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Workforce Uncertainty Interferes With Manufacturers’ Digitalization Plans

Manufacturers struggle to fill open positions, but potential workers fear the jobs are subject to being replaced by new technologies. By objectively examining the facts, companies can discover actionable advice on how to overcome this roadblock.

As the manufacturing industry gears up for digital transformation, one lingering obstacle continues to cause setbacks: workforce uncertainty. Manufacturers struggle to fill open positions, especially in IT fields. Smart technologies, like Artificial Intelligence (AI) and robotics, can ease the burden, but also perpetuate the issue.

Potential workers fear manufacturing jobs are subject to being replaced by technology. Yet, these new technologies require skilled workers who can understand their potential and deploy them.

By objectively examining the facts, companies can discover actionable advice on how to overcome this roadblock.    

Why the shortage?

The manufacturing skills gap has been a hot topic since 2010 when experts realized Baby Boomers were retiring at a rate of 10,000 per day, leaving many manufacturing jobs vacant. Deloitte and the Manufacturing Instituteconducted a study  indicating nearly 3.5 million manufacturing jobs would need to be filled by 2025--and at least 2 million of those were likely to remain unfilled due to lack of qualified applicants. 

The lack of Science, Technology, Engineering, and Math (STEM) majors was identified as a problem, triggering the launch of several education initiatives. Additionally, industry-wide image campaigns, like Manufacturing Day, tried to add luster to the tarnished manufacturing image, holding in-plant open houses and flooding the media with stories of exciting careers in high-tech. And yet, manufacturing jobs are still vacant, especially in IT and highly technical areas such as Artificial Intelligence (AI) and Business Intelligence (BI) 

Is technology eliminating jobs? Or low-cost competition?

If  manufacturing jobs are unfilled, why is the plight of the American manufacturing worker so prevalent? Bringing jobs back to American manufacturing even ranked as a top campaign issue. Manufacturing employment is an emotional topic, one that tugs at the heartstrings—and for good reasons. 

According to the Bureau of Labor Statistics, the United States lost 5 million manufacturing jobs between January 2000 and December 2014. The recession, trade deficits, outsourcing, price-gouging competition, and automation were among the factors blamed. 

No matter what political intervention evolves, automation will continue to impact jobs. A recent report predicts that automation could replace 800 million jobs worldwideby 2030. In the US alone, it is estimated 39-73 million jobs stand to be automated, a third of the total workforce. 

Yet, automation will also create new jobs. Existing roles will be redefined, and workers with technology skills will be in high demand. 

Where exactly are the gaps?

Manufacturers need skilled workers. That does not just mean engineers, R&D technicians or C-level veterans who can take over as Chief Digital Officers, but also middle-managers, programmers, and technicians. Nearly every role in manufacturing today requires technology competency.

A recent survey conducted by Constellation Researchexamined how manufacturers plan to staff up and develop applications using AI functionality. The results of the report indicate the severity of the skilled worker shortage and the potential roadblock to adopting digital technologies. 

Most respondents (80 percent) said they do not possess the human capital necessary to implement AI projects. Only 14 percent of executives said their current staff is sufficient. And, 40 percent reported needing to make significant talent acquisitions.

How are manufacturers attempting to find the needed talent? Most (72 percent) of respondents are trying to acquire new talent via traditional recruiting methods. Some organizations are opting to re-skill their own candidates by conducting training (60 percent) and supporting peer networking (50 percent). 

Actionable advice

These industry issues—and statistics—show that this a critical topic for manufacturers. They must adopt digital technologies, and a skills shortage cannot block progress. Educating the next generation of data scientists will take time. Now, manufacturers must make commitments to recruiting and reskilling existing workers, the ones who are at risk of being displaced if they do not upskill.  This still leaves an immediate demand for skilled workers—those who have IT skills and manufacturing expertise and can help organizations execute innovation. Here is how to manage the issue: 

  • Take advantage of the Gig Economy: According to HR Dive, in less than 10 years, 60 percent of the workforce will not be looking for full-time work, but will be “experts for hire.” Consider hiring short-term experts.
  • Turn to third party vendors: Companies do not need to develop new technology in-house. Take advantage of software vendors with proven solutions and extensive teams in place.
  • Leverage cloud deployment: Cloud computing is one of the most important tactics manufacturers can use to stay modern and agile. Do not waste resources on setting up hardware, servers, back-up processes, or data recovery or security.
  • Collaborate: You don’t have to go it alone. The digital era is also the era of collaboration, co-manufacturing, partnering on projects and working with software suppliers who hold the technical expertise you need.
  • Employ talent science: Take advantage of modern Human Capital Management (HCM) technology to optimize your current workforce, leverage and nurture talent, and align personnel to the positions where they contribute the most.
  • Appeal to millennials: Millennials expects software that is highly flexible, attractive, and easy-to-use, like the consumer-devices they are accustomed to. They also expect remote connectivity and self-service features, like the ability to run their own reports and create dashboards. If you want to recruit from this demographic, you need to provide the tools they demand.
  • Embrace technology: Above all, the top management must help set a company culture that embraces technology. When workers learn they will be working beside robots and smart machines, they can focus on the creative problem-solving and innovation skills that only humans can deliver. 

Parting thoughts

When workers resist—or fear—smart technology, everyone loses. Instead, the modern workforce should embrace technology and focus on building relationships with customers and colleagues. Workers can draw insight from advanced smart machines--and apply it to product innovation. Manufacturers need people to help them to deploy the ideas—whether the internal workforce or “borrowed” expertise from contractors and vendors. A technology-supported workforce is the answer to meeting modern demands.

Nick Castellina is Director of Industry and Solution Strategy at Infor.

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