In December 2023, Deloitte and The Manufacturing Institute launched their sixth comprehensive manufacturing talent study in over two decades. This extensive research involved an online survey of more than 200 US manufacturers, interviews with over 10 senior executives across various manufacturing sectors, and a detailed analysis of secondary labor supply and demand data. Supported by Deloitte’s economics team, the study aimed to assess the potential economic impacts of job vacancies and provided an in-depth review of manufacturing job trends and growth patterns, examining over 80 companies’ annual reports and investor presentations. Below are some of the highlights.

Resurgence in US Manufacturing

Manufacturing in the United States has seen a resurgence, with employment surpassing pre-pandemic levels to reach close to 13 million as of January 2024. This revival is driven by substantial investments in infrastructure, clean technology, and semiconductor manufacturing, spurred by government initiatives such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act. These projects represent over $430 billion in investments and the promise of more than 234,000 new jobs. The manufacturing landscape is booming, but this growth brings with it a pressing need for a skilled workforce to sustain the momentum.

Workforce Challenges: Skills and Applicant Gap

Alongside this potential growth, the study identified a continuing critical issue: a significant gap not only in skills but also in the number of applicants for open positions in manufacturing. This shortfall is so severe that up to 1.9 million manufacturing jobs could remain unfilled by 2033, posing a substantial threat to industry growth. Manufacturers need workers of every type, from entry-level associates to skilled engineers, and the skill requirements are increasingly diverse, spanning technical, digital, and soft skills. Over 65% of respondents in the National Association of Manufacturers’ outlook survey indicated that attracting and retaining talent is their primary business challenge, a sentiment echoed since the fourth quarter of 2017. Factors contributing to this include demographic trends such as declining population growth and increased retirements, elevated turnover rates, and shifting workforce expectations among millennials and Generation Z.

The Skills Evolution

As the industry edges closer to Industry 4.0, the demand for higher-level skills is escalating. Manufacturers are increasingly seeking employees who possess not only traditional manufacturing skills but also digital competencies and soft skills. The study highlights a 75% increase in demand for simulation and software skills, critical for roles in technology-enabled production and testing. Moreover, soft skills such as critical thinking and problem-solving are becoming just as vital as technical skills, driven by the need to adapt to rapid technological changes and complex global supply chains.

Innovative Workforce Strategies

To address these challenges, manufacturers are adopting innovative workforce strategies. Flexibility in work arrangements, competitive benefits, and robust training programs are becoming standard as companies strive to attract and retain talent. For example, some manufacturers are offering more flexible shifts, remote work options, and enhanced training programs to meet workers’ changing expectations and lifestyles, which have shifted significantly since the pandemic.

Educational Trends and Industry Credentials

Educational trends indicate a gap in training that could exacerbate the skills shortage. While the number of bachelor’s degrees awarded has increased, the number of associate degrees—which tend to prepare graduates for high-skill trades—has remained stagnant. However, the number of certificates awarded, essential for foundational and occupational-specific training, has seen a notable increase, suggesting a shift towards more specialized and accessible forms of education. These credentials are crucial as stakeholders align educational outcomes with industry needs, ensuring that graduates are immediately employable and possess skills that are directly applicable in the workplace.

The Ecosystem Approach to Upskilling

The study underscores the effectiveness of a regional ecosystem approach in building a skilled workforce. Manufacturers are not only investing in internal training but are also actively participating in partnerships that broaden the talent pipeline. These partnerships often involve technical colleges and universities and focus on aligning curricula with the needs of the industry to ensure students are graduating with relevant, in-demand skills. Scalability and sustainability are still an issue across many regional programs.

Looking Ahead

As the US manufacturing sector continues to grow, the integration of advanced technologies and the development of a skilled workforce are paramount. The insights from the 2024 Deloitte and The Manufacturing Institute Talent Study provide a clear roadmap for manufacturers seeking to capitalize on current opportunities and overcome future challenges. By investing in people as much as technology, manufacturers can ensure a resilient, innovative, and sustainable future. Check out the full findings in the link below.

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