Manufacturing Labor: A Generational Challenge for US Manufacturers

Finding great people amidst a widespread labor shortage is one of the biggest challenges facing the current generation of manufacturers. And if the recent push to reshore manufacturing services to the United States is as successful as experts predict, there’s a clear imperative to overcome labor-related obstacles fast. 

As the reshoring wave advances upon the US, more and more manufacturers are opting for deglobalization and bringing manufacturing work back within American borders. Assuming that trend stays steady, we can expect a 2x increase in the industrial base over the next decade—that is, if enough people can be drawn into manufacturing careers.

Multiple factors are responsible for manufacturing’s rapid reshoring, including: 

• Increasing labor costs in China and other labor centers
• Growing demand for manufactured products
• Ongoing global supply chain risks 
• Calls for accelerated responsiveness in high-demand locales

Reshoring by the Numbers

According to Harry Moser, founder of Reshoring Initiative, 2021 welcomed a 38% year-over-year increase in reshored manufacturing services. Of the 220,000 US manufacturing jobs added during that 12-month period, 62,500 are directly attributable to growing consumer demand for:

• Electronic chips
• Personal protective equipment (PPE)
• Electric vehicle (EV) batteries
• Pharmaceuticals
• Rare earth metals

Moser foresees continued growth of reshored manufacturing, which could introduce 2.5 million new manufacturing jobs to the American economy within the coming decade, an estimate rooted in the conservative forecast that product reshoring will increase by only 10%.

This modest 10% increase in product reshoring would drive manufacturing job growth upward by 20%, and most economists agree that the growth will exceed these expectations.

At the industry’s height in the late 1970s, US citizens held approximately 20 million manufacturing jobs. By 2010, manufacturing employment had dropped to 11.5 million. The subsequent decade saw manufacturing jobs increase to 12.5 million, and the upcoming decade’s anticipated 20% growth would expand the industry’s employment opportunities to 15 million workers in manufacturing careers.

On the surface, news of millions of additional manufacturing jobs is incredibly exciting. Generations of Americans owe their stability and success to the manufacturing industry, where skilled labor is well-compensated and adjacent opportunities abound.

But the current labor market is strained, with manufacturing services hit particularly hard. Labor shortages are already squeezing productivity at US manufacturing companies, even with automation solutions like robotics picking up some of the slack.  

If manufacturing reshoring and job growth are to continue, manufacturers must adopt a clear talent strategy.

3 Talent Strategy Considerations for US Manufacturers

Is your manufacturing business prepared for the coming growth? Incorporate these three considerations into your talent strategy so that you don’t get left behind: 

1. Tap into overlooked talent pools

Manufacturing companies will need to look beyond the current workforce if they intend to staff for the future. Smart employers are already tapping into talent pools previously overlooked by manufacturers:

• Women. Though women currently occupy 43-44% of manufacturing industry roles, there is still plenty of room to recruit more women into our workforce.
• Workers from complementary industries. Manufacturing-adjacent industries such as construction present excellent opportunities for hiring. Physical laborers are a natural fit for the demands of the manufacturing world. 
• Students seeking college alternatives. As education costs soar and graduates consider alternatives to college, manufacturers should consider ways to target and inspire motivated young people. Apprenticeships have a long history of attracting, training, and employing young talent.
• Experts from other countries. Despite the highly politicized nature of today’s immigration conversations, manufacturers would be remiss to overlook the potential of manufacturing professionals outside the US. What could we accomplish with policy changes that reward skilled manufacturing workers seeking US employment?
• Young students. Family farms once prepared large numbers of young people to work in manufacturing and similar industries. The reintroduction of shop classes in schools could help establish a pipeline of manufacturing talent beginning in grade school.
• Emerging Gen Z professionals. Today’s Gen Z-ers are in their early twenties and entering the workforce. Thoughtful outreach can draw these job seekers into lifelong careers in manufacturing services.

2. Cultivate desirable work environments

How can you establish your company as a great place to work? Should manufacturers “rebrand” their industries to attract top talent? 

Competitive pay and benefits are obvious must-haves, but manufacturers should also consider ways to support employee advancement and continuing education. Born into a culture defined by agility and individualism, today’s workers are more interested than ever in careers that will not stagnate over time. 

Cross-generationally, employees are especially driven toward careers that prioritize people over productivity. Wellness is more than a buzzword in today’s workplace; it’s an indicator of company values. Workers are unwilling to be another cog in the machine. They want to know that their employer sees them as whole humans with purpose outside the workplace, and jobs with opportunities for personalization and flexibility are especially desirable.

You may assume that wellness-focused workers care less about the work itself, but the opposite seems to be true. Companies that pursue charitable giving alongside their for-profit purpose are more attractive to modern workers. They also generate goodwill among customers who prefer to spend their money with businesses that prioritize “give back”

 initiatives.

3. Keep your thinking fresh

Your talent strategy should be ever-evolving. In a dynamic world, you can’t afford to think rigidly. It’s time for manufacturers to embrace updated perspectives and align with the next generation of machinists, engineers, programmers, and other manufacturing professionals. 

The Advantage Goes to the First Movers

Don’t wait until your company is frantically swimming against the reshoring tide. Start developing and implementing your talent strategy immediately. 

Move too slowly, and you will find yourself on the outside looking in. A massive wave of work and wealth is headed for US manufacturing, and proactive, progressive companies will most certainly reap the rewards.

Learn more about the reshoring movement on our podcast, Manufacture Houston, or contact us to discuss your next contract manufacturing project!