To build a manufacturing workforce for the future, go back to the basics

The manufacturing workforce challenge is immense as it is complex. There is not only a skills gap, but a gap in applicants for most open positions. Indeed, industry growth, particularly in the United States, is driving the need for more workers of every type — from entry-level associates to skilled production workers to engineers. Skill requirements are evolving and are spread between technical manufacturing skills, digital and AI skills, and soft skills. And if that’s not enough, talent acquisition and retention is fast becoming a business problem.

According to the National Association of Manufacturers’ (NAM) outlook survey for the first quarter of 2024, attracting and retaining talent was the primary business challenge indicated by over 65 percent of respondents.

Manufacturing is changing so fast (and along with it, the workforce challenges), it’s easy to get our heads turned by a new, shiny tool or technique. But as Gardner Carrick, chief program officer for The Manufacturing Institute, the non-profit affiliate of the National Association of Manufacturers, explains in this interview with Compass by Guild, HR leaders can garner impressive results simply by getting back to the basics of workforce transformation.

Q: Why has the manufacturing industry had such workforce challenges?

For a while, companies weren’t really prepared to support a significant growth in manufacturing, which is what we’ve seen and are going to see over the next period of time. So, it makes recruiting a challenge when you don’t have large-scale vocational or technical education programs at high schools purposefully introducing young people to careers in manufacturing.

“If you just isolate training and say, ‘Oh, we’re spending too much on training,’ you will almost certainly start losing employees. Then, suddenly, you have more recruiting costs.”

- Gardner Carrick, The Manufacturing Institute

And companies in manufacturing, like in most other sectors, don't have the large-scale training programs that they did 40 or 50 years ago, where everybody that got hired went into a training program for a while. So, part of what we’re doing now is rebuilding some of the infrastructure to support true workforce development — true pipelines of individuals into the careers, and true career pathways within manufacturing.

Q: What’s the current state of the manufacturing labor market right now? 

There’s a real worry right now about how we’re going to retain [workers]. Because turnover is costly. It is really difficult to hire right now. If you lose someone that’s a good cultural fit, it’s even harder. So how do you ensure that your employees want to stay with you? We’re seeing that we still have open jobs we need to fill, but we also recognize that we need to keep the employees we have, because it’s a bigger business cost when we continue to lose employees. It impacts morale, it impacts culture, it impacts everything. 

Q: What are the skills that manufacturing workers need most today?

There are the technical skills, of course, but you also have soft skills, though I prefer using the term professional skills or durable skills. How do you actually approach a problem here? Do you have a structured problem-solving methodology? Are you imbued in a culture of safety, where it isn’t just being trained on safety, but safety is actually a part of the mindset? Do you have a lean manufacturing mindset? Those are more about cultural elements and about the approach to the job rather than about training someone how to lay a weld. So it’s those kinds of cognitive skills that are very important across the organization if you’re going to have a well-functioning, efficient, and profitable enterprise.

Q: What are manufacturers doing to encourage workers to stay in an organization and show them that they have a career in manufacturing beyond an entry-level job?

There are a number of different routes here, and some of them the manufacturer itself will invest in. Some of them are seeing whether the employee invests in themselves or is willing to take the initiative with the support of the manufacturers. For example, we run an apprenticeship model called FAME, the Federation for Advanced Manufacturing Education. It’s primarily designed to serve students that have just graduated high school. But we are increasingly seeing companies willing to invest in, say, individuals who are operators or machinists who wish to make the jump into the maintenance technician or automation technician role. It’s a model where you identify those individuals that you think are best-suited to be able to take that next step into your technician role, and then supporting their skill development to be successful in that.

Company culture is a really important element for a lot of companies, and when you have someone who is a good fit for your culture, you want to keep them. To do that, you figure out ways in which you can invest in them in ways that meet their career goals. Living that culture starts with leadership, but it’s really maintained through the employees, and keeping that longer-term employee — and having your employee base see that there is a long-term future here — really helps to solidify that company culture.

Q: What’s your sense of how these kinds of programs are impacting the bottom line?

HR writ large — recruiting, hiring, turnover, training, culture — should be viewed in its entirety in this, because if you just isolate training and say, ‘Oh, we’re spending too much on training,’ you will almost certainly start losing employees. Then, suddenly, you have more recruiting costs. You have turnover costs here and vacancy costs here, which means you have to pay people overtime. 

In the end, [training] is key to maintaining the culture you want, keeping the employees you want, and recruiting new ones as needed to fill specific roles to maintain profitability and the company’s culture.

About Compass Staff

The Compass editors cover the most important trends impacting HR and people strategy today, translated into practical insights so you can put them to work. To receive exclusive content from Guild and our team of experts, sign up to receive the Compass newsletter.