#61 – Inside Our Industry – Skilled Labor Shortage Threatens Manufacturing’s Full Recovery

Posted on | Inside Our Industry

Filling the labor gap for manufacturing is an on-going concern. Every week new articles are posted outlining the problems that manufacturers are facing due to the lack of available skilled labor. This study from the Workforce Institute of UKG has some disturbing findings.

The Skilled Labor Shortage Threatens Manufacturing’s Full Recovery, Says Study
Adrienne Selko  |  IndustryWeek.com  |  JUL 14, 2021

While more than half, 54%, of manufacturers have achieved year-over-year growth, despite combatting the pandemic, workforce issues have escalated.”  The Resilience of Manufacturing: Strengthening people operations and bridging the talent gap amid crisis,” a study from the Workforce Institute at UKG based on a survey of more than 300 hiring decision-makers representing a mix of U.S.-only manufacturers (65%) and multinational manufacturers with a strong U.S. presence (35%), found that finding talent with the right skills has been more difficult. Before the pandemic, 38% of manufacturers faced this issue and today that number has increased to 54%.

What are the reasons behind the problems finding skilled workers?
There are a number of reasons including:

* Employees aren’t just calling out of scheduled shifts on short notice — many are actually “ghosting” their employer by skipping a scheduled shift with zero notice.
* Between January and March 2021, more than two in three manufacturers (68%) let employees go due to poor attendance, and 13% said managers had to adjust labor schedules every day to account for unplanned absences.
* Turnover is up 15% over the prior year: Nearly three in five manufacturers (59%) experienced “higher-than-average” turnover from March 2020 to March 2021, compared with 44% from March 2019 to March 2020. Among multinationals, 71% said turnover was up during the first year of the pandemic vs. 52% of U.S.-only manufacturers.

…we can’t pinpoint exactly why these attendance issues happened, but it seems likely that pandemic-related obligations or concerns were a common cause given that frontline employees faced extraordinary personal challenges over the past year, such as enhanced childcare or remote schooling responsibilities, which would have likely impacted their ability to come to work on time or at all. Of course, some manufacturers with more people-centric cultures and policies offered their frontline team members more flexibility to address personal concerns, but this was not unilaterally the case.

We also have to keep in mind that attendance issues were commonplace in manufacturing even before the pandemic. When we surveyed manufacturers in March 2020, more than half said employee lateness (61%), short-staffed shifts (58%), and last-minute call-outs (55%) were all regular occurrences in the 12 months prior to COVID.

What this tells us is that attendance issues, which will presumably continue to impact manufacturing into the post-COVID era, demand a long-term solution — especially in light of the national labor shortage, wherein the decision to let a skilled employee go cannot be made lightly.

The report goes on to review recruiting challenges, alternative talent pools, production deadline issues, and future trends.


Full Study