What’s behind manufacturing’s skills shortage?

Michelle Mimms Date published: May 17, 24

Around the world, manufacturers are struggling to recruit the skills they need to maintain production and quality levels. As a result, many are struggling to meet customer demands due to reduced productivity, leading to lost revenues and stifled business growth.

While the pandemic has certainly contributed to the shortage of labor in manufacturing, it’s far from being the primary cause. In fact, a whole host of longstanding issues with recruitment and retention have been leading to this widespread shortage for several years. Even back in 2018, estimates were predicting 8 million manufacturing jobs would be vacant worldwide by 2030.

Although current estimates are even higher, currently standing at around 10 million vacancies worldwide, it’s clear the storm has been brewing for some time. Global trends such as the pandemic, low unemployment, wage inflation and the digitalization of the industry, along with changes such as Brexit, have only exacerbated a problem that already existed. The result, ultimately, is the manufacturing talent shortage we are seeing today.

Get the guide

Looking for advice on how to tackle the skills shortage in manufacturing instead? Download our free guide with actionable advice on how to lessen its impact.

Download now

Here are 5 of the top trends that have led to the growing skills shortage across the manufacturing industry.

The skills needed are changing

As manufacturers embrace the technological advancements associated with Industry 4.0, the skills needed to operate optimally and with maximum productivity are changing. Experience in areas such as robotics, artificial intelligence, automation, cybersecurity and coding are now often in higher demand than manual skills.

However, with many of these technologies still being relatively new, these skills are not common among manufacturing workers. So, while the industry’s dependence on machines and software has increased, the demand for people with the skills to work with these technologies has not been met.

It’s therefore important when adopting new technology to consider its ease-of-use and what skills will be required to use it to its full potential. This challenge is not insurmountable, but at the very least it requires robust training programs for upskilling the existing workforce and for effective onboarding.

Workers are in short supply

It’s not just technical roles that are hard to fill. Even manual and leadership roles are remaining vacant for long periods of time, with manufacturers struggling to find people with the right skills, qualifications or experience to fill them.

As a result, hiring is taking far longer than previously, with 1 in 10 UK manufacturers taking longer than 12 months to fill vacancies – leaving workforces to struggle with insufficient resource while recruitment processes drag on.

Many manufacturers are aiming to bridge the gap by automating more repetitive tasks, enabling skilled workers to focus on the more complex activities. Investing in software, for example, to automate key processes is a way many manufacturers are tackling this facet of the manufacturing talent shortage.  

Manufacturing isn’t viewed as an attractive industry

In many parts of the world, manufacturing has generally suffered from a poor reputation among workers. Historically, it’s often seen as unskilled, hard work with long hours and poor working conditions. It’s also assumed to offer low pay and poor progression opportunities.

Additionally, manufacturing has a reputation for providing unstable work. Years of offshoring, supply chain disruption and economic turbulence have resulted in reduced hours and lost jobs across many sectors. As many organizations now look to reshore production, and economies recover, the industry has its work cut out to regain the trust of workers.

Many of these perceptions are largely inaccurate or outdated. But until the industry’s reputation is repaired, workers will continue to be deterred from considering a career in manufacturing. Investing in ways to boost job satisfaction is one way to attract new workers.

The workforce is ageing

With manufacturers struggling to attract new workers, replacing employees leaving the industry to maintain headcounts is proving to be a challenge.

A particular problem is that in many countries, there are more workers entering retirement than there are joining the workforce. Many manufacturing employees have been in the industry for decades, meaning a larger than average proportion of workers will be leaving the workforce – taking a wealth of knowledge and experience with them. In fact, in 2018, projections estimated that 20% of UK manufacturing workers would retire by 2026.

This issue is compounded by the difficulty of attracting young people to the industry. Apprenticeships play a valuable role in bringing school leavers into manufacturing and helping them develop the necessary skills. But with many societies increasingly promoting university education, and few parents likely to actively encourage a career in manufacturing due to negative perceptions, apprenticeships alone are not enough to replace the number of manual workers entering retirement.

Workers are leaving for better conditions and pay

Retirement isn’t the only reason workers are leaving manufacturing. The industry is generally struggling to retain its employees, particularly as the skills shortage continues.

Reduced workforces are often causing existing workers to face longer hours, as well as increased pressure to maintain the levels of productivity needed to meet customer demand. In such circumstances, training, processes and standards can all fall by the wayside, leading to reduced job satisfaction. These working conditions can also lead to increased burnout and declining mental health among workers, driving many away from the industry in pursuit of a better working environment and work-life balance.

Remuneration is also a key factor behind manufacturing’s retention issues, while also being a barrier to recruitment. Many roles receive low pay and poor benefits – in the US, 53% of frontline production workers in manufacturing earn less than $15 an hour. As a result, workers are easily lured away from the industry in favor of higher salaries, particularly amidst the ongoing cost of living crisis.

How can we solve the skills shortage?

The global skills shortage isn’t the result of any single issue, but rather the cumulation of a number of ongoing trends that make it difficult to recruit and retain the right skills.

As a result, resolving the skills shortage is unlikely to be straightforward. It requires a multifaceted and coordinated approach from across the industry to fill its vast range of vacancies.

But the solution doesn’t only lie in increasing headcounts. By leveraging technology and the latest innovations, manufacturers can alleviate many of the challenges presented by the skills shortage – using automation and digital tools to optimize a range of tasks and processes. So, workers can focus their time on more complex tasks, helping to maximize productivity despite operating with a reduced workforce.

Get the guide

Want actionable advice on how you can close the skills gap in your organization? Download our free whitepaper now for valuable insights.

Download now