To Address Labor Shortages, Manufacturers Must Become Talent Creators
Our nation is facing a dire shortage of manufacturing workers. The National Association of Manufacturers forecasts that by 2030, the United States could have 2.1 million unfilled manufacturing jobs. A March 2022 survey from Deloitte and the Manufacturing Institute found that nearly half of manufacturing executives said they have had to turn down business opportunities because they lacked enough workers.
We’re not going to grow our way out of this problem. As baby boomers retire and millennials reach middle age, the Congressional Budget Office predicts that the American labor force will grow by less than 0.2% per year through 2031. As America renews its promise of investing in infrastructure, it is vital that we build pipelines to fill these jobs.
To meet their employment needs, manufacturing companies must become talent creators. Operating under the old model of talent consumption isn’t an option when there simply aren’t enough workers, skilled or otherwise, to hire. Because hiring is expensive, it makes financial sense to invest in models that let companies harvest the rewards of growing their own talent.
To this point, there are a growing number of examples of companies awakening to this reality. Electric vehicle maker Lucid Motors wanted to start production at a new Arizona plant and didn’t have time to hire and train new workers. So it partnered with local government, the local community college and the state’s economic development agency to build and equip a state-of-the-art training facility. By last September, when the new plant began production, more than 700 workers—the entirety of Lucid’s hourly workforce—had used this training facility.
Another car maker, Germany’s BMW, used the grow-your-own approach out of necessity when it picked South Carolina as the site of its first American plant. As the plant grew to more than 11,000 employees, BMW expanded its commitment to worker training. BMW’s apprenticeship program now works with four area community colleges, and the company recently announced plans to open new training avenues for high school seniors and people with degrees or experience in select technical fields. This summer, BMW expects to open at its South Carolina plant a new $20 million training center that it will use to conduct professional development and technical instruction.
Even smaller companies have committed to creating and nurturing their own talent. Taco Comfort Solutions, a family-owned HVAC manufacturer based in Rhode Island, works with local two-year and four-year colleges to provide in-house, on-site training for both new hires and valued long-time employees. These company-paid learning opportunities include job-related skills training as well as education toward degrees ranging from a GED to a masters degree.
Upskilling and reskilling of existing employees is also a vital piece of this employment puzzle.
In this regard, manufacturing companies can learn a lesson from Prudential. The Fortune 500 financial services firm is working to create a one-stop shop for all employees—regardless of where they work and what they do—to develop new technical and functional skills and take control of their careers within the company. Managers, meanwhile, are looking for new skills-based talent internally from among the ranks of employees who have completed Prudential’s training programs.
There’s another good lesson to be learned from Taziki’s Mediterranean Café, a fast-casual chain with about 90 locations nationwide. Many of its kitchen workers speak very limited English—good enough to turn out food but not nearly fluent enough to work in the front of the house or as a manager no matter how skilled they were. So Taziki’s turned to a language upskilling platform to help employees improve their English. The company saw immediate results, with kitchen staff members getting promoted to better-paying jobs with more responsibility.
But not all manufacturing companies (nor those in many other sectors ranging from aviation to allied health) can create their own talent programs. There’s certainly a need to develop new mechanisms whereby companies can “invest” in training the talent they need.
Companies should work with high schools, community colleges and training programs to raise awareness of manufacturing jobs — and the skills students should learn to land these positions.
Starting or expanding apprenticeship programs that combine learning and working can bring talented students right from high school or college right to the factory floor.
Companies also should reach out to people who are underrepresented in manufacturing, such as women and veterans. One example is Union Pacific, which is aiming to double the number of women in its workforce over the next decade. In tandem with The Manufacturing Institute, the railroad is offering new digital and virtual STEM curricula and experiences that help get young women interested in careers in transportation, manufacturing and engineering.
By looking for potential rather than prior experience/jobs when they source workers, companies can broaden their candidate base.
For manufacturing companies that invest in grow-your-own talent strategies, demographics don’t have to be destiny and worker shortages don’t have to cripple dreams to get bigger or more profitable. Much like they make products, manufacturers must now engage in 21st century strategies designed to produce talent. It’s time for a new industrial revolution — one where companies aren’t consuming talent but creating it.
Chris Keaveney is the CEO of Meritize.
