Talent gap in manufacturing relies on basic supply and demand

January 15, 2013

U.S. manufacturers have long been aware that there will come a time when there will be a so-called talent gap, as an aging workforce retires and younger workers decide to pursue other careers. According to a recent report by the Manufacturing Institute, that time could already be here, with apparently 600,000 U.S. manufacturing jobs currently unfilled.

However, some analysts believe these figures don’t reflect the true state of the industry, and the fact of the matter is that there are other factors in play that will allow manufacturers to proceed at their own pace, as opposed to rushing around in a blind panic. The logical solution to the conundrum of an apparent lack of skilled workers lies in how companies have positioned themselves to deal with this long-foreseen problem, with lean enterprise principles at its core.

According to Bloomberg, the answer is basic supply-and-demand economics. Harold Zirkin, a senior analyst with the Boston Consulting Group believes that if there were significant shortages of workers, then companies would be offering higher wages to attract staff, pointing out that the hourly wage for a manufacturing employee has barely moved in almost three years, peaking at $24 in July of last year.

Zirkin assumes that the figures provided by the Manufacturing Institute don’t take into account a number of other considerations. The U.S. economy has been on a gradual path to recovery for some time but there is no doubt that it still has some way to go, and in a “slow” economy, companies only hire what or who they need. This is a longstanding practice among manufacturers and means that the actual number of vacant positions is much lower than the figures suggest.

Even when demand increases, most manufacturers would prefer to offer existing employees overtime as opposed to bringing in new blood who may not have the same commitment to quality management in manufacturing as those already in place. This gives them the flexibility to deal with the natural ebb and flow of supply and demand, a reasonable business strategy in an uncertain world.

Finally, workers don’t just walk into a manufacturing plant or assembly line and just start working. They need to be trained, and even experienced workers need the time to bed in and get used to the demands of the job. A number of companies were forced to cut back on their training programs when the economic downturn first hit, and it appears that many of them have not reinstated them as yet, hence another discrepancy in the true number of jobs available.