What led to the labor shortage in the manufacturing sector?


In the early days of automation, manufacturing technology was often about replacing workers. Robots could do many repetitive tasks faster for less money, and there was no debate with economics. Today, the exact opposite is true. We have an endless manufacturing labor shortage in sight, which has prompted many organizations to accelerate their investments in automation technologies to help amplify the performance of their existing workforce.

Today, technology has taken on a new role – that of making people more productive. Digital transformation is now about extending the benefits of technology to every employee, at every level of the business.

There is only one problem: these employees are becoming difficult to find.

Today, hundreds of thousands of manufacturing jobs go unfilled around the world. Companies are even struggling to fill entry-level, high-paying production jobs. Last year, according to a Research study by Deloitte and The Manufacturing Institute, the industry saw a record number of job postings, and not all of them due to the pandemic.

Besides, things will get worse. The National Association of Manufacturers predicts that 2.1 million manufacturing jobs could remain unfilled by 2030. These unfilled jobs will have a significant economic impact and could cost the industry $1 trillion or more.

Just when digitally transformed manufacturers are ready to enable extraordinary employee productivity and efficiency, they can’t find enough staff.

What is causing this labor shortage in the manufacturing sector?

Part of the problem is finding people with the right skills. But it’s also how manufacturing jobs are viewed by the public. According to Carolyn Lee, executive director of The manufacturing institute, many people are unaware of the existence of these jobs or view manufacturing as a dead end. “Some people just don’t see the point” of a career in manufacturing, she says. In a world ruled by technology, manufacturing feels old school.

Of course, the reality is quite the opposite. Manufacturing is a high-tech frontier in the application of automation, artificial intelligence, machine learning, digital collaboration, and augmented reality, to name a few examples. As Lee puts it, “Careers in modern manufacturing are increasingly about high tech, high skills, and high salaries.” And they depend, she notes, on “irreplaceable human skills — things like creativity, critical thinking, design, innovation, engineering and finance.”

Indeed, some manufacturing jobs are still being replaced by automation. Autonomous vehicles in warehouses may one day become the norm, although human-driven vehicles equipped with augmented reality (AR) remotely are a proven alternative at present. In some areas of industry, “lightless” manufacturing is a possibility. But in the world of complex manufacturing, most people aren’t very replaceable.

What can be done?

If technology once took manufacturing jobs away from people, now it may be the key to bringing them back. Working in a manufacturing company is not like before. Today, it can be a cutting-edge technological experience. Manufacturers investing in modern systems, web applications, and highly scalable architectures should be able to leverage this fact to attract and retain employees.

Providing the ability to work remotely is an obvious example. It was a trend before the pandemic, and it has only accelerated. A digitally transformed business can support a wide range of remote workers – staff that increasingly can work anywhere. They can be knowledge workers, office managers, engineers, technicians, or even equipment operators located anywhere in the world with an internet connection.

The opportunities also go far beyond remote work. For example, VR (virtual reality) can be used as a training tool to develop the skills of new workers or those who wish to progress. Managers and executives can use the latest AI (artificial intelligence) technology to help make decisions and execute operations in real time. AR (augmented reality), like smart glasses, can be used by factory workers to improve their work experience and increase their efficiency. Research suggests that 40% of organizations will combine physical work experience with virtual technology in some way by 2023.

Many analysts are beginning to speak of the emergence of a shared industrial ecosystem where human expertise will be available online when needed, something like Uber for manufacturing jobs.

Each of these factors can help overcome labor shortages in the manufacturing sector. There is no doubt that future innovation that we cannot predict will also be part of the solution.

Back to the future

Digital transformation is a work in progress and there is a lot of uncertainty ahead. However, one thing is clear: the manufacturing workplace is changing dramatically and companies must go back to basics to recruit and retain their employees. Deloitte’s study recommends reaching out to communities and schools to raise awareness and “leverage advanced technologies to increase digital fluency.”

Digital transformation is no longer just about streamlining operations and improving efficiency and resilience. These things still matter. But now there is another reason to digitally transform: to attract, retain and empower people at all levels. Today and in the future, a company’s ability to develop its human capital may very well depend on how successfully it has embraced and promoted its digital transformation.

is the marketing director of iBASEt. He brings over 25 years of enterprise software marketing and business development experience to the leadership team. He is responsible for the strategic growth of the company. Tom received his MBA from the University of Southern California and holds a BS in Management from Northeastern University.

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