Skills shortages threaten U.S. manufacturing

2005

A chronic shortage of qualified employees is making it increasingly difficult for U.S. manufacturers to compete in the global economy, according to a new report by the National Association of Manufacturers, the Manufacturing Institute and Deloitte Consulting.

More than eight out of 10 manufacturers said there were experiencing an overall shortage of qualified workers that cuts across industry sectors

The pain is most acute on the front line, with nine out of 10 firms complaining of a moderate to severe shortage of qualified skilled production employees such as machinists, operators, craft workers, distributors and technicians.

Engineers and scientists are also in short supply, with two-thirds of respondents reporting current deficiencies.

"The survey exposes a widening gap between the dwindling supply of skilled workers in America and the growing technical demands of the modern manufacturing workplace," explained NAM President John Engler.

"It is essential that America close this skills gap if we are to maintain our edge in the global marketplace and remain the world's leader in innovation.

"Clearly, the broadening skills gap in America calls for urgent action by both public and private stakeholders," he added.

"A highly skilled, innovative 'high performance' workforce is essential for our manufacturing sector to remain vibrant and to compete successfully in a global economy. If manufacturers are to remain competitive, the issues of education and training reform must be given at least as much attention as other top business concerns like trade, taxes, energy and regulatory reform."

But as the report highlights, skills shortfalls remain acute, with almost half (46 per cent) of employers reporting inadequate problem solving skills among employees and more than a third citing insufficient reading, writing and communications skills in the workplace.

"The talent shortage is not a theoretical or distant problem," said Deloitte's Richard Kleinert.

"Eighty-three percent of respondents indicated these shortages are currently affecting their ability to meet customer demands, with more than half reporting difficulty achieving necessary production levels and 43 percent reporting difficulties increasing productivity."

It is emerging as our nation's most pressing business issue

Manufacturing Institute President Jerry Jasinowski said that this human capital performance gap threatens America's ability to compete in the increasingly demanding global economy.

"It is emerging as our nation's most pressing business issue," he said. "Nearly three out of four manufacturers surveyed believe that a high performance workforce is the most important driver of future business success."

Yet with the top drivers of business success inextricably linked to employee quality and performance, the Jasinowski warned that employers faced big challenges attracting, retaining and motivating a high performance workforce in the face of unfavourable demographic and education trends.

"We need a bold agenda of shared responsibility between government, business and educators to increase the priority given to human capital, while improving the quality and performance of our education and training system," John Engler added.

"We also must update the image of modern manufacturing in the minds of young people, their parents and educators, and encourage more students to study math and science or follow a technical career path."

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