{"id":46004,"date":"2022-12-09T15:54:23","date_gmt":"2022-12-09T20:54:23","guid":{"rendered":"https:\/\/www.arffinancial.com\/development\/?p=46004"},"modified":"2025-01-03T11:38:53","modified_gmt":"2025-01-03T16:38:53","slug":"whats-causing-the-labor-shortage-in-manufacturing","status":"publish","type":"post","link":"https:\/\/www.arffinancial.com\/development\/whats-causing-the-labor-shortage-in-manufacturing\/","title":{"rendered":"What\u2019s Causing the Labor Shortage in Manufacturing?"},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row][vc_column][vc_single_image image=&#8221;46007&#8243; img_size=&#8221;full&#8221; alignment=&#8221;center&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]With <a href=\"https:\/\/www.ibisworld.com\/industry-statistics\/employment\/manufacturing-united-states\/\" class=\"broken_link\">over 16 million employees<\/a> in the United States manufacturing industry as of 2022, it might be difficult to fathom there\u2019s actually a labor shortage. During the pandemic, 1.4 million manufacturing jobs were lost\u2013which effectively <a href=\"https:\/\/www2.deloitte.com\/us\/en\/insights\/industry\/manufacturing\/manufacturing-industry-diversity.html\">erased nearly a decade of gains<\/a> made in manufacturing employment. Many of those jobs were able to be recovered, however there is still a deficit of 500,000 open positions that stubbornly remain unfilled. What is the root cause of this labor shortage? That\u2019s what we\u2019re here to shed some light on.\r\n\r\n<strong>Getting Entry-Level Talent Through the Door<\/strong><strong>\u00a0<\/strong>\r\n\r\nEntry-level jobs in the manufacturing industry are inclusive of production associate positions that don\u2019t necessarily require any type of industry knowledge or advanced training. Think of assembly line workers or hand-held tool cutters. The folks best suited for these roles are great at the basics of human strengths: following directions, being eager to learn, and asking questions. Since the pandemic, a lot of these entry-level roles have been filled by folks who used to work in industries significantly impacted by COVID-19, such as retail and restaurant services. The <a href=\"https:\/\/www.payscale.com\/research\/US\/Job=Manufacturing_Worker\/Hourly_Rate\">starting pay<\/a> is nearly twice as high as the federal minimum wage, and with no experience required outside of a high school diploma, it would seem filling these roles would be a cake walk\u2013but that\u2019s not the case. Some predictions are that younger workers are being lured into other lucrative industries such as the technology and healthcare sectors. And the Baby Boomer generation, once a stronghold in the manufacturing industry, is ready to retire; there is reason to suggest that <a href=\"https:\/\/hbkcpa.com\/labor-shortages-in-the-manufacturing-sector\/\">22 percent of the qualified manufacturing workforce<\/a> will be retired by the year 2025. There just don\u2019t seem to be enough willing job seekers out there to mitigate the mass exodus of those retirees.\r\n\r\n<strong>Getting Mid-Level Talent Through the Door<\/strong><strong>\u00a0<\/strong>\r\n\r\nMiddle-skill workers in the manufacturing industry are another elusive group hindering the ability to fill empty positions. Jobs such as welders, maintenance techs, and <a href=\"https:\/\/www.goodwin.edu\/glossary\/cnc-machinist\">computer numerical control (CNC) machinists<\/a> require some type of technical training or skillset that can\u2019t be accommodated by someone fresh out of high school. It can take months to years in a hands-on training program to become certified in these spaces. To fill these critical roles, companies will also need to uncover new ways to train tomorrow\u2019s workers.\r\n\r\n<strong>Staying On-Par with Technology<\/strong><strong>\u00a0<\/strong>\r\n\r\nWe\u2019ve all heard the phrase that robots are going to take all of our jobs. Sure, robots can lift and pack boxes, but they can never replace the decision making and critical thinking skills that humans possess. Even still, there is a technology transformation happening in the manufacturing space that we need to focus our efforts on getting ahead of. As we progress technologically, the skills needed to complete manufacturing tasks will also have to keep up. According to <a href=\"https:\/\/www2.deloitte.com\/us\/en\/insights\/industry\/manufacturing\/manufacturing-industry-diversity.html\">Deloitte<\/a>, \u201cwithout making changes to the skills composition of the workforce, manufacturers could leave up to 2.1 million jobs unfilled between 2020 and 2030, impacting everything from productivity to innovation and competitiveness to GDP.