What Has Led to the Manufacturing Labor Shortage?

In the early days of automation production technology was often associated with the replacement of workers. Robots could do a lot of repetitive work for less money, and there was no dispute with the economy. Today everything is exactly the opposite. We have a shortage of manpower in production that has no end in sight, which has forced many organizations to accelerate investment in automation technology to help improve the productivity of their existing staff.

Today, technology has taken on a new role – to make people more productive. The digital transformation now is to extend the benefits of technology to every employee at every level of the enterprise.

There is only one problem: these employees are becoming increasingly difficult to find.

Today, hundreds of thousands of jobs around the world remain unfilled. Companies are even trying to take high-paying entry-level jobs. Last year, according to a study by Deloitte and The Manufacturing Institute, the industry had a record number of vacancies, and not all because of the pandemic.

Moreover, things will get worse. The National Association of Producers estimates that by 2030, 2.1 million manufacturing jobs may remain unfilled. These vacancies will have significant economic impact and could cost the industry $ 1 trillion or more.

Just at a time when manufacturers with digital transformation are ready to deliver the extraordinary productivity and efficiency of their employees, they can’t find enough people.

What causes labor shortages in production?

Part of the problem is finding people with the right skills. But it is also how production jobs are viewed by the population. According to Carolyn Lee, executive director of The Manufacturing Institute, many people are either unaware that such vacancies exist or consider production a dead end. “Some just don’t see the point of a production career,” she says. In a world ruled by technology, production seems old school.

Of course, the reality is just the opposite. Manufacturing is a high-tech frontier in the application of automation, artificial intelligence, machine learning, digital collaboration and augmented reality, and these are just a few examples. As Lee says, “Modern manufacturing careers are becoming more and more high-tech, high-skilled and high-paying”. And they depend, she notes, on “indispensable human skills – such as creativity, critical thinking, design, innovation, engineering and finance.”

Indeed, some production jobs are still being replaced by automation. Someday cars in warehouses will become the norm, although vehicles driven remotely by people equipped with augmented reality (AR) are now a proven alternative. In some industries it is possible to produce without light. But in a world of complex manufacturing most people are not very interchangeable.

What can be done?

If technology once took away people’s jobs, now it may be the key to their return. The work in the production company is not the same as before. Today, it can become a cutting-edge technological experience. Those vendors who invest in modern systems, web applications, and high-scale architectures should be able to use that fact to attract and retain employees.

One obvious example is the ability to work remotely. It was a trend towards a pandemic and it is only accelerating. A company with a digital transformation can support a wide range of remote workers – staff who can increasingly work anywhere. They can be scientists, office managers, engineers, technicians or even equipment operators who are anywhere in the world with an internet connection.

Opportunities also go beyond remote work. For example, VR (virtual reality) can be used as a learning tool to develop skills for new employees or those who want to advance. Managers and executives can use the latest AI (artificial intelligence) technology to help make decisions and perform operations in real time. AR (augmented reality), like smart glasses, can be used by factory workers to improve their work experience and increase efficiency. Research shows that 40 percent of organizations by 2023 have some way to combine physical experience with virtual technology.

Many analysts are starting to talk about the emergence of a common industry ecosystem where human experience will be available online as needed, something like Uber for manufacturing jobs.

Each of these factors can help overcome labor shortages in production. Undoubtedly, future innovations that we cannot anticipate will also be part of the solution.

Back to the future

The digital transformation continues, and there is a lot of uncertainty ahead. However, one thing is clear: the industrial workplace is being radically transformed, and companies need to return to basics to recruit and retain employees. The Deloitte study recommends reaching out to communities and schools to raise awareness and “use cutting-edge technology to enhance digital ownership”.

Digital transformation is no longer just about streamlining operations and increasing efficiency and sustainability. These things are still important. But now there is another reason for the digital transformation: to attract, retain and empower people at all levels. Now and in the future, an enterprise’s ability to build human capital may depend on how successfully it has embraced – and promoted – its digital transformation.

Tom Hennessy is the Director of Marketing at iBASEt. He brings more than 25 years of corporate software marketing experience and business development experience to the executive management team. He is responsible for the strategic growth of the company. Tom holds an MBA from the University of Southern California and holds a bachelor’s degree in management from Northeastern University.

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