Manufacturing, just like many other industries, has been impacted by the COVID-19 pandemic. There has been many consequences with the pandemic, one of which is a record increase in unemployment in countries affiliated to the Organization for Economic Co-operation and Development.Despite the rise in the number of people unemployed, skills shortages will remain a challenge for manufacturing firms, because of what is available in the labour market. Businesses are struggling with a ‘blue-collar drought‘, with roles becoming increasingly specialised and demanding, a decreasing amount of people are choosing to pursue education and also training in sectors such as manufacturing, therefore increasing the skill gap. Multiple trends are the reason for the increase in the scale of this skills gap. This includes an aging and retiring workforce, the impact of Artificial Intelligence and a tight labour market.
Below are some of the biggest recruitment challenges manufacturing businesses are facing at this very moment, and some tips on how you and your team can overcome them.
challenges in recruiting a skilled workforce in manufacturing
For many people, their view of manufacturing is unappealing. Perhaps even more worrying are the views from Seema Pajula, vice chairman and US Industries and Insights Leader for Deloitte, who stated prospective younger employees view manufacturing as “boring, outdated and not creative”. In a Deloitte survey, 45% of respondents cited “negative perceptions towards the manufacturing industry” as a cause for projected job vacancies. This is a worrying statistic for HR managers in the sector.
If you are a female, working in the manufacturing industry could be even less appealing, as it is still a very male-dominated industry. A global study by the World Economic Forum showed that women make up only 20% of the manufacturing and production workforce.
The potential economic impact of this is enormous, with unfilled positions expected to create productivity losses of up to $2.5 trillion by 2028, according to Deloitte. Companies must collaborate with industry bodies to become more attractive to women and young people.
So you may ask, how can the sector appeal to young people, who represent the future of the industry? To the younger generation, inclusivity, and environmental and social conscience are far more important than they were to previous generations. The way you present your values, company and people must appeal to this younger generation.
Apprenticeships in which young people gain skills and experience through on-the-job training and undertake local trade-based education are one method of offering young people a route into a career in manufacturing, But to recruit the most talented young people, the perception of the industry has to change.
The impact of political changes
The COVID-19 pandemic is one of the biggest obstacles the manufacturing sector has had to overcome in recent memory. The pandemic has forced companies to find new ways to work so they can meet demand and stay in business, while facing unprecedented HR challenges and trying to keep their staff safe. Workforce gaps created by layoffs and sickness absence have necessitated a new approach to recruitment, with the expanding contingent workforce proving to be a valuable source of talent for many firms.
Political changes such as Brexit are also continuing to have a significant effect on the manufacturing industry. In the UK, government data shows a growing number of EU nationals began leaving after the Brexit vote. Tighter border controls and travel restrictions created by developments like Brexit and COVID-19 could also limit opportunities to recruit from overseas.
For any HR manager, a reduced number of skilled workers can pose a challenge. When developing your recruitment strategy, it’s important to consider how you could be more innovative, particularly for special talent.
The impact of artificial intelligence
In the past, there has always been a fear that an increase in technology will mean less jobs. The reality is that new technology often create different opportunities. A study by Deloitte in 2015 showed that over the preceding 144 years, technology had created more jobs than it had destroyed.
Another Deloitte analysis highlighted that when used correctly, automation can achieve a positive impact on productivity, employee engagement and customer value. The study found Amazon as a perfect example of how a company can use automation to increase warehousing and quickly ship goods during the peak periods, while decreasing the amount of time needed to train employees.
The use of automation and robotization should be the main factor when bringing the image of the manufacturing sector up to date. In the future, you can expect to see the types of roles you recruit for change and require different skills as technology advances.
Upskilling your workforce is essential to overcome the skills gap. Industry Week reported that 29% of manufacturing workers believe their skill set is now redundant or will be in the next couple of years, while 38% believe this will be the case in the next 4 to 5 years.
Despite this, most manufacturers are not upskilling or investing in education to assist with employee retention. In fact, a recent survey from Tooling U-SME, ‘The True Cost of Turnover’ showed that only 36% of manufacturing companies budget for employee development, yet two in five companies have an annual staff turnover of at least 20%. So what can you do to combat these challenges?
Optimizing your flexible workforce is essential. By developing a strategy to take full advantage of flexible and contingent talent, you will be taking control of the factors you can influence and putting your company in the best position for the future. With so many manufacturing workers believing their skills will be redundant in the next five years, it’s critical to overcome the skills gap.
Retiring and Aging workforce
In the U.S. nearly a quarter of the manufacturing industries workforce is over the age of 55, while in the UK, manufacturing is one of four industries (along with health, retail and education) that account for nearly half of all 50+ workers in the economy. One of the reasons the sector is facing a shortage of workers is the high number of people who have recently retired or are approaching retirement age. Older workers should be viewed positively, with the Wall Street Journal reporting that in the eurozone, workers aged 55-74 accounted for 85% of employment growth between 2012 and 2018, according to the Organisation for Economic Cooperation and Development.
You should make the most of an aging workforce and limit the loss of expertise and knowledge when experienced workers retire.