THOMASNET.com Press Releases
SURVEY FINDINGS | NOVEMBER 2014
THOMASNET® SURVEY SHOWS
BUSINESS TRENDING UP FOR
MANUFACTURERS
But Will Progress Be Sustainable Without an Infusion
of Younger Workers?
EXECUTIVE SUMMARY
The news for the general economy may be mixed, but for manufacturers it's "all systems growth." Thomasnet's annual Industry Market Barometer® survey of North American manufacturers shows an upward trajectory for this sector, year after year, as they continue to lead the economy forward. These companies are growing, hiring, adding new lines of products or services, and investing for more growth to come. More than half (58 percent) grew in 2013, and 63 percent expect to grow by the end of 2014.
Positive indicators are everywhere. Manufacturers are getting more business from their existing markets, and their average account values are rising. Nearly eight out of ten (76 percent) are now selling overseas, and 33 percent of them expect this to rise, too. In anticipation of what's ahead, they're increasing their production capacity, optimizing their manufacturing operations, and upgrading their facilities. Hiring and retraining staff are top priorities to help them scale. More than half (52 percent) of these manufacturers expect to add staff over the next several months, up from the 42 percent who planned to hire last year.
Troublesome Trends
A deeper look at this year's survey results raises concerns about whether manufacturing is sufficiently prepared to handle continued growth. For the industry to sustain its steady climb, all the fundamentals need to be in place, and one of them is missing - a robust pipeline of skilled workers. Having the people to operate the machines, work the lines, and create new products is mission-critical. Yes - manufacturers are hiring and developing their people - but to keep up with the opportunities at hand, they will need to recruit faster, smarter, and harder.
Last year's IMB called attention to the "ticking biological clock" - the disruption that is coming as Baby Boomers leave the workforce in accelerating numbers, without people primed to replace them. This year, 38 percent of manufacturers report that they'll leave their jobs in one to ten years, and most lack a plan to fill their shoes.
And with over 200,000 jobs still unfilled, manufacturers can't afford to wait for new talent to walk in the door. They tell us they need skilled, experienced people - line workers, skilled trade workers, engineers, and manufacturing/production management - and they're nowhere to be found. If last year was a ticking clock, this year is ringing alarm bells.
Yet, one solution is in plain sight - formulating plans to attract the generation of Millennials (ages 18-32) who will comprise about 75 percent of the workforce by 2025. For an industry that values specialized training and experience, this generation represents a goldmine of opportunity as most Millennials are technology-savvy. Manufacturing is increasingly headed towards digitization and very much reliant on this skillset. Whether changing careers or just entering the workforce, they can take the time to learn the business before their predecessors retire. Yet, most manufacturers (62 percent) say Millennials represent a small fraction of their workforce, and eight out of ten (81 percent) have no explicit plans to increase these numbers.
Baby Boomers' Perceptions of Millennials Impede Their Own Growth
This year's data shows that the manufacturing industry increasingly aligns with Millennials' value systems and technology expertise. The research demonstrates that Millennials have an opportunity to make a social impact working with sustainable and green technologies, solar energy, and wind power. In addition, respondents cite innovations in design and manufacturing software, automation/robotics, and 3D printing as intrinsic to today's jobs.
Eighty percent of IMB respondents are Baby Boomer age or over. On the one hand, these manufacturers don't see their industry as a place for Millennials. 46 percent of respondents say that a larger issue is at work - younger people still perceive manufacturing as "blue collar" work. And Baby Boomers' perceptions of Millennials exacerbate the challenge. Forty-three percent of respondents believe that this generation lacks the work ethic and discipline to succeed.
One bright spot that can help bridge intergenerational barriers is apprenticeship programs. Last year's IMB respondents were advocating for them, and this year, a small number are using them to teach skilled trades such as machining, production, assembly, CNC milling and turning, and welding. Manufacturers see these programs as a way to fill skill gaps and get new talent into place. But until misunderstandings on both sides are erased, the manufacturing community won't be able to fully participate.
In short, the manufacturing sector is at a crossroads. To take its rightful place as a growth leader, this sector must embrace the future workforce that will get them there. The path has been laid for them to succeed, and the question is whether they'll act in sufficient time. The glory days for American manufacturing could be back again, for years to come. Closing the gaps between Baby Boomers and Millennials is critical to making this happen.
