The U.S. manufacturing industry has emerged from the pandemic on a strong growth trajectory and continued growth is expected over the next 10 years, but that rapid expansion faces a skills gap and a tight labor market, according to a report from The Manufacturing Institute and Deloitte.
The sector is growing in response to three trends, as companies work to meet evolving customer demands, de-risk their supply chains, and leverage government incentives and policies, the two groups said in the report, “Taking charge: Manufacturers support growth with active workforce strategies.” The Manufacturing Institute is the nonprofit workforce development and education affiliate of the National Association of Manufacturers (NAM).
Powered by those forces, U.S. manufacturers could need as many as 3.8 million additional employees between 2024 and 2033. But as the need for higher-level skills grows, half of those open positions—1.9 million jobs—could remain unfilled if manufacturers are not able to address the skills and applicant gaps. The specific types of skilled workers in highest demand could include: statisticians, data scientists, logisticians, engineers, computer and information systems managers, software developers, and industrial maintenance technicians, NAM said.
Already, filling open positions — and keeping them filled — is a top concern for many manufacturers, as seen by the 65% of respondents in the National Association of Manufacturers’ 2024 Q1 outlook who pointed to attracting and retaining talent as their primary business challenge.
“Manufacturers recognize that the workforce is evolving. Pandemic-driven shifts have already created hundreds of thousands of new jobs, and now we are seeing increased demand for digital skills that need to be met or risk further widening of the talent gap,” Manufacturing Institute President and Executive Director Carolyn Lee said in a release. “Companies must prioritize technology, training and talent development, and the investments that are driving growth will also require the industry to build out a talent ecosystem. With investments in partnerships, apprenticeships, and education, and prioritizing a more diverse and inclusive workforce, a whole host of new talent will be on the factory floor and driving the next wave of growth.”
But employers are not sitting still. The report identified three ways that manufacturers are responding to the worker shortage:
- More than 9 in 10 surveyed manufacturers said they are forming at least one partnership to improve job attraction and retention, and on average, they are partnering with four or more. The top five partnership types among respondents are with: technical colleges (73%), industry associations (58%), universities (48%), state and regional economic development agencies (47%), and K-12 schools (44%).
- Many partnerships are geared towards building, leveraging and supporting training programs — helping address the needs to develop new talent. Nearly half (47%) of those surveyed in research by Deloitte and the MI indicated that apprenticeships, work studies, or internships at manufacturing companies would be the most effective way to increase interest in manufacturing as a career choice.
- Manufacturers are working to meet the needs and values of the evolving workforce to increase employee retention. As retiring Baby Boomers are replaced by incoming millennials and Gen Z workers, the industry should invest in strategies aligned with workforce expectations, including more flexibility. For example, nearly half (47%) of respondents in Deloitte and the MI’s study indicated that flexible work arrangements (including flexible shifts, shift swapping and split shifts) is most impactful for retaining employees. And employees are 2.7 times less likely to leave the organization in the next 12 months if they feel they can acquire necessary skills that are important for the future, according to Deloitte research.
