Canada's manufacturing sector saw consistent growth at the start of 2022, followed by a decline spurred by supply chain disruptions and rebounding economic activity. In October, sales in the industry started to trend upwards, but manufacturers are still working with compressed margins and rising costs.

In 2023, manufacturers will continue to feel the effects of the labour shortage in Canada. As 47.4% of businesses in the sector struggle to find skilled workers, companies must embrace new recruiting strategies.

One major challenge for manufacturers is that their sector ranks as one of the lowest-paying sectors in Canada. Since candidates are more likely to gravitate towards higher-paying jobs, it can be extremely difficult to attract skilled workers. To remain competitive and develop effective hiring practices, employers in the industry must understand workers' preferences and keep tabs on emerging manufacturing trends for 2023.

Man working on a manufacturing site, pulling a trolley.
Man working on a manufacturing site, pulling a trolley.

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growing labour shortages

The labour shortage is driving many of the manufacturing job trends for 2023 — 85% of manufacturers are having trouble filling open positions. In 2022, the shortage resulted in $13 billion in Canadian economic losses. 

There are several factors spurring the shortfall of skilled talent, but one of the prime culprits is the aging workforce. The average manufacturing worker is much older than the average Canadian worker. In fact, 22% of these workers are aged 55 or older. This statistic means more than one-fifth of the nation’s manufacturing workers are inching closer to retirement.

Employers must find ways to deal with the current labour shortage and ongoing retirement rates. In 2023, there'll be a focus on recruiting and retaining entry-level workers. Companies will start to upskill lower-level workers and reskill older workers to convince them to stay on in less demanding jobs. Manufacturers can also develop mentorship programs where aging workers share their skills and experience with younger generations.

The government is planning to address the shortage by leveraging immigration. Temporary worker programs are in the works; if successful, they could give 500,000 immigrants a path to permanent residency.

continuing supply chain disruptions

Supply chain disruptions are still causing problems in the manufacturing sector. More than half of the manufacturing companies in Canada expect ongoing challenges in maintaining inventory and acquiring supplies. To combat current and future disruptions, the industry is rethinking and redesigning supply chains.

Weaknesses in the supply chain can be targets for hackers and other bad actors. To mitigate risk, manufacturers will invest in new cybersecurity defenses in 2023.

broader talent pipelines

Traditional talent pipelines are no longer enough in the manufacturing sector. With the significant skills shortage, manufacturers must think outside the box when it comes to their recruitment strategies.

First, employers should focus on diversity, equity and inclusion in the recruitment process. Women make up just 28% of the manufacturing workforce. Companies can attract more highly skilled workers by targeting women, immigrants and other underrepresented groups. It's also beneficial for employers to consider hiring candidates with transferable skills.

find out how randstad helped a food manufacturer attract high-quality candidates by offering competitive salaries and building a broad talent pipeline.

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advancement in digital technology and automation

There’s no denying that digital technology has transformed the manufacturing workplace. In fact, studies suggest that globally 1.7 million manufacturing jobs have already been lost to automation, and it's predicted that up to 20 million more jobs in this sector could be lost by 2030. 

The reality is that technology can create a faster, safer and more cost-effective manufacturing process. The industry 4.0 trend will be in full swing in 2023, bringing with it an increase in factory intelligence and digitized production. Companies will use AI to improve everything from inventory management and optimized orders to supply chain visibility.

Other technology-based manufacturing trends include:

  • 3D printing and manufacturing on demand
  • wearables to monitor safety situations
  • manufacturing internet of things for predictive maintenance
  • data analytics for flexible production

Automation won’t, however, reduce the hiring demands for employers or play a significant role in closing the skills gap. As automation increases, so will the need for workers with high-level digital skills. Immersive technology will enable workers to maintain systems from remote locations, which reduces the need for on-site staff. Companies will also need cybersecurity employees to protect assets and operations.

Manufacturers should shift their hiring practices now to target technically advanced candidates. They can also invest in upskilling and reskilling to help current workers succeed in a technology-heavy workplace.

faster hiring processes

Manufacturing businesses are finding it necessary to speed up their hiring process or risk losing top talent candidates. It’s crucial for employers to streamline the recruitment process. This might include minimizing the application process, using technology to filter through applications and differentiating between nonnegotiable and optional skills and qualifications. A faster hiring process can enable manufacturers to hire high-quality candidates before their competitors.

unfavourable industry perception

The manufacturing industry has been struggling with an image problem for quite some time. Many candidates view manufacturing work as hard and low-paying. This unfavourable view only works to hinder manufacturing hiring efforts.

Fortunately, manufacturing leaders are starting to take corrective action. In the United States, the National Association of Manufacturers (NAM) and The Manufacturing Institute (MI) have joined forces with Creators Wanted. The initiative uses a gamified mobile experience, immersive exhibits and hands-on activities to create a positive perception and entice young workers to consider manufacturing jobs.

Employers are attracting workers by offering higher salaries and meaningful benefits, such as:

  • flexible schedules (34%)
  • career advancement (32.5%)
  • skills development (23.5%)

Manufacturers are also dealing with the perception of poor sustainability. In 2023, more companies will start to take accountability for their environmental impact. There will also be a shift toward sustainability in terms of energy sources, processes and materials.

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Learn more about emerging manufacturing job trends and salary shifts by downloading our 2023 salary guide today.

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