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Manufacturing Skilled Labor Shortage: Attracting Millennials and Gen Z

U.S. manufacturers are facing a critical skilled labor shortage. Explore powerful recruitment strategies proven to attract and retain young workers.

The Skilled Labor Shortage: Strategies for Attracting Millennials and Gen Z to American Manufacturing Jobs

How can employers make careers in manufacturing more appealing? What tools can they use to drive recruitment? Despite handsome pay rates for those with the required skills and technical literacy, many in the labor market remain under the misconception that manufacturing careers do not offer stability or a competitive salary. Manufacturing businesses that make targeted and intelligent investments in resource development stand the strongest chance of overcoming the critical skilled labor shortage.

Like many industries, American manufacturing is currently struggling to navigate a protracted skilled labor shortage. Covid-19 is of course a contributing factor: as several variants surged in 2021, new-hire rates in U.S. manufacturing fell more than 25% below projections.

Yet, the issues run much deeper than Covid-19. At its core, the problem lays in a shortage of skilled labor. Businesses are having trouble finding candidates with proficiencies that suit the increasingly high-tech sector. Despite handsome pay rates for those with the required skills and technical literacy, many in the labor market remain under the misconception that manufacturing careers do not offer stability or a competitive salary.

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As a result, employers are wondering what more they can do to challenge these misbeliefs and attract more young people. How can employers make careers in manufacturing more appealing? What tools can they use to drive recruitment?

Skilled Labor Shortages and Inflation in the Manufacturing Industry

Experts generally expect the manufacturing industry’s skilled labor shortages to worsen throughout 2022 and potentially beyond. According to the Institute for Supply Management’s (ISM) Winter 2022 Semiannual Economic Forecast, more than 80% of U.S. manufacturing companies recently reported difficulties finding workers to fill job vacancies. A further 43% said they increased their pay rates in a bid to attract new employees and retain existing ones.

Covid-19 continues to function as a major immediate cause of the manufacturing industry’s skilled labor shortage. In early 2022, many manufacturing companies reported high levels of absenteeism due to Covid-19 infections among their workers. This caused production slowdowns in some cases. Some industry observers fear the next variant could spread to suppliers, threatening to worsen the supply chain issues—crippling the economy. In an already inflationary economic environment, these combined factors stand to drive major cost increases for manufacturing companies. Such a situation would likely worsen the industry’s skilled labor shortage as businesses struggle to find the money to pay competitive wages while inflation erodes what little financial wiggle room they have.

Skilled Labor

At the same time, blaming everything on Covid-19 overlooks important dynamics that were driving labor shortages prior to 2020. The consensus view is that Covid-19 and its supply chain and labor market impacts only accelerated a trend that was already well underway.

In addition to public misconceptions about the long-term prospects of manufacturing careers, automation and the impacts of international trade agreements were already eroding the perceived viability of manufacturing jobs.

The situation doesn’t seem to have a comfortable ending in sight soon, either. Some labor market analysts believe manufacturing companies will face increasing pressure in the form of organized labor action in the coming years.

Though manufacturing workplace fatalities have generally followed a declining trend since the mid-2000s, the sector still sees over 4,000 fatal accidents per year. Additional health concerns related to ambient air quality in manufacturing facilities, as well as temperature extremes, chemical exposures, slip-and-fall accidents, and the dangers posed by both industrial machinery and unsafe work practices. Unions may use ongoing critical skilled labor shortages as leverage to pressure businesses on these and other issues.

According to a 2021 assessment from Deloitte, the industry’s skills gap could leave as many as 2.1 million manufacturing jobs unfilled by 2030. Deloitte estimates this ongoing skilled labor shortage could cost the U.S. economy as much as $1 trillion in lost productivity. Ongoing labor challenges could also impede U.S. manufacturing companies’ ability to expand or invest in emerging technologies that improve productivity rates and workplace safety—exacerbating the cycle. Effective solutions are critically needed, and experts believe attracting more younger workers is key.

Strategies to Attract Millennials and Gen Z to Your Manufacturing Business

In addition to the current situational factors, the manufacturing industry’s need to appeal to younger workers lies in a simple analysis of the sector’s demographics. The present generation of manufacturing workers is aging rapidly toward retirement. It is an obvious fact that as workers age out of the workforce, businesses need to source younger labor as replacements.

The good news is, manufacturing businesses have a number of tools at their disposal, which they should leverage to the fullest possible degree. It’s time to tap into promotional strategies such as vocational school outreach programs, social media recruitment, and enhanced mentorship and training initiatives to expand your outreach.

