Already battered by the recession, manufacturers are concerned a wave of retirements across their industry will saddle them with a shortage of qualified job applicants, huge training costs for new workers and the challenge of transferring job knowledge from one generation of workers to the next, according to a new report by the Sloan Center on Aging and Work at Boston College.
“One strategic means of addressing future talent shortfalls is to identify and introduce flexible work arrangements, such as flexible work schedules, career breaks or job sharing.”
“In many ways, the aging of the workforce will be like a tide, drawing the talents of older workers out of the labor force,” said Stephen Sweet, co-primary investigator for the (2009) Talent Management Study and co-author of “Talent Pressures and the Aging Workforce: Responsive Action Steps for the Manufacturing Sector.”
In a survey of employers, three top concerns emerged. Of the manufacturers surveyed, 45.1% cited recruiting competent job applicants as a top concern, 30.3% cited low skill levels of new employees, and 28.8% said knowledge transfer from experienced to less experienced employees is a major issue.
Since 2000, the US has lost millions of manufacturing jobs, according to the Bureau of Labor Statistics. Yet the pool of retirees has swelled as the percentage of workers aged 55 and older working in manufacturing increased significantly.
For a sector trying to resuscitate itself, retiring workers will take their valuable talents with them. Top skills in short supply include: Management (according to 37.4% of employers), legal (33.3%), sales/marketing (28.2%), operations (24.4%), and technical/computer (22.1%).
The median cost of replacing employees in the manufacturing sector is $5,000 per employee, compared to $3,000 per employee in other sectors.
“One strategic means of addressing future talent shortfalls is to identify and introduce flexible work arrangements, such as flexible work schedules, career breaks or job sharing,” Sweet said. “These will enable employers to hold on to the workers they have while attracting workers they need.”
However, manufacturing firms appear even less prepared for the impending labor and skill shortage than employers in other sectors. A lower percentage of manufacturers have analyzed the projected retirement rates (17%) or developed succession plans to a moderate/great extent (26%), compared to employers in other industries (25 and 39% respectively).