Manufacturing, like every other industry, has felt the effects of the COVID-19 pandemic. Among the many consequences of the crisis is a record increase in unemployment. The Canadian economy has not escaped that trend. At the height of the crisis 3 million Canadians were unemployed, with the manufacturing sector among the top casualties.
But despite this rise in the number of people looking for work, skills shortages continue to be a challenge for manufacturing firms, because there will still be gaps between the capabilities businesses need and what is available in the labour market. Businesses are struggling with a so-called 'blue-collar drought', with roles becoming increasingly technical and demanding, but fewer people choosing to pursue education and training in sectors like manufacturing.
Several trends are increasing the scale of this skills gap. These include an aging and retiring workforce, the impact of robotisation and a tight labour market. Here are some of the biggest recruitment challenges manufacturing businesses are facing right now, and some tips on how you can overcome them.
challenges manufacturers face when recruiting skilled candidates
poor perception of the manufacturing sector
For many people, the idea of working in manufacturing is unappealing. Perhaps even more concerning is that prospective young employees view manufacturing as boring, outdated and not very creative. In a Deloitte survey, 45% of respondents cited “negative perceptions towards the manufacturing industry” as a cause for projected job vacancies. This makes uneasy reading for HR managers in the sector.
If you’re female, working in manufacturing could be even less appealing, as it is still a very male-dominated industry. A global study by the World Economic Forum showed that women make up only 20% of the manufacturing and production workforce.
The potential economic impact of this is enormous, with unfilled positions expected to create productivity losses of up to $2.5 trillion by 2028. Companies must work together with industry bodies to become more attractive to women and young people.
So how can the sector appeal to young people, who represent the future of the industry? To this younger generation, inclusivity, and environmental and social conscience are far more important than they were to previous generations. The way you present your values, company and people must appeal to this younger generation.
Apprenticeships in which young people gain skills and experience through on-the-job training and undertake local trade-based education are one method of offering young people a route into a career in manufacturing. But to recruit the most talented young people, the perception of the industry has to change for the better.
A study in 2015 showed that over the preceding 144 years, technology had created more jobs than it had eliminated.
the threat of automation and robotisation
Historically, there has always been a fear that new technology will mean fewer jobs. The reality is that new technologies often create different opportunities. A study in 2015 showed that over the preceding 144 years, technology had created more jobs than it had eliminated.
When used in the right way, automation can achieve a positive impact on productivity, employee engagement and customer value. Amazon is an example of how a company can use automation to scale warehousing and quickly ship goods during peak periods, while reducing the amount of time needed to train employees.
The use of automation and robotization should be central to modernizing the image of the manufacturing sector. In the future, you are likely to see the types of roles you recruit for change and require different skills as technology advances.
an aging and rapidly retiring workforce
In Canada, almost 30% of manufacturing workers are over the age of 55, according to StatCan. You are probably well aware that one of the reasons the sector is facing a shortage of workers is the high number of people who have recently retired or are approaching retirement age. Older workers should be viewed positively. They come with many skills, knowledge and experience that can be shared with younger employees.
You must make the most of an aging workforce and limit the loss of expertise and knowledge when experienced workers retire. In our guide, 8 steps for manufacturers to tackle skills gaps, you can find out how BMW managed to improve productivity by 7% by taking key steps to accommodate their aging workforce.
Randstad's guide to tackling talent shortages in manufacturing.
political and socio-economic changes
The COVID-19 crisis is one of the biggest obstacles the manufacturing sector has had to overcome in recent memory. The pandemic has forced companies to find new ways to work so they can meet demand and stay in business, while facing unprecedented HR challenges and trying to keep their staff safe. Workforce gaps created by unavoidable layoffs and sickness absence have necessitated a new approach to recruitment, with the expanding contingent workforce proving to be a valuable source of talent for many firms.
Political changes are also continuing to have a significant effect on the manufacturing industry. Tighter border controls and travel restrictions created by developments like Brexit and COVID-19 could also limit opportunities to recruit from overseas.
For any HR manager, a reduced number of skilled workers can pose a challenge. When developing your recruitment strategy, it’s important to consider how you could be more innovative, particularly for contingent talent.
the need for manufacturers to upskill
Upskilling your workforce is essential to overcome the skills gap. 29% of manufacturing workers believe their skill set is now redundant or will be in the next couple of years, while 38% believe this will be the case in the next 4 to 5 years, according to a study.
Despite this, most manufacturers are not upskilling or investing in education to assist with employee retention. In fact, a recent survey showed that only 36% of manufacturing companies budget for employee development, yet two in five companies have an annual staff turnover of at least 20%.
So what can you do to combat these challenges?
Optimizing your flexible workforce is essential. By developing a strategy to take full advantage of flexible and contingent talent, you will be taking control of the factors you can influence and putting your company in the best position for the future. With so many manufacturing workers believing their skills will be redundant in the next five years, it’s critical to overcome the skills gap.