Partner with Academic and Vocational Institutions to Have Access to Young Talent Pools

Companies that form partnerships with vocational schools gain access to a large and renewable source of emerging talent that can bridge shortages long-term. These relationship-building efforts can begin at the high school level and continue into postsecondary education. Businesses should reach out to career counselors and program administrators at these institutions, describing the changing nature of needed qualifications and skills and offering to participate in curriculum development.

Another potential strategy is to create internship and apprenticeship programs that draw on student bases at local schools. These provide hands-on training opportunities and school-to-job pipelines that can help companies meet their labor needs.

To boost success in these areas experts suggest that companies find ways to add value to their work environments. Younger workers tend to attach significant weight to benefits like scheduling flexibility and professional development opportunities (think continuing education, licensing, and certification). Meeting younger workers needs in these areas can give businesses an edge over competitors with regards to attracting and retaining talent. Considering the critical state of skilled labor, the financial investment in flexible scheduling platforms and educational resources can be well worth the return.

Skilled Labor

Leverage the Power of Social Media to Engage with Millennial and Gen Z Workers

Millennials and Generation Z are tech-savvy digital natives who have grown up in an internet-connected world. As such, using social media as a marketing, branding, and recruitment tool can help businesses appear more relevant. The idea is to reach these prospective recruits where they are. Not only does this widen the access pool, but it also makes you, as an employer, appear in touch with their concerns.

Businesses can leverage social media to tell their story on their terms. By advertising competitive pay rates and benefits packages, you can craft an appealing image of what manufacturing careers can look like. Boasting benefits such as paid education opportunities, or flexible options for parents with childcare needs may also be another effective message within social media marketing. Running job ads on these channels also allows you to directly recruit workers—rather than moving through third parties.

Social media marketing can generate strong returns for relatively low-cost investments. Experts suggest drawing on a range of targeted social media strategies. Center your advertising on these key objectives:

  • Show how the company directly benefits employees seeking personal and professional development support
  • Explain the company’s unique sense of purpose and alignment with shared social values
  • Promote appealing aspects of working at the company, from high pay rates and rewards programs to continuing education opportunities
  • Share recruitment-oriented social media content with carefully targeted groups and communities
  • Debunk myths about “factory life”

Companies can use employee testimonials to speak directly to their targeted audiences. Building out referral programs that offer meaningful rewards to employees who leverage their own social media profiles and followers, can also help attract candidates.

Develop Mentorship and Training Programs for Effective Manufacturing Talent Transfer

Manufacturing businesses can address a skilled labor shortage by taking proactive steps to expand the scope of succession planning through formal mentorship programs.

Consider pairing new hires with mentors to help guide their integration and professional development. Mentors can be drawn from the ranks of established employees. This can ensure that the company’s labor pool stays resilient, well-trained, and responsive.

Robust training programs can also attract motivated applicants. Creating curriculum-guided training programs can accelerate onboarding rates and help new employees optimize their productivity. Manufacturing training programs deliver high-impact, carefully-targeted, on-the-job education that teaches the precise proficiencies new hires need to become successful. Companies willing and able to provide such in-house training and education can cast wider nets in their candidate searches. Instead of hunting for exclusively ready-made candidates, you can draw in more applicants by signaling that you’re willing to get them up to speed.

Skilled Labor

While some manufacturing businesses offer internships, technical apprenticeships have traditionally been more common in the industry. Apprenticeships function as paid training programs to develop specific skills. Apprentices study under assigned mentors and earn incremental pay increases as their proficiencies improve. Of course, these programs are a longer-term investment in individuals. In the manufacturing sector, they can take anywhere between 1-4 years to complete. However, apprenticeships also promise strong retention rates: some studies find that up to 92% of apprentices become full-time company employees! Therefore, they can serve as highly-effective ways to address and prevent labor shortages from impacting company operations.

Investing in Strategies to Attract Younger Workers to Overcome the Skilled Labor Shortage

Manufacturing businesses that make targeted and proactive investments in resource development stand the strongest chance of overcoming the critical skilled labor shortage. Knowing which programs to develop is half the battle. Finding the right partners help create these programs is the other half.

A financial partner with deep manufacturing industry experience, such as Minnesota Bank & Trust, can help you adequately forecast financial needs to build a robust labor recruitment and retention program. Connect with a Minnesota Bank & Trust commercial banker today to learn more.

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