Manufacturers are in the midst of a talent crisis. Hundreds of thousands of highly-skilled workers are on the verge of retiring while thousands of new jobs are being created—and the ability to attract new talent is weakening as younger workers choose fields outside the manufacturing sector. It’s been called the perfect storm for the manufacturing workforce. How big is the manufacturing labor problem, and what are some smart, effective ways manufacturers can tackle their talent troubles?
The scope of the manufacturing labor shortage
The 2018 Deloitte and The Manufacturing Institute skills gap and future of work study found that the manufacturing skills shortage could put $454 billion of manufacturing GDP at risk in 2028 alone if qualified workers cannot be found to fill the open jobs. This is the equivalent of about 17% of the total US forecasted manufacturing GDP. Big numbers. Big problem.
Effective employee training and development can help mitigate the effects of the labor shortage, yet manufacturers are often lacking in this area as well. A recent Industry Week survey found that nearly three-quarters of the companies responding still rely on traditional shadowing or on-the-floor training methodologies, and in this age of tablets and smart phones, 62% continue to utilize paper handouts in their training.
In order to win the talent battle, manufacturers must take a strategic approach to attracting and retaining a skilled workforce. Below we offer up five ways manufacturers can leverage employee development and training to do just that.
Launch a formal training program
As the global skills shortage continues, manufacturers are recognizing the importance of growing their own talent through training and development programs—retraining is the new recruiting. The approach makes smart business sense as it can be six times less expensive to build technical skills internally than it is to hire them from the job market.
Failure to invest in employee training is risky for manufacturers. A recent IBM study examined the percentage of capabilities that companies lose over time. The study found that a company loses 10 to 30% of its original capabilities every year. Within three years, each company loses 41% of its staff. By year six, only 24% remain. These are staggering results and should motivate every manufacturer to commit to a formal employee and development program.
As you design your training program, consider expansion plans, new product launches, equipment modernization, management transitions and myriad other factors that could have an effect on your organization and its workforce. Also consider how you will monitor and track the program once implemented. Read more about this topic in our Building Blocks of Effective Training Programs whitepaper.
Prioritize safety and compliance
Poor training exposes employees and companies to unplanned events resulting in lower productivity, injury, property loss, lost revenues, downtime and legal liability. Trained employees work smarter—and are happier. From sexual harassment awareness training, to ISO-approved coursework and OSHA-mandated safety training, through business ethics – it’s not just that proper training is the right thing to do, training protects your company from potentially devastating injuries, lawsuits and fines. As an added bonus, well-trained teams can lead to double-digit increases in productivity.
A training management solution helps ensure employees (and you the employer) are in compliance with job requirements and the law. The software can track certification expirations, courses due, and notifications and accreditation requirements, helping maintain strict compliance and protecting both you and your employees.
Centralize and standardize training
It’s not uncommon for manufacturers to have a decentralized approach to training, allowing each department and even individual managers to determine who receives training, when, the source of the content and how (if?) that training is tracked. However, without a centralized approach to training, employees may receive inconsistent training content or even find ways to skip the training completely.
A centralized training management system allows you to track student data, course completion rates, certification renewals—and test for understanding— providing the structure you need to ensure your organization is providing consistent, measurable training across the enterprise.
Always be recruiting
The manufacturing skills gap is real and shows no signs of reversing. And while an effective employee development and training program can help you elevate the skillset of your existing workforce, you must always be recruiting in order to replenish your human capital. Training serves as a highly-effective recruiting tool – you’re more likely to attract and keep good employees if you offer them development opportunities.
You’ll find many resources about how to recruit effectively here, as well as this Best Practices Guide.
Make training part of your culture
Culture shapes the behaviors of people in the organization. Establishing a culture of learning takes time, dedication, and focus—but the effort is worthwhile. Organizations with a career development program in place enjoy up to 250% higher productivity. And the benefits don’t stop there. Reduced turnover, higher employee engagement levels, increased innovation and improved risk management are some of the additional benefits companies realize when they implement a formal training and career development program.
You can demonstrate your organization’s commitment to training and development advocating for a culture of learning, involving multiple stakeholders and departments, and investing in the tools and resources needed to build and retain a skilled and engaged workforce.
Ensure that your manufacturing organization is properly equipped to face the challenges posed a tightening labor market embracing a learning and development program—one that meets the individual needs of your employees as well as your organization as a whole.
This graphic explains why an estimated 2.4 million positions unfilled through 2028 with a potential economic impact of $2.67T.