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Skills gap unlikely to prevent near-term resurgence in U.S. manufacturing

The U.S. skills shortage will be far less of a problem than many people believe in the short term, and it is unlikely to prevent a resurgence in U.S. manufacturing in the next few years, according to a report by The Boston Consulting Group (BCG).
By Modern Materials Handling Staff
September 25, 2013

The U.S. skills shortage will be far less of a problem than many people believe in the short term, and it is unlikely to prevent a resurgence in U.S. manufacturing in the next few years, according to a report by The Boston Consulting Group (BCG). The report is titled “The U.S. Skills Gap: Could It Threaten a Manufacturing Renaissance?”

“Is the U.S. really facing a manufacturing-skills crisis?” the report asks. “We believe such fears are overblown—at least for the near term. Our research finds little evidence of a meaningful and persistent skills gap in most parts of the U.S., including in its most important manufacturing zones.”

“The real problem,” it continues, “is that companies have become too passive in recruiting and developing skilled workers at a time when the U.S. education system has moved away from a focus on manufacturing skills in order to put greater emphasis on other capabilities.”

The following key findings are based on an analysis of job vacancy and wage data, as well as on a BCG survey of 100 companies with U.S. manufacturing operations.

In the short term:

—The U.S. is currently short around 80,000 to 100,000 highly skilled manufacturing workers. But those numbers represent less than 1 percent of the nation’s total manufacturing workforce and less than 8 percent of its highly skilled workforce of approximately 1.4 million.

—The skilled-worker shortages that exist in the U.S. are localized. Only 5 of the nation’s 50 largest manufacturing centers—Baton Rouge, Louisiana; Charlotte, North Carolina; Miami, Florida; San Antonio, Texas; and Wichita, Kansas—appear to have significant or severe skills gaps. Ninety percent of the biggest manufacturing areas do not show evidence of significant manufacturing-skills shortages.

In the long term:

—Companies are not doing enough to cultivate a new generation of skilled manufacturing workers in the U.S. Manufacturers have scaled back their in-house training over the years, and they underutilize important sources of new talent such as high schools and community colleges.

—The retirement of aging workers, as well as heightened demand for workers, could cause serious skilled-labor shortages in the U.S. By 2020, the nation could face a shortfall of around 875,000 machinists, welders, industrial-machinery mechanics, and industrial engineers, according to the U.S. Bureau of Labor Statistics and BCG estimates.

—Companies, schools, governments, and nonprofits must do much more to identify, recruit, train, and employ skilled manufacturing workers. A wide array of collaborative programs already exists across the U.S. But these programs are not nearly sufficient.

“Quite often, the skilled workers are available—just not at a price employers are willing to pay,” explained Harold L. Sirkin, a BCG senior partner and coauthor of the research. “Or companies do not bother to recruit at community colleges and vocational schools. In other instances, experienced skilled workers with good academic training are available—sometimes in-house—but companies are unwilling to invest the time and money to train these workers to use new technologies or specific machines.”

Michael Zinser, a BCG partner who leads the firm’s manufacturing practice in the Americas, added: “Investment by the public and private sectors in skills development needs to increase and accelerate. Companies can meet many of their needs on their own through more aggressive recruiting and training. These efforts must be supported by a nationwide program of science, technology, and engineering training to ensure that there will be sufficient skilled workers in key trades.”

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