- THE MAGAZINE
- WEB EXCLUSIVES
The national survey polled 1,123 manufacturing company executives recently and found that 5% of all current manufacturing jobs are unfilled due to a lack of qualified applicants.
It showed that 67% of manufacturers have a moderate to severe shortage of available, qualified employees, said Craig Giffi, vice chairman and consumer and industrial products industry leader for Deloitte LLP.
"Moreover, 56% anticipate the shortage to increase in the next three to five years," Giffi said.
The unfilled jobs are mainly in the skilled production area; positions such as machinists, craft workers and technicians, according to the survey.
"Ironically, even as unemployment numbers remain bleak, a talent shortage threatens the future effectiveness of the American manufacturing industry," Giffi said.
Manufacturing accounts for about 12% of the U.S. economy. In September, industrial production increased on higher demand for automobiles and computers, a sign that manufacturers are contributing to growth, according to a report Monday from the Federal Reserve.
Companies like General Motors and Alcoa are getting a lift as Japan recovers from this year's earthquake and tsunami, and as demand from emerging markets and business investment boosts orders.
"You can't scare America into recession right now," David Kelly, chief market strategist at JPMorgan Funds in New York, said.
But some companies are not bidding for projects because they lack skilled manpower to do the work, according to Wisconsin Manufacturers & Commerce.
It's the "jobs paradox," said WMC President and CEO Kurt Bauer.
"We have high unemployment, yet companies can't find the skilled help they need," he said.
Some blame manufacturers for turning people off to a career in the field, saying companies that once delayed layoffs for as long as possible now cut their payrolls at every opportunity.
Some publicly traded manufacturers have reduced their rank-and-file workforce at the very hint of a softening in markets, or they cut U.S. jobs if they can get the work done cheaper overseas.
But the skilled worker shortage is a global issue, said Tim Hanley, vice chairman and U.S. process and industrial products sector leader for Deloitte & Touche in Milwaukee.
"There's a critical shortage of the right skills at the right place," Hanley said in an interview from Sao Paulo, Brazil. It's one of the top five issues for many companies, he added.
The trend dates back before the recession, as companies streamlined production lines and implemented more automation. The skills that people needed to do their jobs had to change as well.
"Manufacturers obviously want to fill these roles by tapping the currently available workforce. However, they report that the No. 1 skills deficiency among their current employees is in the area of problem solving, making it difficult for current employees to adapt to changing needs," said Emily DeRocco, president of The Manufacturing Institute.
For now, some companies are filling skilled positions by taking talent from competitors.
"I don't want to say 'thank goodness other businesses are closing,' but thank goodness it creates a labor pool for us," said Diane Bluel, human resources manager at Ariens Co., in Brillion.
Ariens also works with Brillion High School and Fox Valley Technical College to develop talent.
"We do things to grow some of the skill sets internally," Bluel said.
Long term, companies and schools need to do a better job of recruiting people into skilled trades or the skills gap will worsen.
"This is something that is going to hound us for a long time," said Dorothy Walker, an interim dean at Milwaukee Area Technical College.
"Our job now is to prepare people for careers, not jobs. So if you lose your job in one area, there ought to be a career pathway that leads to another facet of manufacturing," Walker said.