Industrial Sector Must Solve a Talent Gap Long in the Making

In the Industrials sector, today’s talent gap is the inevitable result of years’ worth of actions taken (or not taken) by really smart business leaders. In surveying our Industrials World of Work 2024 Outlook, I feel we are seeing many of the same problems we have discussed with clients for decades.

Nearly 80% of employers are struggling to find the skilled talent they need; a third of their workers are approaching retirement, with replacements nowhere to be found; women continue to be an undervalued resource in the sector.

CHROs and other leaders are frustrated. Worse, most of them admit they don’t have a clear solution in their sights. Although leaders are chipping away at the problem with what resources they have, manufacturers are still not proficient when it comes to strategic workforce planning. They’ve got an unaddressed branding problem; they don’t really know how to assess talent to understand if they can take the journey with them; and managing upskilling at scale is a challenge.

Abundance to scarcity
When you look at the issue at a high level, it comes down to a mindset problem. For a century or more, businesses in this sector believed—correctly!—that workers would continuously approach them, filling the pipeline and then some. They developed an abundance mindset, particularly when it came to filling the lower two or three tiers of jobs—the positions requiring fewer skills and less training.

As far back as 2006, we knew change was coming. Demography moves slowly but predictably, and the aging of the workforce was no secret. Manufacturers were increasingly competing with Transportation & Logistics, Energy & Utilities, Food Service, Retail, and even Healthcare to fill jobs at those entry-level tiers. And because talent assessment and up- and reskilling were not prioritized, workers couldn’t see a path forward; manufacturers weren’t shopping in their own closet.

In short, the sector needed to switch from a mindset of abundance to one of scarcity. And much as I hate to say it, progress has come slowly.

Change is Accelerating
This will not be an easy nut to crack for leaders throughout the manufacturing sector. It has been hit by three big waves, one right after the other: automation, digitization, and now sustainability. These major shifts are in various stages on maturity, of course, but they’ve all required major workforce adjustments by manufacturers.

Many large employers candidly admit to me that they’re siloed, with the business strategy not connected to the workforce strategy up, down, and across the business. As a result, most are not able to quickly adapt their strategic workforce planning to quickly adapt to the changing external business environment.

How now?
So far, we have painted a grim picture, but now it’s time to look ahead. Yes, many manufacturers have painted themselves into a hiring corner. However, many are beginning to apply their lean production mindset to their future strategic workforce planning. Several small but agile manufacturers are leading the way.

For example, a food manufacturing client we work with was ahead of its time in talent assessment; years ago, it implemented a process analyzing workers’ technical ability and their ability to learn and adapt. The company knew what its entry-level workers had the potential to do in four to five years and customized career paths accordingly in line with their plant technology adoption timeline. Today, that company is far ahead of competitors not only in retention, but in overall corporate culture.

Some manufacturers claim worker loyalty is dead. I understand why it looks that way to them, but it’s simply not true. There are employers proving this every day. The key is to switch out of abundance mode into scarcity mode. Sell yourself. Tell prospects and workers what the company will do for them. Create a compelling employer value proposition. Indeed, customize this EVP for individual workers.

A bit of marketing and communications focus can help here. Examine your internal communications and ask if they are consistently reinforcing your EVP. Investigate if your key messages are really making it to the site level where many of your employees will not have corporate computers connected to your intranet. Next look externally at your recruitment marketing campaigns. How are they performing? Are they cost-effective? In some cases, it may make sense to leverage recruitment marketing services including those offered by Manpower if you do not have internal expertise.

Time to rebrand
One hiring hurdle that can be addressed with relative ease is the sector’s image problem. A makeover is needed, as our report notes: “Manufacturing suffers from an image problem among many workers who still perceive it as too dirty, dangerous, and physically demanding even as automation is making it safer than ever before.” The report adds that the problem is especially acute with women, who now make up nearly half the overall workforce—but less than a third of that in manufacturing.

The green and youth revolutions also factor into this image problem. Our research consistently shows that younger workers seek employers with a mission they can believe in. The Industrials sector has embraced sustainability in a big way, but has not done a good job educating consumers (including the talent pool) about it. Manufacturers should learn a lesson from Energy & Utilities, which has rebranded itself as an environmentally conscious sector providing needed energy while exploring sustainable options.

The manufacturing sector is the backbone of the modern world’s prosperity. It’s filled with deeply respected brands with innovative leaders. Most were first trained as engineers who are no stranger to solving complex production or design challenges. The future is bright as we continue to partner with them to develop more innovative strategic workforce solutions.