After decades of stagnancy, manufacturing jobs are back on the rise and expected to grow into the millions over the next decade
The manufacturing industry is vital to the US economy. Every dollar spent in manufacturing adds $1.37 to the US economy. Every 100 manufacturing jobs add over 250 jobs in other sectors. The good news is, after a bleak few decades, manufacturing jobs themselves are on the rise. In 2013, the International Monetary Fund predicted a 3-4% growth in US manufacturing over the following two years.
And yet, the manufacturing sector will face some real problems over the next several years. A study done by The Manufacturing Institute, “The Skills Gap in US Manufacturing: 2015 and Beyond,” calls the main problem the “skills gap.” The “gap” is the huge breach between the talent needed by manufacturers and the qualified applicants available. The authors found that 84% of manufacturing executives agree there is a serious talent shortage. Over the next decade, 3.4 million manufacturing jobs will open up. Experts predict that 60% of these jobs will go unfilled. That’s far too many for manufacturers to continue operating successfully, making the skills gap a real threat to businesses.
Losing the Workforce
So why this discrepancy between demand for labor and qualified applicants? Where has the manufacturing workforce gone? Here are a few thoughts from The Manufacturing Institute’s research and analysis:
Manufacturing companies often struggle to recruit young talent. This is because almost 70% of teenagers are uninterested in manufacturing jobs. They view the industry as “requiring little thinking.” The prevailing opinion among the young is that manufacturing careers provide “minimal opportunity for personal growth or career advancement.” In addition, public opinion tends to perceive manufacturing as “dirty and dangerous.” These perceptions are unfair, and respondents who are more familiar with industry do see manufacturing as a positive career choice. However, these perceptions still affect the majority of the talent pool. Because of the sector’s negative reputation, it has fewer and fewer recruits, increasing the skills gap.
Serious Skill Deficiencies
It’s true that manufacturing companies have trouble filling vacant positions. However, they also have problems with their existing workforce. Workers are often unqualified or untrained to fulfill their current roles. Seven out of 10 executives report shortages of workers with skills adequate to carry out their current positions. Technical and computer skills are the most serious (70% of workers feel their training is not “sufficient”). Next is a lack of problem-solving skills (69%). Basic technical training (67%) and math skills (60%) were also high on the list for skill deficiencies. Thus, the skills gap of the manufacturing workforce not only applies to open positions. Current workers are also part of the problem.
Decline of Technical Education Programs
A 2013 study found that for young people interested in STEM (science, technology, engineering, and math), careers have been on the rise for the past decade. About 25% of respondents expressed interest in STEM careers when beginning high school. However, this number fell by 60% by the time the respondents graduated. Why the loss of interest? Over the past decade, schools have stopped investing in STEM career initiatives. In high schools and community colleges, apprenticeship programs with hands-on experience fell by 40%. Conversely, STEM occupations are expected to increase by 17% by 2018 (faster than overall employment). Because schools have stopped encouraging STEM careers, students have stopped seeing the industry as a viable option.
Bridging the Gap
These problems in the manufacturing workforce cannot be allowed to continue. Fully 82% of manufacturing executives believe the skills shortage will prevent them from meeting consumer demand. Experts estimate the average US manufacturer is losing 11% of annual earnings due to the talent shortage. Another study estimates companies will lose $14,000 per unfilled position.
Clearly, in order for the manufacturing sector to thrive, the skills gap must be closed. Manufacturers need new strategies to attract skilled workers and young talent: otherwise, its workforce will continue to dwindle. Some companies have tried starting STEM initiatives earlier, collaborating with local high schools and community colleges. Others have used internship programs and temp jobs to attract new talent.
The government is also stepping in to help. Over $1 billion in grants have gone to community colleges to support manufacturing education programs in the last few years. Another $100 million was earmarked to establish apprenticeship programs. Through these initiatives, the government hopes to encourage young talent to pursue a career in manufacturing.
All of these new programs share the goal of closing the skills gap, as quickly as possible. Although these initiatives are underway, and in some cases have had success, the problem is far from solved. There are still too many unfilled manufacturing jobs for industry to operate successfully. And that’s a gap that stakeholders—not just manufacturers but schools and community colleges, media, government and communities—need to bridge very soon. It’s in the best interest of us all.
For a more in-depth discussion of the causes of and potential solutions for the skills gap, please see The Manufacturing Institute study The Skills Gap in Manufacturing: 2015 and Beyond.