WASHINGTON DC  The Manufacturing Institute and Deloitte’s new report, Taking charge: Manufacturers support growth with active workforce strategies,” examines the workforce challenges that manufacturers are facing as well as the investment and skills likely required to drive continued growth across the industry.

The U.S. manufacturing industry has emerged from the pandemic on a strong growth trajectory and continued growth is expected over the next 10 years as companies work to meet evolving customer demands, de-risk their supply chains and leverage government incentives and policies. Despite substantial growth in the sector, U.S. manufacturing faces a skills gap and tight labor market.

More than 9 in 10 surveyed manufacturers said they are forming at least one partnership to improve job attraction and retention, and on average, they are partnering with four or more. The top five partnership types among respondents are with: technical colleges (73%), industry associations (58%), universities (48%), state and regional economic development agencies (47%), and K-12 schools (44%). Many partnerships are geared towards building, leveraging and supporting training programs — helping address the needs to develop new talent. Nearly half (47%) of those surveyed in research by Deloitte and the MI indicated that apprenticeships, work studies, or internships at manufacturing companies would be the most effective way to increase interest in manufacturing as a career choice.

Key takeaways:

  • The U.S. manufacturing industry could see a net need for as many as 3.8 million jobs between 2024 and 2033 as significant investment continues to drive growth.
  • Without significant changes, more than 5 in 10 or 1.9 million of these jobs could go unfilled if workforce challenges are not addressed through 2033.
  • Sixty-five percent of respondents said attracting and retaining talent is their primary business challenge.
  • Investments in skills and strategies that address the workforce’s evolving expectations, including flexibility and technology, could be pivotal to how manufacturers position themselves for success.

Manufacturers are increasing and varying investments to meet the needs, skills requirements and values of the evolving workforce, while also creating strategies to increase existing employee retention. As retiring Baby Boomers are replaced by incoming millennials and Gen Z workers, the industry should invest in strategies aligned with workforce expectations, including more flexibility. Nearly half (47%) of respondents in Deloitte and the MI’s study indicated that flexible work arrangements (including flexible shifts, shift swapping and split shifts) is most impactful for retaining employees. Employees are 2.7 times less likely to leave the organization in the next 12 months if they feel they can acquire necessary skills that are important for the future, according to Deloitte research.

“Manufacturers recognize that the workforce is evolving. Pandemic-driven shifts have already created hundreds of thousands of new jobs, and now we are seeing increased demand for digital skills that need to be met or risk further widening of the talent gap,” said Manufacturing Institute President and Executive Director Carolyn Lee. “Companies must prioritize technology, training and talent development, and the investments that are driving growth will also require the industry to build out a talent ecosystem. With investments in partnerships, apprenticeships, and education, and prioritizing a more diverse and inclusive workforce, a whole host of new talent will be on the factory floor and driving the next wave of growth.”

According to the study, workforce challenges are among the top concerns for U.S. manufacturers, and have been since Q4 2017, except during the pandemic. The MI and Deloitte projects that as many as 3.8 million additional employees could be needed in manufacturing between 2024 and 2033. Filling open positions — and keeping them filled — is a top concern for many manufacturers, 65% of respondents in the National Association of Manufacturers’ 2024 Q1 outlook pointed to attracting and retaining talent as their primary business challenge. As the need for higher-level skills grows, the MI and Deloitte predicts that as many as 5 in 10 of the skilled open positions, 1.9 million jobs could remain unfilled if manufacturers are not able to address the skills and applicant gaps.

“The manufacturing industry is facing exponential opportunity, yet still should prioritize strategies that will address the skills and applicant gap, especially as the acceleration of digital skills-based jobs continues,” said John Coykendall, principal, Deloitte Consulting LLP, and vice chair, U.S. industrial products and construction leader. “Developing talent — both from within the existing employee base and those newly entering the workforce — is important to keeping up with the pace of continued innovation. Companies who invest in upskilling the workforce through training, technology and policies that meet employee expectations are well-positioned for future growth.”