(In part one of this series, we explored the growing skills gap in manufacturing and its impact on industry growth. Now, in part two, we examine how manufacturers are moving beyond conventional approaches to talent acquisition and development.)
Key Points:
- Manufacturers are actively building talent ecosystems through partnerships – 94% of surveyed US manufacturers are forming partnerships (averaging 4+ organizations) to improve job attraction and retention.
- Companies are leveraging multiple partnership types, from K-12 education programs to state-level training initiatives and apprenticeships.
- Manufacturers are finding success with non-traditional talent sources like second-chance hires, refugees, veterans, and people with disabilities.
Many companies have had to move beyond traditional talent approaches and innovate to improve their talent strategies. As one executive says, “We’ve had to break a lot of paradigms and change our mindset to adapt.” But manufacturers are no strangers to breaking paradigms: The industry is the leading sector in the United States for innovation, accounting for 53% of all private-sector research and development. Increasingly, manufacturers seem to be leveraging this innovation foundation to implement an ecosystem approach and improve worker experience.
The study conducted by Deloitte and The Manufacturing Institute corroborates that most manufacturers are establishing ecosystems to help expand their talent pool and develop the requisite skills. Ninety-four percent of the 200 surveyed US manufacturers indicated that they are forming at least one partnership to improve job attraction and retention. On average, respondents say they are partnering with four or more organizations to form an ecosystem. So, what partnerships are some manufacturers forging and how are they leveraging these to help overcome talent hurdles?
Partnerships to build awareness of manufacturing careers and opportunities
- Manufacturing companies are leveraging National Manufacturing Day to provide facility tours, which studies show can effectively increase student interest in manufacturing careers
- Companies are actively engaging with K-12 schools through presentations and equipment donations to promote manufacturing career opportunities and support skills development
- Industry partnerships are creating hands-on learning programs, like the American Welding Society’s equipment grants and work-based learning initiatives, which have shown success in recruiting students into manufacturing careers (e.g., one flooring manufacturer reported 100% retention of graduating seniors in 2023)
Partnerships to build, leverage, and support training programs
- States are implementing manufacturing career pathways and workforce training programs like Georgia’s QuickStart and Virginia’s Talent Accelerator Program to attract and retain businesses
- Public-private partnerships are emerging, such as:
- Manufacturers partnering with Goodwill for digital skills training and talent sourcing
- The Greater Wichita Partnership’s collaboration with industry and education stakeholders
- Apprenticeships and work-study programs are growing significantly:
- Advanced manufacturing apprenticeships tripled to 59,500 in fiscal 2023
- The FAME (Federation for Advanced Manufacturing Education) program, which was started by started by an automotive manufacturer build regional pools of maintenance technicians and later transferred to The Manufacturing Institute to expand national reach operates in 14 states with 40 employer-led chapters and has produced 1,800+ graduates since 2012 with 90% placement rate
- The Inflation Reduction Act’s tax credits for hiring apprentices may further boost these programs
Partnerships that look beyond the traditional talent pipeline
- Second-chance hiring for formerly incarcerated individuals: Many manufacturers are hiring formerly incarcerated individuals, benefiting from reduced attrition and a more committed workforce. A packaging manufacturer, for instance, has 70% of its workforce from second-chance hires and reports 25% lower attrition rates. Studies show 82% of managers find these employees add significant value, and companies can receive tax credits up to $2,400 per hire.
- Hiring refugees and immigrants: Companies partnering with local organizations and resettlement groups to hire refugees and immigrants report higher retention rates and community impact. An industry executive noted, “In the past, we said you had to be fluent in English, and we were missing out on a very hardworking, committed workforce. We teamed up with our local community partners and have been able to access a diverse group of refugees and immigrants from Afghans to Cubans, to other Spanish-speaking populations. It’s been tremendously successful—the retention rate is significantly better than other populations—it’s 76%. We are also developing an app so that they have access to translation available at their fingertips.”
- Veteran hiring programs: Nearly one-third of manufacturers partner with organizations supporting veterans, whose military experience provides valuable technical, leadership, and communication skills. Programs like The Manufacturing Institute’s Heroes MAKE America help bridge the gap between military and civilian work by offering veterans industry-specific training and certification, making it easier for companies to connect with skilled veteran candidates.
- Workplace accommodations for individuals with disabilities: Skilled manufacturing roles, like CNC machine operators, can be a good fit for people with unique abilities, including neurodiverse individuals or those with physical limitations. Partnerships with community organizations enable direct hiring and contract services for individuals with disabilities. Digital technologies and robotics expand job options, allowing remote monitoring roles for those with physical limitations. Of the 33 million working-age Americans with disabilities, only 9.1% are employed in manufacturing.
The road ahead
Manufacturers are taking an active role and applying an innovative mindset to address talent challenges that face the industry. The approaches will likely continue to be needed as manufacturers compete for workers in the current labor market. To help address the skills gap and the applicant gap, companies should consider leveraging an ecosystem approach to attract more workers to the industry and provide them with the skills they need. However, the manufacturing industry is poised for growth in the next decade and the challenge is not just finding and upskilling the people needed to take on the approximately 3.8 million projected possible new jobs, but also retaining them. Workers’ experiences can not only shape their professional journey but can also foster an inclusive and collaborative workplace that can help increase employee retention.
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