Is This a Turning Point for Manufacturing?

Today’s post is a guest contribution from Kylene Zenk, industry fellow for manufacturing at UKG. In the first of a three-part series, Kylene reviews findings from the UKG Workforce Institute’s 2023 manufacturing survey. 
 
Anyone working in, or associated with, the manufacturing industry knows all-too well the multitude of talent-related challenges plaguing the sector, including recruiting issues and turnover woes. The UKG Workforce Institute has monitored this situation closely over the past four years, conducting an annual research survey to understand the current state of manufacturing and how HR leaders at U.S.-based manufacturing organizations are addressing the talent dynamics they continue to experience. 
 
The latest report, “A Turning Point for Manufacturing,” just published Monday. It highlights the magnitude of the frontline-labor dilemma and some of the opportunities manufacturers have for continuing to drive progress in battling the talent crisis. 
 
Today, in the first of three articles, let’s explore the key findings from the 2023 manufacturing report. 
 
U.S. Manufacturing and Talent Outlook: By the Numbers 
 
In terms of key business metrics, there is positive news. This year saw growth in demand for manufactured goods and services, with 4 in 5 manufacturers reporting a year-over-year (YoY) increase in revenue, and 77% indicating productivity had also increased. From a talent attraction and retention perspective, the industry is still struggling, though — as indicated by these metrics: 

• 76% of manufacturers are struggling to fill critical labor gaps (Note: this number was 87% in 2022, so it’s exciting to see YoY improvement!); 
• 66% of manufactures cite a YoY increase in time to fill open positions; 
• 57% of manufacturers report YoY increases in unfilled jobs; 
• 62% of manufacturers say turnover increased YoY at their organizations; and 
• 54% of manufacturers experience greater than 20% annual turnover. 

Diversifying Talent: Room for Improvement 
 
As manufacturers continue to struggle to attract and retain skilled talent, it’s imperative that they strengthen talent pipelines to fill critical labor gaps. One area of opportunity that is glaringly apparent from this year’s research is to increase the hiring of diverse candidates, with only 2 in 5 manufacturers considering diverse hiring a “high” priority for their organizations. 
 
While some progress has been made, the research highlights room for improvement, with few manufacturers having active recruitment programs targeting these diverse candidate pools: 

• Neurodiverse individuals (22%); 
• Women (24%); 
• People with physical disabilities (25%); 
• Underrepresented racial or ethnic groups (33%); and 
• LGBTQIA+ talent (38%). 

The second article in this series — coming next week — will explore the importance of increasing women’s representation in the industry and spotlight how one leading global manufacturer is taking proactive steps to do just that. 
 
Negative Industry Perceptions: Focus on the Next Generation 
 
One talent dynamic that the survey didn’t cover in depth is the aging workforce. However, according to the Manufacturing Institute, one-quarter of the manufacturing workforce is over the age of 55. Between the skilled knowledgebase of employees leaving the workforce through retirement, and the general lack of skilled labor, retention, and talent attraction issues, approximately 2.1 million jobs in the manufacturing sector could go unfilled by 2030. That’s a lot of people to replace and hire in the next six and a half years! 
 
Exacerbating this problem are the negative perceptions that many Americans have of manufacturing, which is often characterized as low-skill and low-tech work environments, consisting of repetitive tasks, and dark and dingy factories with assembly lines, which means parents would not encourage their children to seek careers in manufacturing. The UKG research highlights that 75% of manufacturers believe negative industry perceptions impact recruitment. 
 
What can be done to change these feelings? The third article in this series will explore actions that manufacturers can take to create excitement about the career opportunities in modern manufacturing, in an effort to attract the next generation of young talent coming into the workforce. 
 
In the meantime, for additional insights into the critical talent issues facing the manufacturing industry, read the complete research report, A Turning Point for Manufacturing.