\u201d\r\n\r\n<strong>A Shaky Reputation<\/strong>\r\n\r\nAnother one of the issues affecting the manufacturing sector seems to be negative PR. Younger generations tend to view manufacturing jobs as dangerous, hot, labor-intensive, and low-paying. In short, they have a terrible reputation. Companies need to do better at communicating the benefits of working in the manufacturing industry, highlighting what sets them apart from the overall negative perception so many younger folks have. Many companies today have a robust diversity, equity, and inclusion strategy; boast competitive pay and benefits; and offer countless training opportunities to advance a workers\u2019 skillset without additional schooling. Career growth is something else a lot of new job hunters are desperately seeking\u2013which isn\u2019t necessarily something an entry-level candidate will be offered in other industries outside the manufacturing sector. To fill these open roles, it\u2019s critical that manufacturing industry leaders highlight what the people <em>really <\/em>need, and how their company fills that need.\r\n\r\n<strong>What Can Business Owners Do to Improve the Situation?<\/strong><strong>\u00a0<\/strong>\r\n\r\nWe\u2019ve touched on the top reasons <em>why <\/em>there is a labor shortage in manufacturing, but what are some solutions that business owners can adopt to improve the situation? First off, shift your marketing and recruiting strategies to focus on how manufacturing is a great career choice for younger generations. Research what the current perception of the industry is and how your business can position it differently. You can also partner with your local community colleges, technical high schools, and vocational programs to learn about their curricula, and make sure they\u2019re aware of the top skills you\u2019re looking for in candidates. And consider taking it a step further by sponsoring scholarships or grants to these programs.\r\n\r\nInvesting in your employees is a strategy every business owner should be hyper-focused on. It\u2019s cheaper to grow your existing staff than it is to continually hire\/lay off employees. That being said, small investments in career development can have a big-time payoff. An <a href=\"https:\/\/www.arffinancial.com\/development\/loans-by-product\/revolving-line-of-credit\/?urlsource=blog\">interest-only revolving line of credit<\/a> from ARF Financial presents business owners with the flexibility to access capital while keeping their cash flow stable. It\u2019s a unique product that puts you in complete control: You get to decide <em>when <\/em>to borrow, <em>how much <\/em>to borrow, <em>what size <\/em>your payments should be, and <em>how long <\/em>you want to keep the loan. Use the funds to provide employees with advanced training opportunities, workshops, and certifications.\r\n\r\nIndustries across the board have faced and overcome challenges no one saw coming pre-pandemic. If we can identify the issues within the manufacturing sector and focus our efforts on reshaping the industry, we\u2019ll eventually end up with a robust workforce. Progress takes time\u2013and right now, it\u2019s all hands on deck.\r\n\r\n&nbsp;\r\n\r\n\r\n\r\n<span style=\"font-size: 12px; line-height: 15px;\">Your privacy is important to us. ARF Financial will never sell or rent your information to any third party.\u00a0<a href=\"https:\/\/www.arffinancial.com\/development\/privacy\/?utm_source=Outbrain&amp;utm_medium=OutbrainBlog&amp;utm_term=Outbrain&amp;utm_content=GoingGreen&amp;utm_campaign=GoingGreen\">Click here<\/a>\u00a0for more information about our privacy policy.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<!-- \/wp:post-content --><\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;46007&#8243; img_size=&#8221;full&#8221; alignment=&#8221;center&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]With over 16 million employees in the&#8230;<\/p>\n","protected":false},"author":5,"featured_media":46007,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","om_disable_all_campaigns":false,"footnotes":""},"categories":[913,868],"tags":[398,402,400,399,443,386,535,1036,220,213,1034,870,872,1033,877,1032,1035,944,943,224,222,172,1027,142],"class_list":{"0":"post-46004","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-operations-employee-management","8":"category-manufacturing-financing","9":"tag-affordable-business-loans","10":"tag-affordable-small-business-growth","11":"tag-business-expansion","12":"tag-business-growth","13":"tag-business-line-of-credit","14":"tag-business-loans","15":"tag-equipment-leasing","16":"tag-financing-for-manufacturers","17":"tag-flex-pay-loans","18":"tag-line-of-credit","19":"tag-manufacturing-brown-field-projects","20":"tag-manufacturing-business-loans","21":"tag-manufacturing-expansion","22":"tag-manufacturing-green-field-projects","23":"tag-manufacturing-line-of-credit","24":"tag-manufacturing-loans","25":"tag-manufacturing-revolving-line-of-credit","26":"tag-marketing","27":"tag-operations","28":"tag-small-business-financing","29":"tag-small-business-funding","30":"tag-small-business-growth","31":"tag-whats-causing-the-labor-shortage-in-manufacturing","32":"tag-working-capital"},"acf":[],"yoast_head":"<!-- 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