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American factories are in desperate need of workers.  It’s a trillion dollar problem


Even though manufacturing activity in the United States hit a 37-year high in March, the industry has over half a million job openings. Factories struggle to find skilled workers for specialized roles such as welders and machinists. Manufacturers even struggle to hire entry-level positions that don’t require expertise.

No less than 2.1 million manufacturing jobs will be vacant until 2030, according to a study released Tuesday by Deloitte and The Manufacturing Institute. The report warns that the labor shortage will hurt incomes, production and could ultimately cost the US economy up to $ 1 trillion by 2030.

“It is deeply concerning that at a time when jobs are in such demand across the country, the number of vacancies in the manufacturing sector continues to grow,” said Paul Wellener, vice president and US head of products. industry and construction at Deloitte, in a press release. declaration.

“ Sounding distress signal ”

Manufacturers say it’s 36% harder to find talent today than in 2018 – even though the unemployment rate is much higher today, according to the report. More than three-quarters of manufacturing executives (77%) surveyed said they expected to have difficulty attracting and retaining workers this year and beyond.

“Throughout discussions with leaders during this year’s study, a resounding signal of distress has been repeated over and over again: ‘We cannot find the people to do the job,’ the report says. .

For example, the demand for HVAC systems is very high in North America as businesses reopen and people modernize their homes. Still, air conditioner maker Carrier is struggling to find workers to help meet this demand by building new systems.

“It’s a difficult environment to hire at the moment. We have to try hard, ”Carrier CEO David Gitlin told CNN Business last week.

Ultimately, the labor shortage could act as a drag on the growth of the industry – and that of the economy as a whole.

“Robots do not take over”

Manufacturing executives say part of the problem is many young Americans just don’t want to work in factories, in part because of fears robots will take over and jobs being shipped overseas. .

“We have a perception problem. People don’t know the jobs are here or that these are the jobs they want,” Carolyn Lee, executive director of the Manufacturing Institute, told CNN Business. The institute is the non-profit workforce development partner of the National Association of Manufacturers, a powerful industry trade group.

“People think it’s a stationary, slow-growing, low-knowledge industry. And that’s not the case, ”Lee said.

American factories are in desperate need of workers.  It’s a trillion dollar problem

The Deloitte report states that despite an influx of 2.7 million industrial robots in use around the world, humans are still needed to produce the vast amount of goods.

“The robots don’t take over,” Lee said. “A robot can pick up a box and move it around, but a person can be creative and anticipate what’s going to happen.”

Still, some robotics startups are looking to capitalize on the shortage of skilled workers.

Path Robotics, a Columbus, Ohio-based startup, claims to have designed the world’s first truly autonomous robotic welding system. The startup on Monday announced funding of $ 56 million to fuel its expansion.

“Path Robotics solves a complex and critical problem in our country by bridging the gap between the supply of skilled welders and the demand,” said Lee Fixel, founder of Addition, a venture capital firm that led the round of financing, in a press release.

Amazon competition

Even though millions of Americans remain out of work as the pandemic continues, the Deloitte report states that “many manufacturers cannot fill” entry-level production associate positions that do not require knowledge- do technical and pay well above the federal minimum wage of $ 7.25 an hour. .

These positions – including assemblers, production assistants and hand tool cutters – only require a “basic level of ‘human capabilities’ such as following instructions, willingness to learn and follow,” according to the report. In theory, they could be filled by people laid off in the hotel or restaurant sectors as well as by high school graduates.

Part of the struggle is that manufacturers face stiff competition for entry-level warehouse and fulfillment center talent that is fueling the e-commerce boom spearheaded by brands like Amazon and Chewy.

Wellener, the head of Deloitte, said the rise in warehousing jobs is exacerbating problems for manufacturers, even though those careers may offer fewer long-term opportunities.

“These jobs are stabilizing. A person in a warehouse will level off in terms of their ability to develop and develop their skills,” he said.

Diversity is essential

But the labor shortage isn’t just about the Amazon effect.

Manufacturers also struggle to fill intermediate skill jobs that require some level of technical training or applied skills. These jobs include CNC machinists, welders and maintenance technicians and often require training, licensing or certification.

American factories are in desperate need of workers.  It’s a trillion dollar problem

At the same time, the Deloitte study found that one in four women are considering leaving the manufacturing industry – a situation that could amplify the industry’s diversity problems. Even though women make up nearly half of the U.S. workforce, less than a third of manufacturing professionals are women, according to the report.

The report makes several recommendations on how manufacturers can better attract talent, including launching recruitment efforts in high schools, considering flexible hours to help balance work / life, and linking leadership performance to measures of diversity, equity and inclusion.

To rebuild their talent portfolio, Lee said manufacturers need to proactively reach out to more diverse groups.

“Manufacturing has always been older, whiter and more masculine,” said Lee, who herself comes from a manufacturing family. “It’s mathematically impossible for us to be competitive in the future without having a more diverse workforce in the future.”

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