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ASCM Insights

Why Are 500,000 Manufacturing Jobs Sitting Vacant?

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U.S. manufacturing activity is at a tipping point. In March, national factory activity reached its highest level in nearly 40 years. On top of that, U.S. President Joe Biden has promised to make investments to improve domestic manufacturing capabilities, especially for critical items like semiconductors. However, this progress is being stifled by the fact that the industry is grappling with a significant talent shortage. Despite the high unemployment rates throughout the last year, approximately 500,000 manufacturing jobs are sitting vacant.

Of course, this talent shortage is not new, but it is getting worse. If manufacturers can’t find a way to attract more workers, there could be 2.1 million unfilled manufacturing jobs by 2030, which could cost the U.S. economy as much as $1 trillion, according to a study released this week by Deloitte and The Manufacturing Institute. The study explained that there are three critical talent hurdles hindering manufacturers:

  1. Skills gap: Some of the jobs, like welding, CNC machining and machine maintenance, require a special set of skills that not every worker has. Plus, baby boomers with these skills are starting to retire, creating even more gaps. A further complication is that digital transformations to smart factories will create a need for a different set of skills that might not even exist yet.
  2. Shared talent pool: Entry-level jobs are sitting vacant too, despite the fact that these jobs often pay about double the federal minimum wage. The challenge here is that the warehouse and distribution industry, which offers comparable wages and flexible shifts, is fishing from the same talent pool and luring away more workers.
  3. Different career expectations: Students and their parents are not showing much interest in the industry. In addition, new entrants to the job market have different expectations for jobs and careers. For example, work-life balance is the number-two priority — behind pay – for potential manufacturing workers, the report notes. However, this also is the top area where survey respondents said manufacturing companies were lacking.

Although diversity and inclusion strategies typically are a great way to fill talent gaps, the lack of work-life balance is weakening this option too. In line with other COVID-19 pandemic workforce trends, surveyed women were nearly twice as likely as men to contemplate leaving the industry. The women cited the lack of work-life balance and the need for flexible schedules as top reasons to leave.

Still, Deloitte and The Manufacturing Institute say diversity and inclusion will be an important strategy for finding workers to fill jobs. The report authors also recommend recruiting military veterans and soon-to-be high school graduates by showcasing the career-building opportunities and attractive pay in manufacturing. Employers also should think about ways to incorporate more digital tools to make the work more exciting and offer more flexible hours to create better work-life balance.

Resilient workers wanted

Despite what some jobseekers perceive, the manufacturing industry truly is growing and innovating to become an exciting career field.

If you or someone you know is one of the quarter of unemployed workers who is thinking about a career change, I invite you to check out ASCM’s career-transition resources. We can help you

ASCM also is dedicated to helping organizations cultivate skilled talent to meet their production goals. We offer group training classes to help close supply chain skills and knowledge gaps within companies. Employers also are invited to post their job opportunities on the ASCM Job Board to connect with their next great hire.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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