4 Ways Manufacturers Can Adapt to an Aging Workforce
The sea of “Helped Wanted” signs may be getting attention now, but it masks what’s been happening on the factory floor for years: an aging workforce and manufacturing skill gaps aren’t able to keep pace with demand. The National Association of Manufacturers estimates that 2.1 million manufacturing jobs could go unfilled by 2030.
With baby boomers retiring in droves, a move accelerated by the pandemic, and younger workers uninterested in manufacturing jobs, the sector is struggling to fulfill orders and take on new business. Severe labor shortages increase the likelihood of worker injuries and product errors, and add more disruption to already frayed supply chains.
The average age of a machinist is 53 years old, and 90% of machinists are over 40. Yet, 63% of workers aged 18 to 44 have no intention of pursuing a manufacturing job, according to the JMJ Phillips Manufacturing Sector Outlook survey.
The good news is that there’s a lot that manufacturers can do to reverse the trend, but it will take an investment of time and resources. Here are four core strategies for adapting to this new reality:
1. Facilitate Knowledge Transfer with Mentorships
Mentorship and apprenticeship programs have long been a fixture in manufacturing, where new hires learn the job alongside experienced workers. These programs should be a key component in the fight against the brain drain. A survey from the Manufacturing Institute’s Center for Manufacturing Research showed that 69% of workers under 25 stayed with their employer because of training and development opportunities. Manufacturers should look to formalize mentorship and tout its benefits.
Mentorship programs have been shown to boost morale and foster intergenerational relationships, allowing older workers to leave a legacy before they retire. It may even postpone some retirements if workers have a renewed sense of value.
Mentorship can take various forms, from traditional one-on-one pairings of older and younger workers to group mentorship arrangements, where one experienced employee leads group training sessions. What’s more, the benefits of mentorship go both ways. Older employees pass on their wisdom and create opportunities for younger workers to share their technology expertise. In addition to work-based mentorship programs, consider partnering with local vocational schools or community colleges to start apprenticeship programs that attract younger workers.
2. Hire for the 21st Century
Millennials and Gen Z have different expectations of the workplace than previous generations. They bring their unique life experiences, and want employers to acknowledge their perspectives.
Younger workers grew up in multi-racial, multi-ethnic communities; use technology constantly; and are dealing with the burdens of student loans, to name a few of the hallmarks of these generations. As a result, workplaces that understand them—and design benefits packages around them—will be more successful in attracting the next generation of manufacturing workers.
While work-from-home arrangements may not be possible in manufacturing, there may be instances where some flexibility is possible, such as remote training sessions or flexible schedules. Wellness programs may interest younger workers who want to improve their physical and mental health.
In addition, Millennials and Gen Z place great importance on diversity and inclusion (D&I). They are more attuned to discrimination, and seek workplaces that align with their values.
3. Hire Older Workers
In their quest to create a pipeline of employees, manufacturers shouldn’t overlook a potential source of talent: experienced workers. People 55 and older still have many years of service to contribute. Because of their experience, these employees already have many competitive skillsets, and can hit the ground running.
Recruiting job seekers with multiple decades of skills and expertise requires a new approach that makes these workers feel welcome. For years, many have been told they’re less capable and willing to work. Research from AARP shows that two-thirds of workers between the age of 45 and 74 have experienced age-related discrimination, so it’s vital to demonstrate that your company is not an offender.
Strategies to find older workers include:
- Contact recent retirees about part-time positions
- Tap corporate alumni networks
- Target job boards older workers use
- Avoid terms in job postings that alienate older workers, like “young and energetic” or “digital native”
4. Investing in Automation
With the cost of automation coming down drastically, manufacturers are increasingly able to tap into artificial intelligence, augmented reality, the Internet of Things (IoT), robotics, and 3D printing to deal with the labor crunch.
This trend accelerated during the pandemic as automated processes allowed factories to continue their activity while complying with social distancing measures. As a result, robot sales reached a record in the first quarter of 2022. According to the Association of Advanced Automation, they were up 28% from the previous year as manufacturers sought relief from labor shortages. Rather than replacing workers, automation can be deployed to do jobs that managers can’t fill. Even better, robots can take over low-skilled, repetitive tasks so your employees can focus on more meaningful work.
Any move toward automation must also be coupled with an employee communication initiative that reassures workers that their jobs aren’t headed toward obsolescence. Employers can also offer additional training programs to allow employees to level-up their skills to take on greater responsibilities.
Facing Workforce Challenges with Aldrich
As the manufacturing workforce ages and few younger workers are available to replace them, it’s time for companies to think creatively about attracting and retaining talent. With the right changes in manufacturing employment, training, and development, the industry can move forward and continue to grow, equipped for the floor of the future.
If you have questions about managing your workforce, fill out the form below to contact the author, Kellan Davis, CPA.
Meet the Author
Kellan Davis, CPA
Aldrich CPAs + Advisors LLP
Kellan has over five years of experience with national and regional public accounting firms working in a variety of industries including manufacturing, construction, software, lending, retail, telecommunications, nonprofit and benefits plans. He now actively serves his clients as a member of Aldrich Manufacturing and Distribution group and specializes in revenue recognition. Kellan is originally from... Read more Kellan Davis, CPA
- Revenue recognition
- Certified Public Accountant
- Lease accounting