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News for January 22, 2022

Expert: US Manufacturing Industry’s Slow Job Growth Reveals Its ‘Identity Crisis’

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The manufacturing industry’s employment growth declined again in December, with 26,000 new hires after a consensus estimate of 35,000, despite the overall unemployment rate during the pandemic of 3.9%.

According to a report, since the beginning of the pandemic, manufacturing firms have helped bring back 1.2 million jobs out of the 1.4 million lost jobs. This means, according to the Bureau of Labor Statistics, the industry employs 219,000 fewer individuals today than in February of 2020.

To make matters worse, the industry is growing quickly, and skilled workers are increasingly scarce.

In an interview, Paul Wellener, vice chairman of US Industrial Products and construction leader at Deloitte LLP, says that the manufacturing [industry] has an identity crisis.

“It’s not your father or mother’s dirty, dark and dangerous manufacturing anymore. It’s really a high-tech world out there with no jobs getting less technical,” Wellener said.

Consequently, Wellener explained, the manufacturing industry “really does have some challenges as it relates to employment and workers. The jobs are there, but the question is: Where are the people?”

Overall, a record 4.5 million Americans voluntarily quitting their workplace in November and vacancies totaling 10.562 million in the U.S., suggest a lingering struggle for employers across industries to keep talent and hire new workers.

In the meantime, the escalating demand for goods in 2021 has caused continual disruptions in supply chains and increased pressure on companies to find labor.

“The challenge for manufacturers I believe is to really make manufacturing attractive to the next generation to diverse populations that may not know about manufacturing as an opportunity,” Wellener said, adding that the situation is actually “an opportunity for manufacturers to continue to sell their business to the employee population out there.”

A recent study by Deloitte discovered that 38% of executives said that attracting new employees is their top goal for workforce production this year. The next priority is retention (31%) and the re-skilling process (13%).

“Number one, for manufacturers, they need to put their arms around their employees and hug them and tell them how great they are and help them get the skills that are needed for the next set of jobs here into the late 2020s and early 2030s,” Wellener said.

Last year’s Deloitte report discovered that as many as 2.1 million manufacturing jobs would not be filled by 2030. The report warned that the lack of workers will affect production, revenue, and ultimately, the US economy by as much as $1 trillion by 2030.

“We’ve gotta think about is how we prepare the workers that aren’t in manufacturing, whether it’s through apprentice programs or other kinds of programs,” Wellener said. “How do we prepare them for this technologically determined future?”

Manufacturing companies are also doubling down on investments in technology. According to the data from the Association for Manufacturing Technology, new orders of manufacturing technology totaled $571.5 million in October 2021.

This increase in domestic production results in higher demands for skilled workers in the U.S.

“That’s gonna be a continued trend,” Wellener said.

“It is gonna be bringing back jobs that are frankly more highly skilled, more technical, and there are gonna be jobs that are gonna be those well-paying long-term jobs that fit into our manufacturing society.” Wellener ended.

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