Manufacturing sector solving skills shortage with training programs

September 10, 2014 - "Industry Insight"

September 04, 2014

A new survey by Accenture and The Manufacturing Institute finds a deficit in qualified manufacturing workers may result in a loss revenue for the industry. The report indicated 80 percent of manufacturing executives believe the manufacturing workforce shortage is "moderate" or  "severe," as the U.S. manufacturing sector has the potential to see finances losses up to 11 percent of their total annual revenue. While manufacturing companies are struggling to find skilled workers, they may want to prepare for future growth and make sure their staff have a sufficient amount of the necessary industrial equipment.

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Manufacturing firms' recruitment troubles are compounded by the fact that the majority of executives plan to expand production by 5 percent or more over the next five years, according to the Accenture report. The survey found 8 to 10 percent of skilled and highly-skilled positions are left vacant. Companies that do not fill these rolls could see effects in other areas of their business. 

If companies are unable to find qualified workers, they may be facing revenue losses because of increases in overtime pay, which is the case for more than 70 percent of survey respondents who said they saw rises in overtime costs by 5 percent or more. In addition to overtime, firms may also face downtime in production if they cannot find the labor needed to perform the work required. 

To achieve their production goals, companies will have to ramp up their recruiting efforts. The study indicated 60 percent of manufacturing executives were challenged in employing skilled labor. Firms may have to look to invest in training programs to get workers up to speed in production to solve the prevalent problem of labor shortages in the manufacturing industry.

"Given today's limited pool of relevant talent, companies may have to forget the notion of the perfect candidate," Matt Reilly, senior managing director of Accenture Strategy in North America, said in a statement. "Instead they should look for more generalist skills in candidates and develop them to match the specific work that needs to be done."

Manufacturers investing in training programs 
Companies in states like Kentucky have a growing need for skilled workers. To ensure the industry has enough supply of laborers, businesses, trade associations and educational institutions in the state are working together to help train the future members of the manufacturing workforce, according to The Lane Report.

For the Toyota North America's Advanced Manufacturing Technician (AMT) program, high school graduates in Kentucky learn about different aspects of working for Toyota. The auto manufacturer said 95 percent of the graduates of the AMT program - developed together between the Toyota North American Production Support Center in Georgetown, Kentucky, and Bluegrass Community and Technical College (BCTC) – then move on to become a full-time manufacturing worker for the company. 

These hands-on programs give students the chance to see what working on the factory floor is really like and prepares them for a manufacturing career. 

"The idea is that students learn the theory in the classroom on Tuesday and Wednesday and can immediately apply it at work on Thursday," said Carol Crawford, BCTC campus coordinator. "They make the connection between what they learn and what they do. They learn a lot faster that way."


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