training and competency based development.
Don’t let that turnover rate scare you. There’s a solution that already exists.
In an environment in which companies can’t depend on keeping talented individuals long term, the focus must shift towards the skills of the group. Use those advanced workers to spread their knowledge to others, but don’t just wait to find the skills you need. Start making them out of the workforce you already have. Even if the workers you are investing knowledge in now move on, you’ve set the stage for the group to constantly keep developing upward.
This isn’t just good advice, it’s the perspective found across the industry. An overwhelming 94% of manufacturing executives agree that “internal training and development programs are among the most effective skilled production workforce development strategies.”
And not just one of the most. Internal training is the method of choice amongst manufacturing executives, with 81% describing it as extremely important versus 47% reporting involvement with local schools and community colleges and only 32% reporting external training and certification programs.
Image from: Deloitte, The Skills Gap In U.S. Manufacturing: 2015 And Beyond. Page 22.
Reportedly less effective are strategies such as using overtime, contingent labor, or even outsourcing certain functions. This is because internal training and development provides ways to specifically target a company’s needs. That kind of flexibility allows employers to develop exactly what skills they need in their workforce, without losing time or money to traditional schooling techniques.
Learning technology can help your company reinvent training and development strategies.
Who says internal training programs have to be hard?
Instead of building a program from scratch, only to find your company has developed beyond what you have, current technology lets you personalize the skills taught to exactly what each employee needs, using what’s called a Learning Management System. An LMS lets trainers set up tailored curriculums for employees to complete, walking them step by step through their training.
Not only that, but an LMS like the one provided by BizLibrary makes this process extremely simple by coupling the LMS to a massive database of short, individual skill focused videos. All a trainer has to do is select what videos an employee needs to watch, assign them, and they’re done.
A good strategy is to develop competency based targets for your workforce, and then set obtainable, measurable goals. This lets you target investments where they will have the most impact. Using an LMS means that employee progress is tracked in a meaningful way, showing what employees are watching, what courses they have completed, and how they scored on quizzes that follow a course.
And, it won’t interrupt workflow while employees sit through lengthy training seminars or click through slideshows. For skills training to be useful, it needs to be presented in context and immediately used. Because BizLibrary’s LMS and video content collection is internet based, it can be accessed from any device at any time, even out on the production floor, right when workers need access. And if you already have an LMS in place, all BizLibrary video content can integrate with any third party LMS.
It’s either an obstacle or an opportunity for growth.
The future of manufacturing is going to depend on how companies deal with the next generation of workers. Employers will need to depend on a combination of techniques to address current and future issues generated by the impact of this substantial skills gap. And according to what’s being said across the industry, learning and development is the most impactful place to start.