“Manufacturers can’t find workers!”
“The labor shortage is looming. 2 million job vacancies approaching!”
“Skilled labor is difficult to find!”
While these exclamations might seem as if they are exaggerations, they also ring true to one of the most important and impending issues within the future manufacturing sector: the skills gap. Reports on both sides have statistics to back up their claims. Some say there is an issue, while others assert the skills gap is blown out of proportion. Does it really exist? With conflicting data, what could it mean? Perhaps there are unexplored factors for each employer and company which might be contributing to research on either side. Geographical location could also be a factor. This issue of the skills gap consistently appears across the board in industrial articles, reports, and magazines. It has been one of the most talked about subjects this year. Let’s examine a summary of both sides.
Does the Skills Gap really exist?
According to a joint 2015 study by Deloitte and The Manufacturing Institute, the skills gap is expected to result in 2 million jobs going unfilled over the next decade. The causes of these openings are the retirement of the seasoned professionals within the Baby Boomer generation as well as economic expansion. Of the executives surveyed, they believe that the skills gap will impact their ability to meet the demand of customers, implement new technology, innovate, and increase productivity. 80 percent of executives would pay more than the market rates in workforce areas, but this might not completely solve the gap. Employees or applicants currently lack technology skills, math skills, problem solving skills, and technical skills.
While executives do see a gap, not everyone is feeling the sting now. PwC conducted a survey about the skills gap. In their findings, 33 percent of manufacturers believe to have small to no difficulty in hiring talent, while 44 percent have “moderate” difficulty. Most manufacturers are not feeling the sting of a skills gap now, but 31 percent of them believe it is on the horizon within the next three years.
Andy Bushmaker, senior human resource manager at KI Furniture in Green Bay, WI says awareness is the most important thing. People need to be educated about the opportunities and the changes in manufacturing. Bushmaker asserts that environments are safe and clean and “technology is much more advanced than 20 years ago.”
Or doesn’t it?
“I think [the] ‘skills gap’ has run its course. It’s over hyped and overrated,” says Janice Urbanik of Partners for a Competitive Workforce in Cincinnati. She asserts that it is not the only factor playing into the issues, nor one of the more pressing factors. While the requirement for a greater level of skill does exist, things are not adding up. If there were a massive level of job openings, there would be a hike in wages, but that has not happened. The lack of change therefore could represent a problem in a lack of good paying jobs, not in a lack of good workers. Lesley Hirsch the director of the New York City Labor Market Information Service said, “The national skills gap notion is a fallacy, because there’s no national labor market. There are regional labor markets.”
Andrew Weaver, labor and employment relations professor at the University of Illinois, says research findings show that manufacturers are generally able to find the workforce they seek. “We estimate an upper bound of job vacancies due to a potential skills gap of 16 to 25 percent of manufacturing establishments—a finding that sharply contrasts with…reported figures of more than 60 to 70 percent,” says Weaver. The reason for this difference is that other research isn’t taking into consideration geographic and industry dynamics.
Additionally, manufacturers are fairly set in their ways and what worked before isn’t always going to work now. Especially as manufacturing changes. During the 1970s, there were about 1,500 coworkers for every worker. By 2006, this figure had fallen to to just 760. This is affecting the production system within America. Now there are smaller facilities with smaller capabilities to train.
Let’s Find Out
There is a lot of mixed research. Is there or isn’t there a skills gap? Why do some companies feel there will be? Does geography play a role? As a popular topic of discussion throughout 2016, we have decided to select a few individuals to interview and offer their perspective on the skills gap and which factors play a role in it. Keep an eye out for those interviews throughout the month.
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