Manufacturing Faces Critical Gaps

For nearly two decades, the Manufacturing Institute (MI), an organization with the mission to build and strengthen the manufacturing workforce of today and tomorrow, has partnered with Deloitte, a global professional services company, to analyze challenges the manufacturing industry faces in hiring and workforce retention. Carolyn Lee, president and executive director of the Manufacturing Institute, said the pair’s work has allowed the Institute to “foresee” the nature of the industry’s current and future hiring challenges. 

“In 2011, employers indicated that as many as 5 percent of roles were going unfilled,” she said. “It was an after-thought question that yielded a surprising result which led us down the path to forecasting the 10-year demand and the anticipated gap you see in our recent report.” 

That report, “Taking Charge: Manufacturers Support Growth with Active Workforce Strategies,” combines the results from an online 2024 survey of more than 200 U.S. manufacturers, interviews with senior manufacturing executives, as well as labor supply and demand data. The good news from the analysis is that the manufacturing industry is seeing substantial growth—and companies are working hard to meet evolving customer demands, support healthier supply chains, and leverage government incentives to fuel that growth.
 

Action needed

But because so much of that growth is based on innovation, increased reliance on new technologies is contributing to a “chronic shortage of quality, skilled applicants for technical roles,” Lee said. 

“Manufacturing is inherently dynamic and ever-changing, which means that manufacturing skills are constantly evolving as well as the technology, processes, and the end products,” she explained.  

The consequences of not addressing the issue now are dire, Lee noted. Labor and supply state suggest that, for every one worker in manufacturing, 4.8 workers are added to the overall economy. This means the lack of skilled workers has impact far beyond the manufacturing industry. 

“In a previous 2021 study, we found that the skills gap could result in 2.1 million jobs going unfilled by 2030—and that would cost $1 trillion to the economy in delayed or canceled investments, longer wait times to fill orders, or innovations and advancements that aren’t discovered or can’t be implemented,” Lee explained. 

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It did not come as a surprise then, she said, that the 2024 research study highlighted that the industry is facing significant challenges when it comes to hiring and keeping strong talent. In fact, one of the report’s key findings was that U.S. manufacturing could see a gap of as many as 3.8 million jobs between 2024 and 2033. Without investment into upskilling current workers and training new ones in new technologies and processes, 1.9 million of these jobs could ultimately go unfilled in the future.  

Lee said that manufacturers are in a position to address these issues but only if they focus on key strategies that will support the future workforce. That includes making sure that employees have the skills they need to succeed. 

“We believe successful workforce development in manufacturing needs to be employer-led,” she said. “Technology plays an increasingly large role in redefining the shop floor and the skills that manufacturers are prioritizing.” 
 

Culture matters

Per the report’s findings, leading U.S. manufacturers appear to be taking action to address these issues. Sixty-five percent of the survey respondents noted that attracting and retaining talent is their primary business challenge. More importantly, more than nine in 10 manufacturers said they are currently forming partnerships to help develop new talent—with many forming relationships with outside organizations including technical colleges, industry associations, universities, state and regional economic development agencies, and even K-12 schools. Lee stated that partnerships with learning institutions are key, especially as many students may not be aware of the kinds of jobs available in manufacturing. 

“We know once they see with their own eyes how technologically advanced manufacturing is and all the different paths there are to take that it drives a dramatic shift that can lead to them pursuing new pathways,” she said. “That’s why we need to inspire [students] and show them what a career in manufacturing can offer a first-hand look at what modern manufacturing jobs look like and what skills they will need to succeed.” 

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Outside of important skills, the new Manufacturing Institute report also called attention to the need for manufacturing organizations to change their cultures in order to attract and retain skilled talent. Forty-seven percent of survey respondents noted that flexible work arrangements play a key role in keeping employees. But Lee said the data suggests there is more manufacturing organizations can do to support workers as Baby Boomers retire and younger generations come in.  

“One of the biggest takeaways is that culture matters when it comes to building and retaining a qualified workforce,” she said. “Looking at how you can cultivate a healthy ecosystem that rewards and reinforces talent is key. Manufacturing engineers already occupy a leadership position, so it’s important that they continue to think about how to foster a culture that supports employees—from continually educating and upskilling their teams, to considering childcare needs and flexible scheduling that can make a big difference to employees.” 

Kayt Sukel is a technology writer and author in Kansas City.