Can Millennials Solve the Manufacturing Labor Shortage?

Apr 06, 2017

The Manufacturing Labor Shortage

As of 2011, 11 million Americans worked in the manufacturing sector, and 2.7 million (or 25%) were 55 years of age or older and expected to retire in the near future (Masslive). This group represents a significant number of skilled workforce that industry is about to lose. Manufacturers can do the following things:

  1. Replace the skilled workforce of baby boomers with the incoming generation and invest time to train to the level required
  2. Outsource the work to offshore or onshore operations, or contract personnel through an external agency
  3. Adopt new technologies where applicable to compensate the skills gap and labor shortage

Are Millennials the Future of Manufacturing Labor?

Labor costs in foreign markets are on the rise, which has many operators reconsidering if they will reshore their operation. This said, there are a variety of challenges associated with bringing plants back to North America, spanning rising labor costs here at home as well as a labor shortage. As mentioned, the baby-boomers will soon be retiring. So who is left to do the work? 

Deloitte predicts that nearly 2 million manufacturing jobs will not be filled by 2025. The most significant contributor to labor shortage in manufacturing is the lack of interest from the incoming generation - the millennials.

New Labor: The Millennial Mindset

53.5 million millennials are in the workforce today, but they consider manufacturing jobs boring or outdated. With images of early conveyors or machining equipment highlighted in media and pop-culture, it's easy to understand how their perspective has been left with a dated impression. What they have neglected to realize, however, is that the manufacturing sector has become an incredibly advanced industry - leveraging burgeoning technologies in big data, 3D printing, mobile computing, even self-driving vehicle technology. Their pre-conceived notions have left them with little understanding of how these technologies and processes drive modern manufacturing operations. 

In addition to their lack of understanding, millennials prefer to work in environments that offer flexible hours and unique office culture, such as wireless open-concept desks and foosball in the lunch room (something baby-boomers would not have considered in their time). They also prefer high value jobs over high paying jobs, which is another unfortunate dilemma for manufacturers that prioritize maintaining competitive salaries.

What is the solution to the labor shortage?

The cost of labor worldwide and the growing challenges associated with labor shortage are rapidly impacting industry. Leaders must reconsider current operations, the value of personnel, how to address the skills gap, and if technology will compensate tasks and unlock new solutions to the labor cost and labor shortage problem. The millennial dilemma is a contributing factor influenced from the reshoring movement in manufacturing. Learn more in the free ebook below. 

reshoring operations to america

By Meghan Hennessey