The December 21 jobs report was confusing, but not all that surprising. We’ve known for a while that COVID would have a dramatic impact on our economy. Last month’s report is another indication of just how much the pandemic has reshaped our workforce. Now, more than 2 million workers have left the workforce entirely. Is this permanent? That is yet to be seen. I have the opportunity to talk each week with other business leaders across the country, and right now, there is tremendous angst across state chambers and manufacturing associations because of the changes in the labor market.
In May of 2021, The Manufacturing Institute together with Deloitte released a study on the state of the manufacturing workforce. They estimate that by 2030, manufacturers will need to fill 4 million jobs, 2.1 million of which could go unfilled if we can’t motivate and incentivize individuals to pursue manufacturing careers. But this isn’t just another symptom of the pandemic. In March 2021, U.S. manufacturing activity surged to a 37-year high. Manufacturers are not only having to make up for lost ground due to COVID, they’re also grappling with a talent shortage that’s plagued the industry for years. There simply aren’t enough skilled workers to fill the job openings in the industry.
The biggest challenge is the skills gap.
In the 2020 Deloitte Global Human Capital Trends Study, 75% of industrial organizations said reskilling the workforce was important or very important for their success over the next year. But only 10% said they were very ready to address this trend. The pandemic has only exacerbated this challenge.
Currently, manufacturers are experiencing a drastic shortage of entry-level and middle-skilled workers. But the larger, looming challenge is the continued digital transformation within the industry. The skills needed to perform manufacturing jobs today will look much different than the skills needed in five to ten years. Manufacturers are not alone. Retailers like Levi’s and Verizon are retaining their workforce, transforming cashiers into coders, to keep up with the digital demands of a post-pandemic, e-commerce environment.
Workforce diversity is imperative to helping close the gap.
In Maryland, I have seen firsthand how small steps can make a big impact. As a result of participating in DEI education programming, one company I work with reviewed their job descriptions and identified biases in phrases and qualifications prohibiting them from attracting and hiring non-traditional candidates. After discussing the realities of today’s skills requirements they determined not every position required a college degree, and technical certificates were just as valuable in some roles.
Of equal importance is the need to expose more students to tomorrow’s career opportunities. Teachers play a critical role in breaking barriers many young people have to accessing the job opportunities that exist across industries. To see more diverse representation in manufacturing, we need to build a diverse talent pipeline long before college. Teacher externships are a proven way to do this. By placing teachers in hands-on work externships they can identify the hard and soft skills needed for the workforce in their current students and help them turn those skills into a viable living wage career using apprenticeships as a first step up.
Manufacturing can take the lead.
During times of disruption, people are prone to making changes in their life and setting new goals. I believe some of what we’re seeing in the jobs report can be attributed to this. It’s not that people don’t want to go back to work. It’s that they don’t want to go back to the same job. Manufacturing has an opportunity to seize on this and capture individuals recently displaced by other industries. And if they want to add on-site childcare, they can make even larger hiring gains. The education and workforce systems should partner on this.
Manufacturing is a great place for someone who was previously in a “low-skill” job to change gears, gain new skills and build a career that has lifetime mobility. There are more training funds available for manufacturers to train new employees from the federal government (ARPA) than ever before. This is a win-win for everyone. States should incentivize both the employer and employee with tax incentives to take matters into their own hands and create new futures full of productivity and stability.