The Skilled Labor Shortage and its Impact

Eric Dininger
December 2nd, 2016
Brandman University

The skilled labor shortage is not a new issue but it hasnt been solved yet either. Going
back to the early 1990s, the skills-gap has been widening. The gap combined with retiring babyboomers creates a difficult time to go into the manufacturing industry. Over the next decade,
nearly three and a half million manufacturing jobs will likely need to be filled, and the skills gap
is expected to result in 2 million of those jobs going unfilled. (Collins, 2015) That means we
will only have 43% of our skilled labor positions being filled with qualified candidates. Not to
pour salt on the wound but Mike Resetarits, of Fractional Research Inc., looks at the statistics in
a very ominous way. He estimates, that 10,000 workers a day for the next 20 years will be
leaving the workforce. That means were losing 400,000 years per day of experience. (Varva,
2013)
Isnt job demand a good thing? Yes, it is usually a good thing but not when we cant
support the work load with domestic employees. If employers cant find domestic employees,
then they will take their business elsewhere or outsource the work. No one wins if that
happens. The skilled work force wages get pushed down when they must compete against
outsourced labor. The employers get a lower quality product from using cheap foreign factories
and the company sacrifices their image. We need to evaluate the past, recognize the present, and
prepare for the future.
How have we addressed this issue in the past? We trained new members of the workforce.
Manufacturing companies offered in-house technical training or apprenticeships. There are a
couple of issues with this. The first is that those positions only offered slightly more pay than
McDonalds and other entry-level jobs. The second is that companies dont see very much return
on investment. Employees that go through an apprenticeship program are not likely to stay very
long after it is completed because of the demand for their new skills. So, at times, companies

would invest in training an employee only to see them being lured away other companies that
didnt employ apprenticeships.
Plantengineering.com performed a Workforce Development Study in 2014 to determine
how small facilities (less than 250 employees) were handling the shortage of skilled labor. The
results were packed with shocking statistics. 62% of small facilities are experiencing a skilled
workforce shortage and 40% reported at least 8% (6.6% average all respondents) of their current
positions were unfilled. (2014 Workforce Development Study) Those numbers indicate that if a
facility has 200 employees there would be an average of 13 skilled labor positions unfilled. If
you estimate that they have enough work for each employee to work 40 hours a week when fully
employed, then the remaining 187 employees would have to pick the extra 520 hours left by
unfilled positions every week. That stresses the employee, employer and their families.
For these facilities, it puts a high demand on their current skilled labor, often requiring
long hours and increased stress. 39% of smaller facilities are seeing an increase in the number
of employees retiring, and another 30% are expanding their manufacturing capabilities. Both of
these cases require facilities to seek out skilled workers to fill opening positions. (2014
Workforce Development Study) Where are these skilled laborers going to come from? The
respondents agreed, 54% of respondents in smaller manufacturing facilities believe that their
workforce shortage will only increase (in the next 3-5 years), while only 8% think this issue will
decrease. While this outlook is scary for employers, there is a wealth of opportunities for skilled
workers. Respondents also think that facilities should improve training programs (89%),
provide clear career paths for starting positions (78%), and increase starting pay (73%) in order
to increase the number of applicants. (2014 Workforce Development Study)

The demand for skilled labor is becoming more desperate, now facilities must compete
for employees (even at entry-level positions). Online recruitment is a useful tool to fill our entry
level skilled labor vacancies. Typically, these would-be advertisements or promoting
opportunities on social media apps like Facebook, Twitter, Linked-In etc. This is where
tomorrows workforce spends a lot of their time. So, it makes sense that we should promote our
opportunities here.
The president of MPC (Modern Processing Control) Consulting Michael Collins has an
interesting idea for the future of our skilled workforce. The typical factory today is very
automated; it is normal to have, programmable logic controllers, computers, robots, palletizers
and a host of other automatic packaging equipment. In my opinion, to troubleshoot, operate and
maintain this kind of equipment requires apprentice type training that will lead to a journeyman
level of skills. (Collins, 2015) Its possible that this type of technical skill could be a solution.
Adding an automation and troubleshooting apprenticeship and automating manufacturing
facilities could be the next evolution of the industrial revolution. Someday skilled labor wont
make a product; they will only support the automation that make the product. Unfortunately, that
isnt happening any time soon. In the meantime, the issue remains.
Skilled positions dominate the United States labor market. So why are they starting to
require a bachelors degree for the jobs? It shocks Ernie Stark (2016) too, he says, In seeking to
construct an answer to What are they thinking?, we acknowledge Larabees (2006) admonition
that simple themes are difficult to find in any complex social phenomenon and that management
scholars are increasingly directed toward attempts to weave discordant themes into complex
patterns in hopes of achieving harmony. This might be their plan but in the process, they are

scaring away potential future employees. That doesnt help the skilled labor shortage at all. It
hurts it.
If you are looking for employees that are already trained and have experience, then you
might want to look at a hiring a recruitment agency or head-hunter as the industry calls them.
Recruiters are paid to match the right employees to the right positions. This can be an effective
way to fill positions but does it address the underlying issue? No, this doesnt lessen the demand
at all. It merely moves skilled workers from one place to another. Thats like using a credit card
to pay the electric bill. Its a short-term solution to a long-term issue.
Considering all the above information, one solution provides hope. Employee loyalty
could be the lifeline that helps current and future employers. Employers need to create employee
loyalty thru wages, benefits, and social responsibility. Connecting with technical schools and
universities can be effective as well. Offering tuition-assistance and flexibility to employees
helps develop to do this. Industrial environments have gone away from investing in the advanced
training. We need to look beyond 4 year apprenticeships and in to life-long learning. After an
apprenticeship, there are countless other classes, courses, and certifications no matter what trade
it is. For example, a journeyman machinist can study heat treating theory or Computer Numeric
Controlled (CNC) machining. It isnt just investing in training; its investing in the employees.
Not only will it attract and maintain a steady stream of skilled labor, it will lower turnover,
increase morale and efficiency, and promote education. This helps keep current employees while
luring more interest in trade work.
This idea keeps pace with other countries that are experiencing similar issues, like Saudi
Arabia. They are proposing to combat the issue by emphasizing the development of their
community colleges that focused on life-long learning. (Almannie, 2015) Their community

colleges are now comparable to the United States but the proposal aims to invest more in to their
community colleges to develop the skills of their youth. Any way you spin it, the skilled labor
shortage will only get worse unless we revamp and reinvest in our training and education centers.

References
2014 workforce development study: skilled workforce shortage in small facilities. (2015). Plant
Engineering, (3), 25.
Almannie, M. (2015). Proposed Model for Innovation of Community Colleges to Meet Labor
Market Needs in Saudi Arabia. Journal Of Education And Practice, 6(20), 42-51.
Collins, M. (2015, April 16). Why America Has a Shortage of Skilled Workers. Retrieved
December 02, 2016, from http://www.industryweek.com/skilled-workers
Stark, E., & Poppler, P. (2016). What are They Thinking? Employers Requiring College Degrees
for Low-Skilled Jobs. SAM Advanced Management Journal (07497075), 81(3), 17-26.
Vavra, B. (2013). Training, mentoring needed to address skilled worker shortage. Plant
Engineering, (2), 15.