Fix The $1 Trillion Skills Shortage Problem

America’s economy is on the cusp of a mega-boom and a protracted period of supercharged growth. Indicators show surging consumer spending and demand for goods that the manufacturing sector is struggling to meet. Orders are going unanswered. Despite the strong consumer demand for manufactured goods, factories are reporting difficulties in finding skilled workers to build these products and meet the demand. It is a $1 trillion problem, according to a recent study published by Deloitte and The Manufacturing Institute.

Paradoxically, even though today’s unemployment rate is much higher than just three years ago, it’s harder to fill job openings in 2021 than in 2018, when the U.S. economy was in the midst of the second-longest expansion in history. The study examines what’s behind this talent shortage and identifies several related challenges confronting manufacturers.

One issue is that the manufacturing sector has an image problem. As they try to attract unskilled workers, manufacturers are facing stiff competition for talent from high-profile brand names in the e-commerce and logistics industries that have reputations for being digital-first companies with a bright future.

There’s a perception problem. Young Americans don’t want to work in factories, in part because they fear their job will eventually be eliminated due to factory automation or manufacturing being shipped overseas. Potential workers think that, with robots taking over, they will be relegated to boring jobs with zero or limited career growth opportunities.

The post-pandemic workplace will be different. Many companies are considering more flexible onsite/remote requirements. Similarly, workers are rethinking what they want in a career and their work expectations. A May 2021 report from Prudential Financial illustrates that the changing nature of work is motivating workers to acquire new skills. Nearly half of those surveyed said they will have to learn new skills to do their job in the next year, with the majority saying they will need to learn new skills in the next three to five years.

“Job stability going forward will be based on the skills workers have to offer. Employers will be willing to pay a premium for talent with the right skills,” said Prudential Vice-Chair Rob Falzon, as cited in the report. “At the same time, corporate America will need to step up and invest in their talent by offering skills training and enhancing on-the-job learning opportunities, such as through apprenticeship and rotation programs.”

Manufacturers must focus on skilling entry-level workers.

To succeed in attracting these young workers, manufacturers must promote and highlight that they will offer excellent training and long-term career growth. To provide a compelling on-ramp for the crucial entry-level roles that may attract first-time workers to the sector, manufacturers must significantly enhance their on-the-job training value proposition.

Today, there’s less need for “hard” technical (and very often, repetitive) skills because those tasks have largely been automated. Rather, there’s an urgent need for workers who can be trained to manage, maintain and repair the robots and other advanced equipment in today’s digital factory. To attract workers to take on these roles, manufacturers must rethink how they will train workers, emphasizing on-the-job training that is more efficient, more effective, more compelling and more rewarding.

People like to learn new skills. But forget classrooms — this training must be given in the context of the actual working environment — on the shop floor. In the past, apprenticeship was the norm; a senior skilled worker delivered one-on-one training to step the trainee through the procedures, skills and techniques needed to assimilate a new task. Indeed, learning by watching someone else doing it “the right way” goes back to the dawn of the human race.

Adapting that hands-on approach to the new generation is crucial. Gen Z and millennial workers are visual learners who want to learn independently. They don’t buy manuals to learn a new skill; they turn to YouTube and TikTok. There’s no substitute for expert-led instruction in which the technique and know-how to efficiently complete a complex task successfully are demonstrated one-on-one.

How do you capture all that technical know-how and deliver it as self-paced training? AI can play a leading role by automating the creation of the many hours of training video content that is needed by manufacturers to quickly train workers for low-skill jobs. While they address the immediate need to hire and train entry-level workers, manufacturers must simultaneously fill their middle-skill job vacancies.

An AI-powered training program can both shorten the training time (and cost) involved in reskilling workers for these roles and recommend an adaptive training program, where the modules are modified to suit the needs of each worker and the skills objectives of a specific plant.

Build back better by reskilling for tomorrow’s factories.

High levels of automation on today’s shop floor means there will be a diminishing need for factory workers to operate heavy equipment or perform manual tasks. Instead, manufacturers will need their know-how and intuition to operate tomorrow’s factories.

Factories have evolved immensely in the last 10 years through digital transformation and the associated adoption of robotics, cobotics and analytic technologies that continually measure output to reduce waste and maximize quality. Installing, setting up, calibrating, managing and maintaining these technologies will require an upskilled workforce.

Equipped with the right training methodology, manufacturers can quickly attract the talent they need to fill entry-level positions. They can then upskill them for middle-skill roles, and they can reskill them for new kinds of roles across manufacturing, logistics and planning. With a focus on modern, appealing training, they can also shake off that reputation for being a dead-end career.

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Sam Zheng: on a mission to transform how skilled trades learn and train—by digitizing know-how into step-by-step videos powered by AI.

How To Fix The $1 Trillion Skills Shortage Problem (forbes.com)