Commentary | IT Matters: Logistics & Supply Chain Technology

Manufacturing Skills Gap Calls for New Approaches to Talent Development

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David Smith is Senior Managing Director, Talent and Organization, Accenture Strategy, 860-756-2670
Russ Rasmus is Managing Director, Operations and Manufacturing, Accenture Strategy, 913-319-1181

As manufacturers seek to achieve growth, their search for the right talent to help them execute on their business strategy tends to be a challenging one. More than 75 percent of manufacturing respondents to Accenture’s 2014 Manufacturing Skills and Training Study identified a shortage of skilled workers. That gap also stands out in the so-called “middle skills” jobs – those requiring more than a high-school diploma, but less than a four-year college degree.

The data validated what many informed observers have noted for some time: The U.S. middle-skills ecosystem — employers, educators, and policymakers — is failing to match supply and demand, resulting in a lack of sufficient job candidates with the skills needed for today’s workplace. For manufacturers, engineering firms, and other skilled trades, labor positions are among the hardest to fill.

Research has found that a lack of relevant training and experience is a major impediment to filling positions. While candidates are missing specialized skills needed for manufacturing, they also lacked foundational skills, such as communication, collaboration, and problem solving. One-third of human resources executives in the Accenture survey noted that they could find skilled workers, but many candidates lacked such basics as an understanding of what makes an effective and reliable employee.

The resulting costs of skills shortages can be high, impacting a company's ability to compete both locally and globally. The aforementioned Manufacturing Skills and Training Study found that U.S. manufacturers face reduced earnings of up to 11 percent annually, due to increased production costs and revenue losses resulting from skills shortages.

To fill this need, employers have two basic options: They can tap into their existing workforce and build skills from within, or they can look outside their company and work through a network of partners, ranging from community-based organizations and state agencies, to community colleges and technical schools.

Borrowing from proven practices used in supply chain management to develop the talent supply chain – particularly with a focus on external channels and up and coming talent – the following four-step process can be applied to help stoke the pipeline with the talent that will be needed:

  1. Map future talent needs. Identify – and then focus on – those jobs that are most important to the company’s business strategies and develop better forecasts of their skills requirements.
  2. Build a talent pipeline. Cultivate diverse sources for middle-skills talent. For example, only about half of U.S. companies have partnerships with community colleges or technical schools. Companies can also do a better job of defining positions in job descriptions, analyzing the performance of both unsuccessful and successful job candidates, and working with educators to align curriculum with emerging job and skill requirements.
  3. Develop talent pool relationships. Communicate with talent pool partners, such as community colleges, trade schools, or employment agencies. The partners need to know what the companies are looking for in terms of both foundational and job-specific skills.
  4. Reinvigorate talent development. Companies should take the lead in developing talent via training to new and entry-level employees, internships, and apprenticeships. It is also important to commit to hiring the talent produced by such programs.

Businesses in general, and manufacturers in particular, employ large numbers of middle-skilled workers. With much at stake, employers have the opportunity to encourage middle-skills education and training, and to take steps within their own organizations to develop the talent they need. Manufacturers that make investments in developing the skills of new and incumbent workers are proactively positioning themselves to compete in today’s global economy.

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