The manufacturing landscape is full of exciting, shiny opportunities thanks to new technologies such as Artificial Intelligence, Machine Learning and concepts like Servitization and Digital Transformation. However, underneath the hype created by these disruptions lies a common and not-so-exciting concern: lack of skilled labour.

Author Muge Hizal Dogaroglu | Copperberg

Reading time: 2 minutes

The manufacturing landscape is full of exciting, shiny opportunities thanks to new technologies such as Artificial Intelligence, Machine Learning and concepts like Servitization and Digital Transformation. However, underneath the hype created by these disruptions lies a common and not-so-exciting concern: lack of skilled labour. The shortage of competence shows up in our reports, in our Podcast with service leaders, during our roundtable sessions and our conversations with the members of our community.

However, the only thing that is missing from these interactions is the most crucial one; what are we doing to do about it. We believe that it is crucial for manufacturing companies to make upskilling efforts an essential and permanent part of business culture. Here is why.

1. The education system cannot keep up with industry demand.

The education system is a huge part of the skilled labour problem for two reasons. Firstly, the traditional school system fails to prepare prospective employees for jobs as they heavily rely on theory and out-dated business practices. And secondly, because preparing tomorrow’s employees is considered to be the responsibility of the educational institutions and an extra benefit rather than the norm in companies, a lot of the time organizations don’t prioritize offering upskilling opportunities for their employees.

However, it is clear that the current mismatch between industry demand and the level of the education system will only harm the manufacturing industry. Therefore, instead of trying to find the right talent by offering more salary (more on the issue of competitive salary as a way to attract talent) companies need to focus on creating room for growth for their existing and future employees.

2. New technology requires new skills.

One of the main reasons for the lack of skilled labour is the pace of innovation. It’s hard to keep up, even for the most tech-savvy among us as new technology requires new skillsets. Moreover, it brings about new business models. Take predictive maintenance for instance, it’s a new business model for the service industry that uses IIoT, AI and data analysis to predict errors or other maintenance needs before they happen to maximise customer satisfaction. It wouldn’t be possible if it wasn’t for the technology and that technology wouldn’t be as useful without the right business model.

Digital literacy and problem-solving skills are some of the skills that will become even more important in the future. According to The World Economic Forum’s article, skills such as creativity, emotional intelligence and cognitive flexibility will be among the top skills to have in 2020. So companies can prioritize creating a fail-safe environment in which employees can gain hands-on experience while improving their skills.

3. It will only get more intense

The pace of change will accelerate along with the advancements in technology and movements such as servitization and digital transformation. The World Economic Forum’s article states that “today, 10 million global manufacturing jobs remain unfilled due to gaps in skills and education – gaps that will only widen as Industry 4.0 technologies advance.” Considering the fact that education system will not be able to cope with the demand, we can foresee that the shortage of skilled labour will only grow unless companies hold themselves accountable for the improvement of their workforce.

Therefore, organizations will increasingly need to invest more learning and development resources in their own workforces for their own good.

4. Opportunity for self-growth drives talent

Our new survey which we conducted with service leaders showed that 60% is struggling to find the right people and an additional 24.77% can foresee such a lack/shortage in the next 5 years. Also, half of the service businesses have less than 10% of females in leadership roles and only 26.98% of organizations are attractive to people under 30 years old. It’s already a known fact that diversity is crucial for attracting talent.

But did you know that room for career progression comes before a competitive salary for the Millenials? According to a study done by PWC, the biggest factor that makes an employer an attractive prospect for millennials is the opportunity for progression.

What this information entails is that by creating initiatives for professional growth, not only companies can improve the performance of their existing employees and have them future-ready but they can also attract talent as a result of the learning opportunities they provide.

The Takeaway

  • Manufacturing companies need to initiate learning opportunities for their staff because the current education system is not able to respond to industry needs.
  • New technology requires new skills from people and new business models for them to make a difference.
    If companies do not take initiative, the shortage of skilled labour will only grow because the pace of innovation is getting faster every day.
  • Offering room for growth not only benefits companies in terms of their existing workforce but also helps them attract talent.