Manufacturers to spend $26.2 billion on ‘upskilling’ in 2020 to attract and keep workers

With a skills gap plaguing manufacturing in a historically tight labor market, companies are spending big to “upskill” their current workforce and ensure a pipeline of talent.

Manufacturers are set to spend $26.2 billion on internal and external training initiatives for new and existing employees in 2020 to combat the shortage of available workers, according to the Manufacturing Institute.

Nearly 70% of manufacturers said they are creating or expanding training programs for their workforce. Three-quarters of respondents said upskilling workers helped to improve productivity, promotion opportunities and morale.

“In manufacturing, you are constantly learning and growing, and the technological change is enormous,” said Carolyn Lee, the institute’s executive director. “What you are going to be able to continue to do as you layer new skills, on top of those fundamental skills, will make for a very interesting and dynamic career.”

The skills gap has been the No. 1 challenge for manufacturers for the past nine quarters, according to the National Association of Manufacturers’ Outlook Survey, which found the inability to attract and retain workers has been a top concern.

In the third quarter, nearly 80% of respondents said they are struggling to fill open positions. The lack of available workers has even forced one-third of companies to turn down business opportunities.

Protolabs, a rapid prototyping manufacturer based in Maple Plain, Minnesota, is looking to add about 70 workers to its workforce of 2,800.

“We are a growth company, and employees are critical to everything that we do. We want to be sure we can keep talent with us,” said Robert Bodor, vice president and general manager for the Americas.

While the company has been fortunate in retaining its workers, Bodor said the goal is to maintain a “good culture of continuous improvement.” So Protolabs is investing in training its existing workforce, as well as new hires. To attract workers in this job market, Protolabs is offering new and flexible models with part-time labor, in addition to offering training and benefits such as a 401(k) plan with an employer match, employee stock-participation plans, and more.

“We do both upskill and bring in new people all the time — we are continually hiring so we have to train and onboard new employees — but we are reinvesting in our employees to create career paths and opportunities for personal growth,” Bodor said. “Our employees are critical to our success, so we want to be creating longevity with them.”

Securing the pipeline of future talent is a key to success for manufacturers. Data from Deloitte and the Manufacturing Institute found that some 4.6 million workers will be needed in the sector by 2028, but that 2.4 million of those jobs could go unfilled if steps aren’t taken to ensure proper training. Lee calls recruitment a “full-court press.” The goal of the organization is to close the skills gap by 25% by 2025.

“We just need more people — period,” Lee said. “We have about 480,000 open jobs, and have been hovering around 500,000 openings in the past year after retirements and economic growth. We need to attract transitioning service members and veterans into the sector, and we need to bring the next generation of the workforce into the sector.”

Part of the recruitment efforts beyond training is showing potential hires the changes the sector has gone through — it’s not the manufacturing job of years past. Instead, its high-tech, clean, and can be lucrative for those who move up the ranks. Manufacturing Day, which was held in October, is part of that effort, where manufacturers across the country open their doors to students so they can see for themselves what a career in the sector is all about.

“You should know entering manufacturing that your employer is going invest in you, because you are their greatest resource,” Lee said.