Every quarter, the National Association of Manufacturers (NAM) surveys 14,000 manufacturers to gain better insight about economic and hiring outlooks. Results from the most recent survey show the majority of manufacturers (94.6 percent) are optimistic about their company’s outlook.
NAM CEO Jay Timmons believes tax reform will increase the number of available manufacturing jobs to 2 million by 2025 – a staggering increase from the current 350,000 jobs. Additionally, more than half of CEOs stated they plan to hire more workers in the coming year.
However, even with many forecasting an upswing in business, finding qualified employees remains the top business challenge for most manufacturers.
On a positive note, Bruce Pulkkinen, senior advisor and former president of Windham Millworks, anticipates tax reform may help companies improve salaries, wages and other benefits to improve employees’ standard of living – which could attract quality employees. However, the manufacturing industry still has a long way to go in tackling long-standing labor challenges.
The NAM article below dives deeper into the issue as companies look to address the skills shortage.
Skills Gap Creates Tangible Loss for Businesses
In the latest NAM Manufacturers’ Outlook Survey, the inability to attract and retain a quality workforce is the top business challenge, cited by 72.9 percent of respondents. This continues to be one of the most cited issues for manufacturers, especially as the labor market has tightened significantly. It was closely followed by rising health care costs, at 72.3 percent, which was the number one problem in the prior quarterly survey.
In digging deeper into this issue, 79.8 percent of respondents said they have unfilled positions within their company that they are struggling to fill with qualified applicants.
Unfortunately, 34.4 percent of respondents said their company had been unable to take on new business and had lost revenue opportunities because of the inability to attract and retain workers, showing that the skills gap creates real and tangible losses for many companies. However, 52.1 percent said they had not lost business or revenue from their workforce challenges.
Searching for Solutions
In trying to address their skills shortage, two-thirds of manufacturers were working their existing workforce more, with 64.5 percent creating or expanding internal training programs (Figure 7). They were also addressing their workforce challenges by collaborating with educators on skills certification programs (56.5 percent), utilizing temporary staffing services (55.4 percent), encouraging possible retirees to stay longer in their roles (34.5 percent) and working with the local employment office (29.1 percent).
For those respondents offering other solutions, examples included using a headhunter, modifying their approaches to recruiting (such as increased usage of social media) and using temporary help. In addition, roughly 10 percent have considered moving to another location to address their workforce needs.