Amid the Coronavirus disease (COVID-19) pandemic, unemployment in the United States is surging to historic highs. Early reports show that 18,000 of the jobs lost so far have been in the manufacturing sector. That number is sure to grow before this period of social distancing is over.
But, as we begin to emerge from this crisis, it’s likely that the manufacturing industry will lead the charge, and the skills gap that has grown to more than 500,000 unfilled jobs in recent years will be even more pressing.
These numbers mean that the tight workforce and need for skilled workers in the industry are unlikely to change drastically in the near future. The tight labor market and wide skills gap will persist in manufacturing, even as unemployment rises as a result of COVID-19.
According to the National Association of Manufacturing and Deloitte, the U.S. manufacturing industry will need to fill about 3.5 million jobs by 2025. As it stands, as many as 2 million of those jobs may go unfilled, due to difficulty finding people with the skills in demand.
In order to address these challenges and invest in the future, companies have implemented strong employee education programs to provide their employees access to higher education and upskilling opportunities. For each of these industry leaders, the investments in their workforces are a high priority, where some even pay up to the full amount of an undergraduate or graduate degree.
This emphasis on the importance of education in the manufacturing workplace is relatively new, but it’s clear the trend is not going away any time soon. Providing employees with a pathway to education is more than just a recruiting tactic — it’s crucial in retaining and upskilling the workforce in order to fuel progress within the industry.
Looking ahead, now more than ever, large companies should be taking the time to invest in their workforce by providing access to education, knowledge development and upskilling. It is no longer enough to simply offer a tuition assistance program, that is typically only used by 1-2% of employees who have access to it. Instead, companies should create tailored, strategic approaches to employee education.
By leveraging an education program that helps meet each company’s specific needs, industry leaders can foster a burgeoning pipeline of talented, dedicated, skilled workers. In order to develop this pipeline and to accelerate the upskilling process, companies would be well-served to create strategic education programs with each stage of the talent recruitment and retention funnel in mind.
The first step in getting smart, driven people into your workforce pipeline is recruitment. The challenge is that manufacturing jobs have often been seen as less than glamorous, by those unfamiliar with its historic contributions. According to a Deloitte report, manufacturing ranked last as a career choice among people ages 19-33. Additionally, only 30% of parents would encourage their child to pursue a job in manufacturing.
In reality, manufacturing can be defined by its successes as a source of innovation, encompassing markets critical to national security and for providing high-paying frontline jobs. However, many young people are unlikely to recognize the industry’s contributions on their own.
Instead, today’s job seekers are attracted to companies that offer opportunities for career growth, personal development, education and advancement. An Oregon State University study found that Millennials place a high value on workplace culture and professional growth. Similarly, according to a study by Deloitte, about eight in 10 Millennials say that on-the-job training, continuous professional development and formal training led by employers are important to help them perform their best. Central to these sentiments is the opportunity to learn and advance through education.
Upskilling and employee retention go hand in hand because employees who are provided opportunities for career development through upskilling are happier to stay with a company for a longer period of time.
Companies that make education accessible to their employees and focus on career development are in a better position to attract and retain talent. According to a study commissioned by InStride, up to 70% of employees say they are more likely to start a job and stay with an employer who offers educational opportunities. Similarly, 80% of people who started college but have been unable to finish their degree are interested in pursuing their education while working, according to the study.
There is a need for manufacturing CEOs to create strategic education programs that go beyond the traditional training and tuition assistance programs of the last several decades. Instead, companies should focus on designing programs that tie learner outcomes to business objectives.
Strategic education programs are particularly attractive to young people who are increasingly concerned about loans. Student debt is now the second-largest category of consumer debt after mortgages. Because of this, many students say they cannot afford to go to college and are more interested in earning a degree while they work. Employers are in a position to help reduce the need for so much borrowing.
One thing is clear: Manufacturing CEOs need the next generation of workers to join their companies now, and in the future. With a growing number of roles to fill and not enough supply, they must prioritize their talent development strategy. A key to their success is the power of strategic enterprise education initiatives.