Companies in all industries in our region and across the U.S. are finding it increasingly difficult to fill open positions. In recent surveys of the manufacturing industry conducted nationally by the Leading Edge Alliance and in the Greater Philadelphia area by Kreischer Miller, the lack of qualified workers was cited as the top barrier to business growth for 2018 by over half of respondents. And a recent Small Business Economic Trends survey published by the National Federation of Independent Business yielded similar results: over half of respondents reported few or no qualified candidates for the positions they were trying to fill.
A number of potential factors have been cited over the past several years as contributing to this growing qualified labor challenge, including technological advances, the retirement of baby boomers, and our society’s emphasis on college education over trade and technical schools.
It may also have something to do with the reality of the numbers. Data recently released by the U.S. Bureau of Labor Statistics showed that there were 6.6 million job openings at the end of March 2018 and an estimated 6.6 million unemployed workers. That is an unprecedented one-to-one ratio of unemployed workers to jobs available. A ratio that tight almost certainly means that there will be serious mismatches between available jobs and available workers, significant competition for those that do match, and increasing wage pressure.
So what do businesses need to do to navigate or overcome this shortage of qualified labor?
Retain. The most cost efficient thing a company can do is try to hold on to those skilled workers it already has. The knowledge base and skillset of the existing workforce – a product of years of experience and training – is invaluable, as can be the resulting culture formed within the organization. While retirements and turnover may nevertheless occur, competitive salaries and benefit programs, mentoring programs, continuing education, training and development, and advancement opportunities can go a long way toward keep a workforce engaged and retained.
Retrain. Advancements in technology and processes can lead to a gap between a worker’s existing skillset and what is required to perform the job or task. Thus, there is a need for additional training or retraining. The benefits of retraining workers include the obvious – retaining workers and maintaining the company’s culture – but likely also result in increased productivity. And while there is an investment associated with retraining efforts, there may be funds available from state and local governments to help defray some or all of the costs.
Recruit. While retention and retraining focus on a company’s existing workforce, its current needs and future employees have to be recruited. Recruiting for immediate staffing needs may be carried out via employee referrals, social media and job websites (such as Indeed and Glassdoor), professional recruiters, and job fairs. Additionally, local community colleges and trade organizations may provide access to talent and/or opportunities to partner with them to develop talent through training or apprenticeship programs. Companies would also be well served to get involved with local school districts (and in particular, middle schools and high schools) to raise awareness of career opportunities and to start establishing a pipeline of next generation workers.
Download a copy of Kreischer Miller’s 2018 Greater Philadelphia Manufacturing Survey results at kmco.com.
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