Deloitte and The Manufacturing Institute’s Updated Digital Skills Report for the Manufacturing Industry
The US manufacturing industry has emerged from the pandemic on a strong growth trajectory and continued growth is expected over the next 10 years as companies work to meet evolving customer demands, de-risk their supply chains, and leverage government incentives and policies. Deloitte and the Manufacturing Institute released the 6th talent study which found a net need for 3.8 million jobs within the next decade. However, the ongoing skills gap and labor market restraints could topple that growth if not addressed. Amid the continued digitalization of the industry, we’re seeing an opportunity for manufacturers to adopt more employee-focused strategies that will provide the training, tools and technology required to accelerate growth.
Investment in the US manufacturing industry is driving strong growth and creating significant opportunity for jobs. Key legislation, including the Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and Creating Helpful Incentives to Produce Semiconductors (CHIPS), has spurred record private investment in U.S. manufacturing. The number of manufacturing businesses in the United States has grown 0.7% per year on average between 2018 to 2023 to cross 623,000 as of November 2023. Deloitte analysis of government data as of September 2023 indicates that nearly 300 new clean technology and semiconductor and electronics manufacturing facilities have been announced and are planned for completion by 2031. These projects represent over US$430 billion invested and include announcements of more than 234,000 new manufacturing jobs to be created.
The industry is still facing a significant and impactful gap in skills and applicants. Higher-level skills will be required as manufacturers continue their journey toward Industry 4.0 which could add to the skills gap – but tight labor markets have also created an applicant gap which has challenged manufacturers’ ability to fill roles across all skill levels. Deloitte and the MI predict that over 5 out of 10 of the skilled open positions (1.9 million) could remain unfilled by 2033 if manufacturers are not able to address the skills gap and applicant gap. Highly skilled roles like statisticians, data scientists, engineers, logisticians, computer and information systems managers, software developers, and industrial maintenance technicians are projected to grow, across all industries, at the fastest pace between 2022-2032. Traditional roles will continue to be important as production-related occupations currently comprise 49% of workers, the largest number of people within the manufacturing sector.
Manufacturers are applying a “customer focus” to their workforce to understand worker needs and design innovative solutions to create better experiences and improve retention. This includes making investments in the training and technology that are a priority for younger workers. Nearly half (47%) of respondents in Deloitte and the MI’s study indicated that flexible work arrangements (including flexible shifts, shift swapping and split shifts) is the strategy that their company has found to be most impactful for retaining employees.
To build their talent pipeline, and attract and upskill the workers they need, manufacturers are investing in partnerships and taking a regional ecosystem approach. More than nine out of 10 surveyed manufacturers indicated that they are forming at least one partnership to improve job attraction and retention, and on average, they are partnering with four or more. Nearly half (47%) of those surveyed in research by Deloitte and the MI indicated that apprenticeships, work studies, or internships at manufacturing companies would be the most effective way to increase interest in manufacturing as a career choice.
Check out the full report here.
