an image of a welder at work as part of the US skilled labor shortage in manufacturing

4 Key Components Of The US Skilled Labor Shortage

This article was previously published on the Epicor Shop Floor – you can read the original post here. The

This article was previously published on the Epicor Shop Floor – you can read the original post here.

The Fourth Industrial Revolution—also called Industry 4.0—is already having a huge impact on the manufacturing industry. It leverages some of the most exciting technologies of today—including big data, artificial intelligence and robotics. Unfortunately, a massive skilled labor shortage in the manufacturing sector is threatening the promise of Industry 4.0. Understanding the ins and outs of the problem will help businesses minimize their impact. Here are four aspects of the skilled labor shortage in manufacturing that are worth evaluating.

1. The Skills Gap In A Skilled Labor Shortage

According to a 2018 Deloitte study, job opportunities in manufacturing have been growing at an impressive double-digit rate since mid-2017.

However, the report warns of a skills gap. Industry 4.0 is creating tech-heavy jobs that are not readily available from current talent pools. Industry 4.0 is creating tech-heavy jobs that are not readily available from current talent pools. This will leave about 2.4 million positions unfilled between 2018-2028. Deloitte forecasts the potential economic impact of such a labor shortage in manufacturing to be USD $2.5 trillion.

Worse, it’s not manufacturing alone that needs data scientists and robotics engineers. These jobs are in high demand across a variety of industry sectors—including healthcare, education, and retail.

Companies are training from their existing employee base as one option. But a 2019 Global Human Capital Trends report found that internal mobility still presents a challenge for many enterprises.

2. An Aging Population

The Pew Research Center shared that 10,000 Baby Boomers will turn 65 every day up until the year 2030. The 72 million Boomers currently in the U.S. comprise a little more than a quarter of the population. The aging of this demographic can have a significant effect on the supply of skilled talent.

Even if an impressive number of Boomers are taking up entrepreneurship, they’re still not working in the kinds of jobs that manufacturing companies will be looking to fill.

3. Millennial Must-Haves

Given that Millennials are expected to outnumber Boomers (73 million to 72 million) in the United States this year, they’re the most obvious demographic to lean on for jobs. There’s mixed news on that front with respect to labor retention.

Gallup reported that Millennials are the most likely generation to switch jobs—6 in 10 are open to new opportunities. Other research shows that they’re not any more likely to do so than their predecessors—Gen X. Manufacturing companies can learn from research that shows that Millennials place high emphasis on workplace attitudes and managerial styles over other must-haves. Millennials will job hop even within companies to test out the best fit.

4. A Growing Gig Economy

Workers are now acting as free agents by choice—making freelance work their primary source of income. About 20–30% of the working-age population in the United States and Europe take on some kind of independent work. The gigs either supplement income or are the primary source of revenue.

Such a significant shift can have repercussions on the labor shortage in manufacturing. Employers might have to retool jobs to the freelance or contract model to make opportunities more attractive to the right talent.

As these skilled labor shortage statistics show, the United States needs the right talent to truly ride the next Industrial Revolution to success.

About Encompass Solutions

Encompass Solutions, Inc. is an ERP consulting firm, NetSuite Solution Provider and Epicor Gold Partner that offers professional services in business consulting, project management, and software implementation. Whether undertaking full-scale implementation, integration, and renovation of existing systems or addressing the emerging challenges in corporate and operational growth, Encompass provides a specialized approach to every client’s needs. As experts in identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.


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