The One Thing That Could Destroy U.S. Manufacturing

Just as manufacturing is starting to boom again, business owners are facing a worker shortage. If they can't get Generation Y interested, manufacturers' bright future could quickly go dark.
CEO, Small Business Trends LLC
October 07, 2013

Remember when U.S. manufacturing was a dying industry? Not anymore. After a slump during the Great Recession, small and midsized U.S. manufacturers became an unexpected bright spot on the economic horizon. Last year, more than half of all small and mid-sized U.S. manufacturers grew, according to ThomasNet.com’s latest Industry Market Barometer (IMB), which also reports that manufacturing is on an even bigger growth trajectory for 2013. 

But there are some threatening clouds on the horizon. Despite the short-term optimistic outlook, small and midsized U.S. manufacturers face threats that could put them at risk in the long term. And what’s really sad is that some of these threats are of their own making. 

First the good news: The IMB survey of 1,200 U.S. manufacturers, the majority of which have 100 or fewer employees, showed that they're growing, hiring, investing and innovating, capitalizing on technology to reinvent themselves. And it’s working: More than half (55 percent) report their businesses grew in 2012, nearly two-thirds (63 percent) predict growth this year, and almost seven out of 10 (67 percent) plan to introduce new, innovative products and/or services this year. 

Survey respondents credit this success to their brands, technology, innovation and people—and in that last answer lies the rub. While 74 percent of surveyed manufacturers say employees are far and away the most important asset helping them compete, 78 percent of those valuable employees are 45 and older. Of those, 35 percent are between the ages of 55 and 64. 

Wanted: Younger Workers

There’s a dangerous disconnect between manufacturers’ embrace of new technology to stay innovative and their failure to bring Generation Y on board to help them do it. Even though Generation Y is projected to account for 75 percent of the workforce by 2025, three-quarters of manufacturers in the survey say just 25 percent or fewer of their workers are in that age group. And while 29 percent of respondents say they'll increase employment of Generation Y workers in the next two years, almost one-half (49 percent) don’t expect to do so. 

Some 42 percent of companies surveyed report plans to hire this year, and of these, some are actively making efforts to find younger employees. Internships and apprenticeships are key venues from which manufacturers draw younger workers; they also rely on connections with technical schools and community colleges, as well as having a presence at high school or middle school career fairs. 

But even when manufacturers make attempts to hire younger workers, they’re frequently stymied by outside factors. Nearly three-fourths of survey respondents believe that negative perceptions about manufacturing careers discourage young people from working for them. These negative perceptions are widespread among the general population in the United States and are often passed on from parents to their kids. 

Then there’s the issue of skills and preparedness. Companies say that even when young workers have an interest in manufacturing jobs, many of them lack the basic skills needed to succeed in those jobs.

Fixing The Problem

So what can be done? More than one-fourth of companies think high schools should offer more technical training to encourage students to pursue manufacturing careers and should also place more emphasis on STEM (science, technology, engineering and math) courses. In addition, they believe that more partnerships between manufacturers and colleges or technical schools would help make students aware of opportunities in manufacturing. 

Many manufacturers are taking steps to make this happen by forming creative relationships with local colleges, universities and high schools. Stepping up to take responsibility for educating, attracting and developing training programs for younger workers may seem like going above and beyond the call of duty, but if manufacturers don’t want their bright future to go dark 10 years from now, it’s what’s they'll have to do to keep things on track. 

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Photo: Getty Images

CEO, Small Business Trends LLC