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Is The Lack of Skilled Workers Hurting The Manufacturing Industry?

Posted by Louis Flory

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4/15/15 10:55 AM

If you’re in the manufacturing industry, you may have already experienced the phenomenon reported by Accenture and The Manufacturing Institute in a recent study.
Many manufacturers are experiencing an earnings hit that tracks back to a shortage of skilled workers, both permanent employees and contingent workers. According to the survey, executives report that the lack of qualified, skilled candidates is severe and many state that it’s getting increasingly difficult to hire the people needed to meet production demand.

Solving the problem of the skilled worker shortage isn’t as easy as hiring to fill critical positions now and hoping a fragile status quo doesn’t change. Manufacturing executives and managers must have strategies in place to deal with labor deficiencies, both now and in the future. When you consider the significant effects that a skilled shortage can have on your company, you’ll see why it’s so important to plan ahead. 

How does the skilled worker shortage impact the manufacturing industry?

  • Overtime and Downtime: When manufacturing companies face workforce deficiencies, overtime and downtime increase, resulting in additional labor costs that range from 5-10% more than average. Production cycle times are also higher, impacting material inventory and product quality. Study respondents reported that these times exploded by as much as 66%, typically as a result of a lack of manpower to maintain and operate equipment.
  • Workers vs. Managers: Technological advancements have produced highly efficient solutions to configure, control and monitor the manufacturing process. However, this technology requires a more-developed skill set, which has blurred the line between managers and skilled workers. High demand for properly qualified workers means the number of proper candidates is limited.
  • The Dollars and Cents: To alleviate the shortage of skilled workers, manufacturing companies must invest more in training new personnel – whether full time employees or a contingent workers. Over half of the study participants stated that they’re spending over $1,000 per new worker, while just 42% reported spending the same amount as in the past. 

What can you do to alleviate the strain caused by a lack of skilled manufacturing workers?

  • Establish a strong recruiting process: You need to lure the best talent to your company, so it’s important to put some effort into your hiring process. Many companies find it helpful to outline the skills and talents of their “ideal employee,” and then formulate the job description around these details. You may also want to consult with an agency to vet proper candidates, whether you’re looking for full time or contingent workers.
  • Give your employees and contingent workers a reason to stick around: If you’re experiencing a lack of skilled manufacturing personnel, you can be sure that other companies are going through the same issues. You can put your business at risk to losing your team to others unless they’re happy where they are. A combination of salary, benefits and job satisfaction should help you keep them around.
  • Have a Plan B: Always have a strategy in place for the inevitable time when you’re hit with a lack of skilled personnel. It’s quite likely that the demand for these individuals fluctuates, which means your need may only be shortlived. Contingent workers can help you meet your requirements.

There’s no question that the lack of skilled employees has a grave impact on the manufacturing industry, from production problems to delays to overtime costs. However, you’re in a better position to face workplace deficiency challenges when you have a carefully crafted recruiting strategy in place and an established plan to bring on contingent workers when needed.

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Image Source: Department for Business

Topics: Workforce Management, Contingent Workers, Industry News