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Tackling the Skilled Labor Shortage as a Manufacturing CEO

February 24, 2016

The labor shortage tops the list of issues manufacturing CEOs are dealing with this year; Find out how some CEOs are handling the problem.

Studies show that America will experience a shortage of roughly 2 million skilled workers over the next decade, a problem that CEOs everywhere are attempting to tackle. Making the industry more attractive to the millennial generation depends on (among other things) job flexibility and the use of technology. A highly skilled workforce is an indispensable part of the manufacturing industry, so tackling the issue of the labor shortage is at the top of every manufacturing CEO’s “To Do” list this year.

How CEOs are managing

High school immersion- Many companies have instituted shadowing programs with high schools in their areas to give students a taste of a job in the manufacturing profession. More often than not, these shadowing opportunities lead to summer work-based learning experiences, and even part-time employment opportunities during the school year. Some companies even offer to match students’ earnings (up to a certain point), to put towards college savings.

Apprenticeships - Offering apprenticeships is something a lot of companies are participating in. Many manufacturers have started their own manufacturing training programs that allow students to work part time at their companies and attend community or technical college on their off days. This allows students to be paid (usually at least $12 an hour) while still attending school. By the time these apprentices graduate, they have become industrial technicians making as much as $25- $35 an hour.

Vocational schools and community colleges- Reaching out to community colleges and vocational schools is a helpful effort for some CEOs in that they are able to directly address the need for a curriculum focused on manufacturing. Many manufacturers are led by the mindset that reshaping education is a vital part of tackling this issue. Their goal is to stress that employment, rather than merely a degree, should be the student’s ultimate goal.

Increased innovation- Tailoring operations around the millennial generation is another tactic used by CEOs as of late. Rethinking the traditional business model has helped manufacturing executives advance and appeal to millennials. Millennials value diversity, advanced technology, and collaborative innovation. Read our blog, “Targeting Millennials in the Workplace” for tips on attracting millennials to your company.

Internal training programs- Though risky, hiring workers without the appropriate skills is a tactic used by some manufacturers. Internal training can be very effective, but keep in mind that it comes with substantial cost and productivity loss.

With the impending retirement of many baby boomers who make up a large portion of the current industry workforce, it has become quite clear that the labor shortage will be a headache for manufacturers in the coming days and beyond. Early immersion in middle and high schools seems to be a helpful tactic in attempting to fight this issue, but CEOs are encouraged to tailor their operations and capitalize on any chance to innovate business to attract more millennials.

Questions? Contact any member of our Manufacturing Services Group.

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