How can manufacturers solve the skills shortage conundrum?

Benoit Wambergue
17 July, 23

As manufacturers deal with ongoing worker shortages, Benoit Wambergue, VP of cloud products strategy at manufacturing technology specialist Forterro, looks at what leaders need to do to accommodate the requirements of prospective new talent, while maintaining efficiency and profitability.

An ongoing problem

Since 2020, the number of manufacturing job vacancies across the UK has drastically increased from 24,000 to 97,000. While this could be attributed to a number of different factors, from budget cuts to the ongoing impact of the pandemic, such a large number of vacancies highlights a critical skills shortage and one that could severely impact the health of the industry longer-term.

Alongside this, businesses are grappling with short-term labour shortages that are further impacting their ability to fulfil orders in a timely and efficient manner.

As well as having significant repercussions on the individual businesses, these vacancies make a huge difference to the development and vitality of the sector as a whole. In fact, Make UK estimated that the cost of lost productivity as a result of manufacturing vacancies being left unfulfilled in 2022 amounted to between £7.7-8.3 billions – an equivalent of £21 million a day in lost output for UK GDP.

Interestingly, the recruitment challenge is not restricted just to the manufacturing sector, or even to the UK. It has been predicted that by 2030 there will be a global talent shortage of more than 85.2million people across a variety of sectors, with almost 10% (7.9million) of those in manufacturing.

Clearly something needs to change.

Attracting the best talent

In an attempt to combat the problem, many businesses operating across the manufacturing sector are adapting roles – where possible, to enable more flexible working patterns and cater to those seeking a hybrid working environment..

However, not everyone can benefit from this approach. Manufacturing businesses will always require a significant portion of their workers to be physically on-site, operating machinery and managing production. So despite being able to meet the expectations of employees seeking more flexible working arrangements, this is unlikely to be a panacea for these industry-wide skills shortages.

Providing the skills manufacturers need in their businesses over the long-term will require some significant shifts. The recent Spring Budget set out measures to overcome these immediate labour shortages – with national steps to slow early retirement and bring skilled over-50s back into the workforce.

Other policy changes to revive the number of young people entering apprenticeship programmes would have a significant impact on the next generation of manufacturing leaders, as well as industry-wide investments into upskilling people and skills, addressing critical shortages in automation and greenification.

As the sector looks ahead to a longer-term solution to these skills shortages, it is vital that businesses continue on their path towards digitisation, providing increased visibility over production, supply chains and wider business performance.

Taking mitigating measures

As we have shown, the long-standing skills shortages that have dogged the manufacturing sector are unlikely to disappear anytime soon. In the short term, manufacturers should ensure that they are maximising their current resources wherever possible.

While the rise of digitisation presents a new challenge for skills and jobs – it also presents invaluable solutions for manufacturers in the short-, medium-, and long-term.

Anyone working in the sector will be all too familiar with the impact that supply chain disruption can have on production. From shipping delays, to labour and materials shortages, the businesses that are able to continue through turbulent times are those with robust systems and processes at the heart of their operations.

Digital solutions, like a cloud-based enterprise resource planning (ERP) system, for example, can help to streamline manufacturing processes and business operations. Whether it’s streamlining inventory management or reducing downtime and bottlenecks, ERP technology can help to maximise resources – saving both time and money.

Access to good quality data

At a time of labour shortages – and as the industry faces a long journey to solve underlying skills challenges – perhaps the most important consideration is access and manipulation of data.

Alarmingly almost eight in 10 companies are struggling with poor quality data, or worse, absence of data. In fact, 60% of businesses don’t actually know how much bad data is costing them because they aren’t measuring the impact.

By achieving visibility across production and supply chains, manufacturing leaders will be better placed to make informed decisions when challenges arise. This business intelligence also enables accurate forecasting of upcoming shortages, and provides up-to-the-minute insights for manufacturers to take mitigating measures.

With research predicting that UK manufacturers will be in a talent deficit within the next decade, it is vital that manufacturers make optimising their current systems a priority and look at how they can maximise their existing resources. Not only will this enable them to work smarter and meet future product demand, it will improve the retention of existing employees and make finding new talent far easier, given the added flexibility specialist technology can bring to the workplace.

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