As most U.S. manufacturers look to regain momentum in the wake of the global economic crisis, they face some well-documented challenges — starting with talent. For many, this isn’t news. For years, manufacturers have reported a significant gap between the talent they need to keep growing their business, and what they can actually find. So Deloitte and the Manufacturing Institute recently commissioned a survey to dig deeper into this stubborn trend, asking U.S. manufacturing leaders questions such as

•Whatimpactistheskillsgaphavingoncompanyperformance?

•Howisitevolvinginthefaceofcontinuedeconomicandcompetitive challenges?

•Whichmanufacturingjobsarebeingaffectedthemost?•Whatdoesthefutureoftalentlooklike?Whattrendsare

manufacturers preparing for today — and how?

Shaky ground?How can U.S. manufacturers access the skills and talent they need?

83 51%

%

%

%%

29

80

48

Skilled production workers can have the biggest impact on performance. And that’s where most manufacturers have encountered their biggest challenges.

WHO’S NEEDED MOST?

Unskilled production

23%

Productionsupport

42%

Skilled production

74%

A snapshot of the manufacturing skills gapSHAKY GROUND? Real Analytics

As U.S. manufacturers gear up for the next wave of even tougher global competition, they face a stubborn talent dilemma. They can’t find the talent they need, where it matters most—even in the face of high unemployment. And as the skills requirements change along with the industry, they can be at risk of falling even further behind on the talent front. Here’s a look at a few of the key trends fueling this important issue.

During the next three to five years surveyed manufacturers anticipate hiring challenges in many workforce segments, but skilled production tops the list. Here is a breakdown of the top three segments and the percentage of responding manufacturers that chose them:

TALENT CRUNCH

Skilled productionMachinists, craft workers, distributors, technicians

Production supportIndustrial/manufacturing engineers, planners

Scientists and design engineers

The nature of manufacturing work itself is changing quickly, making it hard for talent to keep up. Redesigned production lines are one of the biggest changes.

MOVING TARGET

Redesigned/streamlined production lines Increased use of

automation

Source: Deloitte and The Manufacturing Institute. "Unwavering Commitment: The Public’s View of the Manufacturing Industry Today," (September 2011).Copyright © 2012 Deloitte Development LLC, All rights reserved.

A look at our results turns up some surprising insights into the talent gap and how surveyed manufacturers are responding.Herearesomehighlightsinadditiontothoseincluded in the accompanying graphic that should be of interest to anyone whose business is affected by the fortunes of U.S. manufacturers.1

Among the hardest jobs to fill are those that have the biggest impact on performance.Shortagesinskilledproductionjobssuchasmachinists,operators, craft workers, distributors, technicians, and more are taking their toll on manufacturers’ ability to expand operations, drive innovation, and improve productivity. Seventy-four percent of respondents indicated that workforce shortages or skills deficiencies in skilled production roles are having a significant impact on their ability to expand operations or improve productivity. Unfortunately,thesejobsrequirethemosttrainingandaretraditionallyamongthehardestjobstofindexistingtalentto fill.

High unemployment isn’t making things any easier.There’s no way around it: respondents report, on median, that5percentoftheirjobsremainunfilledsimplybecausethey can’t find people with the right skills. Translated to rawnumbers,thismeansthatasmanyas600,000jobsare going unfilled — a remarkable fact when the country is facing an unemployment rate that hovers around 9 percent.2 Respondents report that the national education curriculum is not producing workers with the basic skills they need.

Manufacturing work is changing so quickly that it’s harder for talent to keep up.Over the past five years, most manufacturers have redesigned and streamlined their production lines while implementing more process automation. In short, as the industry has changed, the nature of work that it requires

1 Deloitte and The Manufacturing Institute. "Unwavering Commitment: The Public’s View of the Manufacturing Industry Today," (September 2011)2 http://www.bls.gov/

is changing as well. And it’s happening fast, which leaves manufacturers expecting more from their employees. Unfortunately, respondents report that the number one skills deficiency among their current employees is in the area of problem-solving skills, making it difficult for current employees to adapt to changing needs.

What’s next for U.S. manufacturers? The skills gap is an issue that has reached the boiling point for manufacturers — and the same old approaches aren’t enough to close it. Manufacturers should pursue more creative approaches to recruitment and talent management to make sure they have the skilled personnel they need to win in the future. The same goes for developing existing talent — new performance tools and formal processes can have a big role to play in any talent management plan.

The industry will need help from private-public collaborators, and educational institutions as well. Students need a clear path for attaining the required skills and training to prepare for a career in manufacturing. That’s easier said than done in an industry environment that is evolving faster than at any point since its beginning.

Whiledaunting,thesechallengesaresurmountable.TheU.S. has one of the largest, strongest manufacturing industries in the world, and has demonstrated an ability to innovate and adapt time after time. Now it’s time to flex those muscles.

For more information, please contact: Thomas MorrisonPrincipalDeloitte Consulting LLP+1 215 246 2449thomorrison@deloitte.com

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