How Technology Addresses the Manufacturing Labor Shortage

Posted by Andonix on Aug 7, 2019 8:39:50 AM

Job openings in manufacturing have grown at double-digit rates since 2017 and are very near the all-time high recorded in 2001. Despite public perception that American Industry is in decline, a recent study by Deloitte shows that between 2018 and 2028, an estimated 2.4 million positions will remain unfilled.

manufacturing labor shortage

Unemployment rates have sat at or below 4% consistently for a full year dating back to July 2018, and those that are available consistently lack the STEM skills needed to fill modern industrial jobs. Other factors leading to a shortage include:

  • Shifting skillsets related to the use of advanced automation
  • A persistent misperception about the nature of manufacturing jobs
  • A wave of retirements from baby boomers who hold significant accrued knowledge
  • The hidden factory dilemma facing the front line due to a lack of collaborative tools

The good news is that technology can be used to address these challenges: improving retention, attracting new talent, and engaging workers to help build vital skills in the workforce. Let’s review how companies are doing this.

Improving Retention and Attraction

Software systems, AI and machine learning are being implemented to help companies identify top talent, attract individuals with the critical thinking and programming skills needed to manage automated systems, and keep that talent once hired.

In a recent study of the world’s best companies, Harvard Business Review found several unique traits that enable companies to build better work environments. Arup, for example, is one of the world’s largest creative design and engineering firms, but they carefully integrate skills across the spectrum of talents needed to succeed – from economics to mathematics, creative design and even social sciences. To engage their employees, Arup encourages them to work across skillsets and disciplines to tap into holistic thinking that brings new perspectives to familiar problems.

Deloitte and the Manufacturing Institute outlined several ways that manufacturers can positively influence the future of work, including:

  • Collecting and leveraging resources from retiring employees.
  • Building new, more engaging training programs designed for the next generation.
  • Implementing apprenticeship and one-to-one training programs supplemented by technology.
  • Leveraging technology to supplement jobs and expand performance opportunities in your organization.

Investing in Engagement

Engaged workers stay on longer than those who are not. According to a Corporate Leadership Council survey, the most engaged workers (those who are excited to come to work and proactively involved in the organization) are 87% less likely to leave theirs. The top companies to work for in the same study had a 13% voluntary turnover rate, compared to 28.5% in comparable industries.

With the cost of replacing an employee sitting at 1.5x the employee’s salary, retention is one of the areas in which companies can have the largest impact on their bottom line. Engagement is the first step in doing that.

Boosting Overall Work Satisfaction

How someone feels about their job is notoriously difficult to quantify. We rely on anonymous surveys and aggregated data for different industries, but we do know it has an impact.

Companies listed in the “100 Best Companies to Work for in America”, for example, generated 2.3% to 3.8% higher stock returns per year than their peers from 1984 through 2011. Happy employees are more productive, leave less often, and generate value.

Improving the Work Experience

To foster an environment of collaboration in which workers feel more satisfied in their daily tasks, more engaged with the values and overall mission of the company, and more inclined to invest personal capital into the success of their employer, a better work experience is needed.

When a workplace offers intrinsic rewards, employees are rewarded with a better cohort of co-workers who in turn help motivate them to perform better. Weaker performers can more easily see paths to improvement, and the rewards received by those taking such paths. The front line gets the chance to self-develop with e-learning platforms and create value in new and exciting ways. A lot of this can be done with a technology-oriented approach to connected workers. Such a platform helps organizations:

  • Communicate with transparency to the front line. Ideas no longer trickle down from the top slowly. They are communicated clearly and directly to the front line to facilitate change and open communication.
  • Provide tools for employees to solve problems quickly by asking for help. Employees become more autonomous and are encouraged to take an active role in addressing challenges as they arise. They feel greater ownership over their contributions.
  • Implement multiple communications channels through a single interface. Removing barriers to quick communication from anywhere in the organization – board room or front line – makes it faster and easier to address challenges.
  • Make people comfortable signing their names to comments. Employees are empowered to provide feedback and engage in an active conversation about how to implement improvements in the organization.
  • Ensure all relevant information is accessible to the front line at all times. Having enough information to their job well when they need it is empowering. It turns laborers into knowledge workers.

Training programs, engagement-oriented communication platforms, and improvements to the management style in your organization can have a direct impact on your ability to find and hire top talent. When yours becomes a company that everyone wants to work for, you won’t need to fight for the best of the best any longer – they’ll come to you.

Download our recent eBook, Are you still guiding your front line with a broken managerial model? to learn more about how organizations of all sizes are shifting out of decades-old silos to make everyone visible and transition their labor workers into knowledge workers and spark new ideas.

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Topics: Industry 4.0