SAN BERNARDINO COUNTY (January 27, 2017) – The Manufacturing Institute estimates that by the year 2025, 2 million jobs in advanced manufacturing will go unfilled. Why is there such a significant number of unfilled positions? Although there are likely a variety of reasons, one of the most important – and alarming – is the existence of the skills gap in advanced manufacturing.
What is the skills gap?
As the U.S. economy has recovered and manufacturers have gained some traction, employers have been looking to grow their companies. However, they have discovered a severe talent shortage during their hiring process. This need for employees with a specific set of skills, but the lack of a labor pool to draw from is called a skills gap.
Research shows that it takes manufacturers an average of 90+ days to recruit highly skilled workers that fit their needs. And the gap is only widening. Along with standard manufacturing growth (which will create about 700,000 new jobs), an estimated 2.7 million baby boomers are expected to retire over the next decade. This leaves openings for around 3.4 million manufacturing jobs, with only 1.4 million likely to be filled.1
What can potential workers do? Many are willing to put in the time and effort to learn the industry skills, but they don’t have the financial resources to do so. And by not being able to meet the minimum skills requirements expected by advanced manufacturing companies, both workers and employers are stuck in limbo. It is a problem that not only affects the individuals, but America as well.
How the skills gap affects America’s economy
Without a strong manufacturing industry, the nation’s economic prosperity will suffer. Since the industrial revolution, manufacturing has contributed to higher export potential, better standards of living, and more jobs. Additionally, every dollar spent in manufacturing returns $1.37 to the U.S. economy, and every 100 jobs in a manufacturing facility creates an additional 250 jobs in other sectors.
America is at a crossroads right now. Although many companies have looked to other countries for their facilities, there is a growing trend to keep products and services homegrown. As a direct result of keeping manufacturing facilities on American soil, the U.S. will have more exports for trade, which will allow the national debt to decrease. It is vital to continue the support of the U.S. manufacturing industry. Unfortunately, the skills gap may prevent it from happening.
Many CEOs and manufacturing executives around the world have identified talent-driven innovation as the number one determinant of competitiveness. But without the talent, how can they innovate? The Skills Gap study by the Manufacturing Institute also indicated the following:
- 82 percent of executives believe the skills gap will impact their ability to meet customer demand.
- 78 percent believe it will impact their ability to implement new technologies and increase productivity.
- 69 percent indicate it also impacts the ability to provide effective customer service.
- 62 percent think it impacts the ability to innovate and develop new products.
One explanation for why the skills gap exists is because of America’s perception of the manufacturing industry. Studies reveal that while Americans consider manufacturing among one of the most important domestic industries for maintaining a strong national economy, they rank it low as a career choice for themselves. However, there is hope. Those who have a familiarity with the industry are twice as likely to encourage their children to pursue it as a career. Therefore, it is important for manufacturers to engage people through community, educational, and government programs in order to improve the perception of the U.S. manufacturing industry.1
The “myth” of the skills gap2
Despite estimates that the skills gap prevents up to 80 percent of companies from hiring quality workers, a recent study suggests the skills gap may not be as big of a problem as previously believed. Research by Andrew Weaver, professor of labor and employment relations at University of Illinois, and Paul Osterman of the Massachusetts Institute of Technology, estimate that there is only about 16 to 25 percent of a potential skills gap for unfilled positions, a finding that sharply contrasts with what is widely reported.
This study differs from others because it is the first to measure the precise skills manufacturers look for in conjunction with hiring outcomes and organizational characteristics. Weaver and Osterman found that one of the most significant predictors of long-term vacancies was demand for higher-level math and reading skills.
However, the greatest probability for long-term vacancies proved to be for job positions in manufacturing plants that are members of “clusters,” or that demand highly specialized skills. Many manufacturers that are part of a cluster are smaller companies who don’t have the resources to fund a training department or large recruitment department. Because of this, they are more likely to have job positions, with specific skill sets, that go unfilled for long periods of time. In other words, there is no problem with finding quality workers, but rather finding skilled employees who can serve the niche demands of those advanced manufacturers.
So, Weaver and Osterman argue that rather than proving a skills gap exists and pointing to a low-quality labor supply, the results indicate that manufacturers need to look at the demand of their industry and how to bridge support to create a supply of workers who meet their skill set. From there, they will realize the importance and need for intermediaries, such as community colleges and trade associations, that will help balance out the supply and demand of the labor market.
How the InTech Center helps the manufacturing industry labor market
The InTech Center is a state-of-the-art facility that recognizes the supply and demand problem in the manufacturing industry market. Our goal is to train as many individuals as possible so that they can become qualified candidates for unfilled positions in advanced manufacturing. In order to meet the demand of employers, we reach out to them directly to ensure we train individuals to meet the correct qualifications.
Having the necessary skills and talent is essential; 64 percent of manufacturing executives say that training and certification programs are most effective for building a quality workforce.1 All of the programs at the InTech Center are NCCER certified, which allows our students to make the biggest positive impact on prospective employers.
Ready to make a change in your life? The InTech Center offers tuition-free programs to you that help you qualify for high-paying advanced manufacturing careers in the Inland Empire. Testing and book fees may apply. Programs include Craft Fundamentals, Industrial Electrical Pathway, Industrial Mechanical Pathway, HVAC Pathway, and more. Find out about some of our programs here.
After successful completion of these programs, our Career Center works with you to practice interviewing skills, develop an effective resume, and help you find a job. To learn more, attend the next InTech Center Information Session on Thursday, March 2, 2017, from 9 a.m. to 11 a.m.
Sources: The Manufacturing Institute, The Skills Gap in U.S. Manufacturing, 2015 and beyond  Phys.org, Skills gap for US manufacturing workers mostly a myth, paper says