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Shaky ground? How can U.S. manufacturers access the skills and talent they need?

A snapshot of the manufacturing skills gap
As U.S. manufacturers gear up for the next wave of even tougher global competition, they face a stubborn talent dilemma. They cant find the talent they need, where it matters mosteven in the face of high unemployment. And as the skills requirements change along with the industry, they can be at risk of falling even further behind on the talent front. Heres a look at a few of the key trends fueling this important issue.

Real Analytics

During the next three to five years surveyed manufacturers anticipate hiring challenges in many workforce segments, but skilled production tops the list. Here is a breakdown of the top three segments and the percentage of responding manufacturers that chose them:


The nature of manufacturing work itself is changing quickly, making it hard for talent to keep up. Redesigned production lines are one of the biggest changes. Redesigned/streamlined production lines Increased use of automation


80 % 48 % 29 %

Skilled production Machinists, craft workers, distributors, technicians Production support Industrial/manufacturing engineers, planners Scientists and design engineers



Skilled production


Production support


Unskilled production



Skilled production workers can have the biggest impact on performance. And thats where most manufacturers have encountered their biggest challenges.
Source: Deloitte and The Manufacturing Institute. "Unwavering Commitment: The Publics View of the Manufacturing Industry Today," (September 2011). Copyright 2012 Deloitte Development LLC, All rights reserved.

As most U.S. manufacturers look to regain momentum in the wake of the global economic crisis, they face some well-documented challenges starting with talent. For many, this isnt news. For years, manufacturers have reported a significant gap between the talent they need to keep growing their business, and what they can actually find. So Deloitte and the Manufacturing Institute recently commissioned a survey to dig deeper into this stubborn trend, asking U.S. manufacturing leaders questions such as

What impact is the skills gap having on company performance? How is it evolving in the face of continued economic and competitive challenges? Which manufacturing jobs are being affected the most? What does the future of talent look like? What trends are manufacturers preparing for today and how?

A look at our results turns up some surprising insights into the talent gap and how surveyed manufacturers are responding. Here are some highlights in addition to those included in the accompanying graphic that should be of interest to anyone whose business is affected by the fortunes of U.S. manufacturers.1 Among the hardest jobs to fill are those that have the biggest impact on performance. Shortages in skilled production jobs such as machinists, operators, craft workers, distributors, technicians, and more are taking their toll on manufacturers ability to expand operations, drive innovation, and improve productivity. Seventy-four percent of respondents indicated that workforce shortages or skills deficiencies in skilled production roles are having a significant impact on their ability to expand operations or improve productivity. Unfortunately, these jobs require the most training and are traditionally among the hardest jobs to find existing talent to fill. High unemployment isnt making things any easier. Theres no way around it: respondents report, on median, that 5 percent of their jobs remain unfilled simply because they cant find people with the right skills. Translated to raw numbers, this means that as many as 600,000 jobs are going unfilled a remarkable fact when the country is facing an unemployment rate that hovers around 9 percent.2 Respondents report that the national education curriculum is not producing workers with the basic skills they need. Manufacturing work is changing so quickly that its harder for talent to keep up. Over the past five years, most manufacturers have redesigned and streamlined their production lines while implementing more process automation. In short, as the industry has changed, the nature of work that it requires

is changing as well. And its happening fast, which leaves manufacturers expecting more from their employees. Unfortunately, respondents report that the number one skills deficiency among their current employees is in the area of problem-solving skills, making it difficult for current employees to adapt to changing needs. Whats next for U.S. manufacturers? The skills gap is an issue that has reached the boiling point for manufacturers and the same old approaches arent enough to close it. Manufacturers should pursue more creative approaches to recruitment and talent management to make sure they have the skilled personnel they need to win in the future. The same goes for developing existing talent new performance tools and formal processes can have a big role to play in any talent management plan. The industry will need help from private-public collaborators, and educational institutions as well. Students need a clear path for attaining the required skills and training to prepare for a career in manufacturing. Thats easier said than done in an industry environment that is evolving faster than at any point since its beginning. While daunting, these challenges are surmountable. The U.S. has one of the largest, strongest manufacturing industries in the world, and has demonstrated an ability to innovate and adapt time after time. Now its time to flex those muscles. For more information, please contact: Thomas Morrison Principal Deloitte Consulting LLP +1 215 246 2449 Join the conversation at

Deloitte and The Manufacturing Institute. "Unwavering Commitment: The Publics View of the Manufacturing Industry Today," (September 2011) 2

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, Deloitte means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.. Copyright 2012 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited