Manufacturing’s Labor Shortage

Since the pandemic, the number of open jobs in the manufacturing industry has exceeded the number of available workers. We all know this. The question is how to fix the worker shortage, or even just how to react to the new shape of the labor market as interest rates fluctuate and companies find it difficult to both find enough workers and provide the better pay they’re demanding.

According to the bureau of labor statistics, the unemployment rate now matches pre-pandemic levels. And yet the number of job openings and the number of available workers are still at odds. The quit rate spurred by the great resignation saw so many U.S. workers leaving low-wage jobs for companies with perks like remote work or childcare of full-coverage health care, that last year manufacturing struggled to replace retiring baby boomers with new workers. It’s enough to make an economist’s head spin.

Initiatives to Fix the Labor Shortage Demand Innovation

In this labor market, manufacturing companies need to evolve so that labor shortage does not lead to a shortage of profit or innovation.

Here to talk about this today is David Mantey. David Mantey has been covering the design, engineering, and manufacturing industries for over 15 years. He is the editorial director of the publishing company that owns Industrial Equipment News, and he hosts the Today in Manufacturing Podcast, which discusses the biggest manufacturing stories and their impact on the industry. I’m glad to have him on our show today. Welcome David Mantey to the Manufacturing Insights Podcast.

David Mantey: Thank you very much for having me. I’m really excited about it.

Leah Archibald: You’ve been reporting on manufacturing for at least 15 years and you’ve seen a lot of changes in the economy as well as demographic changes in the job market. So put this current moment into context for us. Where are we now in terms of the labor supply, compared to where we’ve been in the past?

Today’s Worker Shortage is Unique

David Mantey: Honestly, I just think we’re at a transitional phase that is unlike anything that we’ve seen with different technological leaps previously. And what’s crazy is that I don’t think it was necessarily unforeseen. The labor shortage is something that has been predicted for many years, and people have been trying to combat it with minimal success. I think part of the problem is that we’re trying to engineer ourselves out of the worker shortage, but we’re coming to the realization that we can’t automate everything.

When it comes to finding new workers, I think a big part of an innovative solution is stressing the importance of getting the right businesses to engage a younger generation. We recently started a new podcast series called Gen Z in Manufacturing. It’s two people from completely outside of the manufacturing industry that were going to school, and the only reason they heard about manufacturing was because their mentor said, “Hey, the skill you’re learning about process optimization is needed direly in manufacturing.”

New jobs in manufacturing were just never on their radar. I think that it was really telling to me. Because we’ve had initiatives to promote manufacturing to younger workers. We’ve had robotics. We’ve had LEGO Mindstorms. We’ve been engaging students since they were in kindergarten for years, thinking that that was going to solve the problem, but it honestly hasn’t. It’s still just a sliver of people entering the job market and choosing manufacturing. We’re just not seeing that mass appeal. And people don’t realize that their skillset translates to a successful and enjoyable career in manufacturing.

Improving The Pipeline of Available Workers Post-Pandemic

Leah Archibald: So the labor shortage in manufacturing is a pipeline issue. That’s surprising. I thought you were going to say, “This is just like the normal cycle of booms and busts. We are going to come out of this worker shortage like we have in the past — with innovation.” But you’re saying no, it really is the pipeline of labor where there aren’t enough available workers at one end of the pipe.

David Mantey: I think it’s both. I do think we will find a way to innovate ourselves out of this. But a big problem right now is trying to figure out what to do in our current state. We have something like three quarters of a million welders that we’re going to need in a couple of years. We’re talking about huge gaps in the labor industry.

There are a lot of things that we’re seeing anecdotally that people are having success with. One of the things is showing how manufacturing is a cool place to work. This is actually kind of tragic, that the stereotype of manufacturing as the dirty job that your dad comes home from and can’t come into the house until he showers still persists today. Manufacturing today is an entirely different environment. And I think a big part of boosting the labor force participation rate in manufacturing is getting people exposed to these manufacturing jobs that can be great careers.

Leah Archibald: So how do we apply technology to make manufacturing appealing? There are technologies that make manufacturing more productive. But there are also storytelling technologies that can rehabilitate the image of manufacturing to match what the job market in manufacturing is today — very intricate and skilled and and cutting-edge.

David Mantey: There are a lot of companies out there that are doing a great job telling their story. For example: We’re a family business that’s on a fourth generation. Or: We’re a tech-savvy business that is at the forefront of innovation, and we want you to come and work with the greatest tools at your disposal to make a component that’s going to bring us to Mars, or that’s going to make a component on the fastest EV ever created. Or just to make a component to make sure that the ice maker on the fridge never breaks down, which it always does. For businesses, storytelling — letting people know what value you add to the world and the impact that you make — I think that makes it appealing to workers.

Leah Archibald: So there are a couple prescriptions that we talked about today to solve the labor shortage.

Initiatives to Attract New Workers

1. Make manufacturing jobs more appealing for new workers. Especially younger workers. There is storytelling messaging that we need to get right, to show that open jobs in manufacturing are good jobs.
2. Add manufacturing automation. Implement technology to drive process improvements so that any uptick in the quit rate is neutralized with gains in productivity.
3. Ask your employees. Ask them what they want. Ask them what they’re looking for. Ask them how they could do their job better. Create an open dialogue where people feel confident sharing ideas and safe to share criticisms. This way, you foster an environment where everyone starts to thrive.

Leah Archibald: For large organizations, it’s a challenge to think about collaborating with their workers in a less hierarchical way. How can you bring new practices into mature organizations in a way that excites people?

David Mantey: It’s like any new technology. You don’t have to bite off the whole thing at first. And honestly, we’ve seen more people fail when they try to do too much too fast when it comes to a new process improvement platform, or a new technology. If you try to go too big too fast, a lot of times you can fall down. So just try to find something, find a vulnerability, find one thing that you want to improve in your business and address it.

Leah Archibald: David Mantey, thank you so much for joining me on the podcast today. It’s been a pleasure.

David Mantey: Thank you for having me. I really appreciate it.