Manufacturers to be hit with skill shortage due to retiring Baby Boomers
When Labor Day was instituted by President Grover Cleveland as a federal holiday in 1894, the need for skilled manufacturing workers in America was on an upswing. In 2011 another surge is in the offing - though for different reasons - according to a tracking survey of industry senior executives commissioned by Advanced Technology Services, Inc. (ATS) and conducted by The Nielsen Company.
Among the top findings of the online survey of 100 VP-level and C-level executives, completed in August:
- 55% of largest U.S. manufacturers polled - those with $1 billion or more revenue - will be hardest hit by skill shortage costing each $100 million or more over the next 5 years.
- 45% of the companies surveyed are encouraging their older workers to stay on the job.
- 50% of respondents said they currently have 11 or more open positions for skilled workers, with 31% having over 20 open slots.
"This is an essential time to be in manufacturing considering other sectors are seeing hiring slow down. Many young people overlook the opportunity and high wages that careers in manufacturing afford," said Jeff Owens, President of Advanced Technology Services. "As you can see form the rebound and the shortage of skills that manufacturing is experiencing, opportunities for profession growth and excellent wages are plentiful for people with the technical skills required."
Respondents in the ATS/Nielsen survey were from a wide range of manufacturing companies, with the top three being "other discrete [product-centric] manufacturing" (44%), "electrical equipment manufacturing" (26%), and "motor vehicle parts manufacturing" (13%). All companies sampled in the survey have revenues of $10 million or more; 38% fall between $10 and $100 million, and 36% tally revenues of between $100 million and $1 billion. The rest (26%) generate $1 billion or more.
While 47% of respondents said they would be interested in filling their open slots with full-time workers, 53% said they are more likely to outsource the positions. Maintenance (48%) and IT (48%) functions are most likely to be outsourced, followed by HR (27%). Forty percent said they would outsource entire facilities, while 22% would not consider outsourcing any of these functions.
Optimistic, but Cautious
Nearly three in four executives surveyed (72%) said they have seen an uptick in manufacturing production in the last 12 months. They also cautioned that political turmoil and high commodity prices could derail the fragile recovery. Of all issues facing American manufacturing, clearly the most threatening issues are coming from the economy. Beyond foreign competition, increased government regulation and the skilled labor shortage, economic stability (68%) was cited as the biggest issue facing American manufacturing over the next five years.
Source: Advanced Technology Services
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