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Survey shows business trending up for manufacturers, but young talent is scarce
- November 17, 2014
- News Release
- Shop Management
North America’s manufacturing sector is on an upward trajectory, according to the latest Industry Market Barometer® (IMB) survey from New York, N.Y.-based ThomasNet®. However, a shortage of young talent, compounded by baby boomers’ negative perceptions about millennials, could stand in the way of its continued expansion.
The annual survey of close to 500 product and custom manufacturers, mostly small and midsize companies, shows continued growth for this sector. Companies are hiring, increasing production capacity, and investing for more growth to come. More than half (58 percent) grew in 2013, and 63 percent expect even more gains by the end of 2014.
Manufacturers are getting more business from their existing markets, and their average account values are rising. Seventy-six percent now are selling overseas, and one-third expect that business to increase. In anticipation of what’s ahead, they’re investing in capital equipment, optimizing operations, upgrading their facilities, and retraining their people. A little more than half expect to add staff in the next several months, up from the 42 percent who planned to hire last year. Respondents’ companies are looking for trained, experienced people—manufacturing/production management, line workers, skilled-trade workers and engineers—to keep up with current and future demand.
However, “for the industry to sustain its steady climb, all the fundamentals need to be in place, and one of them is missing—a robust pipeline of talent,” said Mark Holst-Knudsen, president of ThomasNet.
Last year’s IMB called attention to the “ticking biological clock” in manufacturing—the disruption that’s coming as baby boomers leave the workforce without people primed to replace them. This year’s survey depicts the “ticking” turning to an alarm. Of this year’s respondents, 49 percent are 55 and older. Moreover, 38 percent plan to retire in one to 10 years, and 65 percent lack any succession plan.
The millennial generation (ages 18 to 32) can take the time to learn the business now before their predecessors retire. However, 62 percent of manufacturers say millennials represent a small fraction of their workforce, and 81 percent have no explicit plans to increase those numbers.
However, companies are making headway in the area of apprenticeships, which provide opportunities to bring in entry-level employees and career changers. For manufacturers that can use these programs, 51 percent now have them in place and 23 percent plan to do so. They’re teaching apprentices trades such as welding, machining, and CNC milling and turning while increasing their staff.
This year’s data shows that the manufacturing industry increasingly aligns with millennials’ value systems and technology expertise. The research demonstrates that millennials have an opportunity to make a social impact working with sustainable and green technologies, solar energy, and wind power. In addition, respondents cite innovations in design and manufacturing software, automation/robotics, and 3-D printing as intrinsic to today’s jobs.
But 46 percent of respondents say that a larger issue is at work: Younger people still perceive manufacturing as blue-collar work. And baby boomers’ perceptions of millennials exacerbate the challenge. Forty-three percent of respondents believe that this generation lacks the work ethic and discipline to succeed.
“At a time when the American manufacturing sector is poised for a comeback, the talent shortage is the 'elephant in the room' that could impede progress. It will take the concerted effort of every manufacturer to reach across generational lines and bring in the people who are critical to the industry’s continued success,” said Holst-Knudsen. To download the research, go to www.thomasnet.com/imb.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
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