Overcoming the Challenges of an Aging American WorkforceApril 14, 2016
Manufacturers already have a tough time filling new positions; Learn how companies are dealing with an impending wave of retirements.
Last month, the Boston Globe reported on the pending crisis being caused by the economy’s inability to replace the retiring Baby Boomer generation in the American workforce (“As boomers retire, growth may slow;” February 17, 2016). In the manufacturing sector, which already suffers from a skills gap, the shortage of skilled workers will only be exacerbated by this trend.
Is this a new problem?
The wave of retirements shouldn’t be a surprise to anyone. It has long been predicted. But it nevertheless leaves employers in our region and across the country in an increasing bind as they search for replacements.
According to a forecast published by the New England Economic Partnership, employment growth in Massachusetts is expected to fall by more than half by 2018. This is not due to lack of demand, but rather due to a lack of workers who are capable of filling open positions. This shortfall in labor is expected to have a similar effect on the state’s economic growth percentage for the same period.
How are manufacturers coping?
My recent blog: “Tackling the Skilled Labor Shortage as a Manufacturing CEO,” covered this issue in more detail but some manufacturers are attempting to tackle the problem by:
- Forecasting retirements- Trying to determine their employees’ retirement intentions as early as possible allows companies to make a better assessment of their skills gap, not only today, but into the future. Considering how long it can take companies to hire and train workers, having an up to date assessment in this area is important. Forecasting retirements also can provide the opportunity for a more orderly transfer of skills to a new generation while the prospective retiree is still in the fold.
- Working together- There are signs that large manufacturers are also pressing smaller suppliers within their supply chain to share their plans for addressing labor and skill shortages. The question cuts to whether these small suppliers can viably maintain their ability to deliver components needed within the supply chain on a timely basis.
Still, with these potential best practices developing, many companies haven’t even started to prepare themselves for the wave of retirements to come. This will be the great challenge of human resource managers in the manufacturing sector in coming years. A lack of planning and action could lead to a severe knowledge gap in a sector of our economy that is already strapped for skilled workers.
Questions? Contact any member of our Manufacturing Services Team.