The costs of the skills gap and talent shortage are fairly intuitive — businesses that can’t get the employees they need face lower levels of efficiency, loss of innovation and creative talent, obstacles to growth, and the challenge of keeping production levels high enough to satisfy growing consumer demand.

The financial cost, however, may be surprising: estimates put it as high as 11% of annual earnings for the average manufacturer. A 2014 CareerBuilder study found that for every three months that an unfilled position remains open, a company loses an average of $14,000 (and as much as $25,000.) Considering that the average time to fill an open position for a skilled production worker is 70 days, the losses add up quickly.

It is a reality that manufacturers are already experiencing. The Manpower Group 2016/2017 Talent Shortage survey found that 46% of employers were having difficulty filling jobs, and, for the seventh year in a row, skilled trades were the hardest jobs to fill. Technicians (production, operations and maintenance technicians) also made the top ten list.

Manufacturers face high overtime costs when there is a talent shortage. The skilled staff who are available must work longer hours, commanding overtime wages. Currently, workers in manufacturing clock an average of 17% more hours than those in other private industries.

Companies must also offer higher salaries, or face steep turnover rates as staff leave to follow the money. Four out of five US manufacturers said they were willing to pay more than market rates to attract and keep skilled employees; creating ideal conditions for bidding wars and skyrocketing labor costs. In fact, this is already beginning: manufacturing workers in the US earned 20% more in 2016 than workers in other industries.

Download “The Skills Gap and Training For The Future of Manufacturing” to find out the implications of the skills gap in the manufacturing industry, and how simulation-based training can help.


Manufacturers who want to expand capacity, maintain or improve plant efficiency, and keep customers happy have two choices: (1) overcome the obstacles to hiring to meet staffing requirements, or (2) equip staff with the skills they need through training.

Difficulties of hiring

The obstacles to hiring ready-made skilled workers may not be easily overcome. The top three reasons why US employers say filling positions is difficult are (1) lack of available applicants (23%); (2) lack of hard skills (16%); and (3) lack of experience (18%).

The Manufacturing Institute survey found that even if manufacturers were able to hire production workers, they often did not last through the probation period. Forty-seven percent of respondents said this was the major difficulty, followed by 35% who said that the main problem was finding candidates to enter the screening process in the first place.

It may be easier, faster, and more cost-effective for companies to train employees themselves to give them the necessary competencies. In fact, 94% of manufacturing executives agree that the best way to develop a skilled production workforce is through internal employee development and training programs.

Benefits of training

The difficulty of hiring staff with the necessary skills has caused many employers to take matters into their own hands; 48% of US employers are already training existing employees to fill open positions.

Besides filling empty positions, training offers a number of other benefits. “Upskilling” endows employees with a sense of personal pride, boosts confidence, and improves morale because they have the opportunity for career and personal growth. Improved job satisfaction lowers turnover rates and helps retain experienced employees. And of course, happier employees mean happier customers.

Download “The Skills Gap and Training For The Future of Manufacturing” to find out the implications of the skills gap in the manufacturing industry, and how simulation-based training can help.





1. The Manufacturing Institute and Deloitte. (2015). The skills gap in U.S. manufacturing: 2015 and beyond.
2. Gerald Shankel. (2010). America’s most wanted: Skilled workers. Available from blog/2010/11/americas-most-wanted-skilled-workers
3. Lauren Weber. (2014). Apprenticeships help close the skills gap, so why are they in decline? Wall Street Journal, April 27, 2014. Available from
4. Accenture and The Manufacturing Institute. (2014). Out of Inventory: Skills shortage threatens growth for US manufacturing, Accenture 2014 Manufacturing Skills and Training Study. Available from media/70965D0C4A944329894C96E0316DF336.ashx
5. CareerBuilder Press Release. (2014). Companies Losing Money to the Skills Gap, According to CareerBuilder Study. Available from aspx?sd=3%2F6%2F2014&id=pr807&ed=12%2F31%2F2014
6. Manpower Group. (2017). 2016/2017 Talent Shortage Survey: The United States Results. Available from https://www.
7. National Association of Manufacturers (NAM). (2013). Facts about manufacturing in the United States. Available from
8. V. K. Maheshwari. (2016). Simulation Teaching Skill. Available from

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