Report Confirms Skilled Labor Gap Already Impacting
By David R. Butcher
We've frequently covered the purported threat of an impending loss of manufacturing's skilled workers. A new report now offers in-depth data that show the labor shortage is not only inevitable, but it is already affecting manufacturers.
A lack of engineers and skilled workers is a threat to United States' manufacturing, perhaps ...
Report Confirms Skilled Labor Gap Already Impacting
By David R. Butcher
We've frequently covered the purported threat of an impending loss of manufacturing's skilled workers. A new report now offers in-depth data that show the labor shortage is not only inevitable, but it is already affecting manufacturers.
A lack of engineers and skilled workers is a threat to United States' manufacturing, perhaps more so than outsourcing, China, NAFTA or Bangladesh. This shrinking U.S. manufacturing base may not be breaking news. However, newly released numbers now expose the considered widening gap between the dwindling supply of skilled U.S. workers and the growing technical demands of the modern manufacturing workplace.
Released earlier this month, an in-depth study called "2005 Skills Gap Report," conducted by the National Association of Manufacturers (NAM) and Deloitte Consulting LLP, reported that manufacturers are currently feeling the pressure of a skilled labor shortage.
The results of this survey confirm the skill shortages that have been the catalyst for heated debate, pithy finger pointing, harsh argument, abusive verbage and textual fist fights "” in the media, throughout the industry and from you, dear readers "” over the span of this year. As the report noted:
The details behind the talent shortage reveal a stark reality. More than 80 percent of respondents indicated that they are experiencing a shortage of qualified workers overall "” with 13 percent reporting severe shortages and 68 percent indicating moderate shortages. Also worrisome is the finding that 90 percent of respondents indicated a moderate to severe shortage of qualified skilled production employees, including front-line workers, such as machinists, operators, craft workers, distributors, and technicians. As expected, the research showed that engineers and scientists are in short supply, with 65 percent of manufacturers reporting deficiencies "” 18 percent severe and 47 percent moderate.
For employers, basic demographic, social and educational trends indicate a gloomy supply outlook:
"¢ The exodus of Baby Boomers from the workforce with substantial accumulated skills will reduce the available talent pool;
"¢ Changing attitudes about careers and job satisfaction among Generation Y-ers;
"¢ Changing job requirements, necessitating some level of technical skill in almost all jobs and making truly unskilled jobs a thing of the past;
"¢ Significant dissatisfaction among manufacturers with the quality of K-12 education and the dearth of adequate career counseling;
"¢ Declining percentage of students in U.S. universities studying science and engineering; and
"¢ Research has shown a direct relationship between manufacturing's negative image - which is tied to the old stereotype of the assembly line - and the decreasing number of young people pursuing careers in the industry. ("Many believe that jobs in the sector have a Henry Ford-like assembly line drudgery, complete with dark, dirty conditions," David Bartlett, a consultant with RSM McGladrey of Minneapolis, recently said . "That notion is as outdated as the Model T.")
Especially worrisome, noted an IndustryWeek article on the survey, is that 83 percent of respondents are currently experiencing difficulty in meeting customer demands due to the lack of skilled workers. More than half are finding it hard to meet production levels and 43 percent say the shortage is impeding efforts to increase productivity.
"The pain is most acute on the front line, where 90 percent report a moderate to severe shortage of qualified skilled production employees including machinists, operators, craft workers, distributors and technicians," said Richard Kleinert of Deloitte Consulting LLP. "Engineers and scientists are also in short supply, with 65 percent of respondents reporting current deficiencies."
However, while all respondents appear impacted, not all segments of the workforce are affected equally. The most significant (i.e., largest) shortages occur for technical skilled employees and engineers, but more than one-third of respondents also claimed shortages of unskilled production employees:
"¢ Ninety percent of respondents indicated a moderate to severe shortage of qualified skilled production employees. This result does not vary significantly when controlling for size, industry segment or region.
"¢ Sixty-five percent of all respondents and 74 percent of respondents with more than 500 employees reported a moderate to severe shortage of scientists and engineers. This shortage is even more acute for certain industry segments, such as aerospace and defense, with 80 percent of respondents indicating a moderate to severe shortage.
"¢ Thirty-nine percent of respondents also indicated a moderate to severe shortage of qualified unskilled production employees.
The survey's findings in summary:
"¢ Today's skill shortages in manufacturing are extremely broad and deep, cutting across industry sectors and impacting more than 80 percent of the companies surveyed;
"¢ Skills shortages are having a widespread impact on manufacturers' abilities to achieve production levels, increase productivity and meet customer demands; and
"¢ High performance workforce requirements have significantly increased as a result of the skills gap shortage and the challenge of competing in a global economy, according to nearly 75 percent of the study's participants.
Among the surveyors' recommendations, the study urges the following:
"¢ Educators to emphasize science, math and technology-related programs in K-16 curricula; and invest more in teachers' math- and science-focused education, and ensure that programs regarding career opportunities and requirements for graduation are geared for 21st century employment;
"¢ State education standards to include career education as measurable criteria for K-12 success;
"¢ Government to partner with business to improve the K-12 and community college system to develop a high-performance workforce; and
"¢ Employers to invest at least three percent of payroll whenever possible in training for current employees.
View the entire National Association of Manufacturers (NAM) and Deloitte Consulting LLP study, "2005 Skills Gap Report".
References
2005 Skills Gap Report - A Survey of the American Manufacturing Workforce
by Phyllis Eisen, Jerry J. Jasinowski and Richard Kleinert
National Association of Manufacturers (NAM) and Deloitte Consulting LLP, Nov. 22, 2005
http://www.nam.org/2005skillsgap
"˜Skills shortage' plagues local manufacturing
by Darrell Ehrlick
Winona Daily News, Oct. 27, 2005
http://www.winonadailynews.com/articles/2005/10/27/news/01manufacturing.txt Worker Shortage Already Affecting Manufacturers
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