A new survey shows that the impending retirement of millions of baby boomers, coupled with a lost generation of factory workers, is causing a costly skilled labor shortage for U.S. manufacturers.
View more content on PlantServics.com
The need to replace these lost, skilled workers has grown from a concern to a crisis in just three short years, according to surveyed manufacturing executives. They say the shortfall will cost the adverage company over $52 million, while some of the nation's largest companies, who report more than $1 billion in annual revenue, are anticipating losses of nearly $100 million.
The benchmark survey was commissioned by Advanced Technology Services, Inc. (ATS) and conducted by Nielsen Research. The survey polled 100 senior manufacturing executives, representing companies with revenue between $10 million and $1 billion, who were asked: Forecasts indicate that during the next five years, approximately 40% of your skilled labor force will retire. What do you anticipate the retirement of 40% of your skilled labor force will cost your company in these five years?
Of those surveyed, 81% of respondents said they would be affected by the shortage, versus 68% three years ago, illustrating a growing concern amongst manufacturing executives. Further, they calculate the lack of an adequate replacement pool will cost them an average of $52.2 million each, compared with an average of $50 million when asked in 2005. For companies with more than $1 billion in annual revenue, 44% say the shortage will cost them more than $100 million over five years.
"As manufacturing becomes more sophisticated, technical and precise, and as an entire generation of experts retires, we are recruiting the cream of the crop to do more than fill the gap, but to give manufacturers an edge," said Jeffrey Owens, President of ATS. "Those skills are particularly critical in maintaining plant assets and for keeping the factories running better, particularly during an economic downturn."
ATS is a privately held factory services company that's created a growth-niche since spinning off from Caterpillar 20 years ago. The company is on track to achieve record revenue this year, up double digits despite a slumping economy. ATS provides the skilled workers to perform sophisticated maintenance on production machines. Not only does ATS fulfill a gap in staffing, their work makes factories so efficient that, in many cases, plants are able to double their production capacity.
The ATS white paper, Workforce Trends: Tools for taking control of today's skilled labor shortage, provides guidance on what companies can do to stem the tide. Workforce Trends illustrates the benefits — immediate and long-term — to be found in taking proactive steps to recruit, train and promote a multi-skilled labor force. It enumerates the steps ATS takes to satisfy two significant needs facing U.S. industry: providing the hard-to-come-by talent to work in factories; and making factories more productive in-house, so that manufacturers won't look elsewhere for less-expensive production alternatives. Visit www.advancedtech.com/workforce to obtain a copy.
ATS customers who have benefited from significantly increased factory productivity, skilled labor fulfillment and improved competitiveness include Caterpillar, Eaton, Honeywell and Fortune Brands.