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Global Workforce Shortage: A Challenge or an Opportunity?

Posted by Julia Walsh on Nov 3, 2022 11:22:00 AM

Even before the pandemic hit, manufacturers were struggling to fill vacant positions globally. Several factors contributed to this workforce shortage: skill gaps, the perception of low wages, lack of interest in manufacturing, lack of diversity, and an aging skilled workforce. Then the pandemic added the additional stress of demand-triggered layoffs in some sectors and excess work in others, leading to mental health and safety concerns, which added to manufacturers’ woes.

The global workforce shortage is predicted to worsen by 2030, and millions of jobs could go unfilled. This seems like a real challenge, but Webalo sees it as an opportunity for manufacturers. Taking the right steps today can mitigate workforce-related challenges in the future and help create a hybrid workforce capable of tackling both technological advancements and market uncertainty.

But first, let us develop a clear picture of the factors driving the workforce shortage and then examine how connected worker platforms can help address it.

Understanding the Global Workforce Shortage:

In a post, Randstad explains that even before the pandemic, a report in 2018 claimed that as many as eight million manufacturing jobs could go unfilled by 2030. The pandemic only added more complexity for manufacturers dealing with this already massive ordeal. In order to overcome these challenges, it is important to understand the drivers behind these shortages.

The COVID-19 Pandemic- As global supply chains were disrupted during the early stages of the pandemic, a lack of stability developed, with some plants fully closed and others operating at a barebones capacity. The stress faced by workers at work and at home caused a rise in mental health concerns, and a study showed an 86% increase in burnout due to the effects of the pandemic in 2020. Enhanced safety protocols meant work reconfiguration, and that too was a contributor to attrition. Workers wanted more flexibility, but remote work isn’t an option in manufacturing. Unless hybrid work environments are created that equip workers with more options regarding working hours, mobility, and career progression, the worker shortage will most likely continue to plague the manufacturing industry.

Wage Increases- Salaries are extremely important to workers; Randstad explains that 62% of workers believe it to be the primary reason for leaving or accepting a job. Inflation, coupled with this demand for higher wages is pushing manufacturers to revisit their wage policies. Manufacturers will need to up their game and meet or exceed industry standards to attract and retain talent. Creating a workplace that provides opportunities for workers to earn more based on performance and improved digital and operational capabilities might be something manufacturers need to consider. 

Negative Perception- While most people agree that manufacturing is extremely important to the economy, Randstad states that one in three American parents admitted they would not encourage their children to take up manufacturing jobs. This negative perception exists because people believe manufacturing jobs are low paying, take long hours, and involve a greater amount of physical work than jobs in other industries. Furthermore, the younger generation of potential workers believes strongly that their work needs to have meaning beyond being a means to earn a living. Lack of career growth and the fear of being stuck in the same job for decades also deter people from joining manufacturing. In order to get people through the door at entry levels, manufacturing companies need to change this perception by showing potential employees how their products positively impact society, how manufacturing jobs can be more about analytical skills and digital capabilities, and how good performance can lead to faster career progress than in other sectors.

Diversity Gap- Women make up less than 30% of the entire manufacturing workforce. This lack of gender equality hurts manufacturers and shrinks the talent pool from which they can choose workers. It is extremely critical that manufacturers even these numbers out by creating jobs that allow women to actively pursue careers in manufacturing. Tools that have decreased the amount of hard manual labor involved like robots, co-bots, and automation, and the digital tools that enable their operation, should be marketed to women alongside other factors that will motivate them to join the sector.

Aging Workforce- 20% of manufacturing workers in the U.K. and 25% of manufacturing workers in the U.S. are above the age of 55. Worsening the situation is the fact that the pandemic caused many experienced older workers to take early retirement due to safety concerns. Along with them went their tribal knowledge and skills. Manufacturers need to quickly develop viable mentorship and apprenticeship programs that would allow the remaining experienced workers to pass on their knowledge to younger workers. They also need to employ digital tools and platforms to capture and retain tribal knowledge so that it can be formalized into training modules for new recruits.

Technology Woes- Advancements in manufacturing technology, with widespread automation, the adoption of robotics, and the induction of 3D printing, have eliminated many manual labor jobs. However, at the same time, these advancements have created jobs that require a larger digital skill set. Per Randstad, this skill gap is the reason for at least ten million vacant jobs in the manufacturing industry today.. Companies need to devise reskilling and upskilling programs for existing workers, employ digital tools that are easy to configure and use, and provide new workers with the ability to learn on the go and acquire requisite skills safely and without compromising production quality.        

Webalo Insights:

An infographic from Deloitte explains the perceived opportunity costs of the workforce shortage and the skill gap that exists as it is seen by the manufacturers surveyed. Everything from meeting desired customer service levels to increasing revenue is more challenging without the requisite workforce in place. Clearly, not having enough skilled workers can be a challenge, unless the problem is addressed and turned into an opportunity for frontline workforce digitization, which helps create a central Workforce Intelligence Center and leads to an optimized process across the value chain.

Figure 1- Source: Deloitte

Turning Challenge into Opportunity- Manufacturers must choose the right digital tools to address problems related to the aging older workforce and the unskilled newer workforce. While creating a diverse workforce is dependent on several factors like demographics and type of work, creating a better-trained, digital, and mobile workforce that relies on facts and intelligence for decision-making is entirely possible through the implementation of digital platforms.

Manufacturers need to choose a platform that not only digitizes forms and workflows but is also intuitive and easy to use, where workers can design their own apps, configure their own dashboards with important KPIs, and capture their tribal knowledge on the platform for the training of newer team members. Such a platform uses existing mobile devices either owned by workers or provided by the company to help augment their work and capture previously lost process data.

Customized training modules befitting a worker’s skill set can be created through such a platform, and this would mean faster deployment of fresh employees on the shop floor. It is critical that manufacturing leaders understand the relevance and need for workforce digitization platforms to fully leverage the capex made in automation and robotics. Such a platform transforms an entire operation and creates an intelligent workforce, taking companies through a journey that begins with the simple digitization of forms and activities and ends with complete end-to-end digitization of the entire process.

With an aging workforce and new workers lacking the necessary digital and operational skills, manufacturers will need to create what we call a “hybrid” working environment. Such an environment uses digital platforms as tools to capture tribal knowledge, implement AR, and train new workers on the job, adding to and augmenting their existing skill sets. With the right platform, what seems like a challenge can become an opportunity to create a more viable workforce that is ready and trained for the future!