Are talent ecosystems a solution to the challenges manufacturers face?

US manufacturers continue to struggle to find the talent they need in the marketplace. Amid a global pandemic and the first US recession in more than a decade, the unemployment rate remains stubbornly high in the industry. Our recent study, Creating pathways for tomorrow’s workforce today, conducted this year in collaboration with The Manufacturing Institute, highlights the workforce shortage many manufacturers face as they ramp up production following a year of pandemic-related disruptions. It also identifies the way skillsets are shifting in the manufacturing labor population, spurred in part by the move toward Industry 4.0. And, it highlights a core finding: given the lack of available talent, the simple demographic arithmetic makes clear that organizations cannot have a robust talent strategy without a robust diversity, equity, and inclusion strategy.

Finding qualified talent is harder than it’s ever been

Our study found that it is now 1.4 times harder to find qualified talent with the right skills than it was in 2018, the last time Deloitte and The Manufacturing Institute conducted the study. The study identifies a number of possible reasons. In particular, “middle-skilled” jobs are difficult to fill for many manufacturers. These jobs typically require some level of technical training or applied skills. Examples include computer numerical control (CNC) machinists, welders, and maintenance technicians. At the higher end of the experience, some of these jobs require more specialized skills. They often require a hands-on, applied training program that can take from eight weeks to more than a year to complete. Some also require licensing and certification.

Source: 2021 Deloitte and The Manufacturing Institute Talent Study

Expanding the number of trained resources requires providing pre-employment training in the same locations where there is demand and available workforce, matching people with available programs, and driving successful completion of programs that can take months, often without pay. Getting this to occur seamlessly is difficult, and it provides a considerable opportunity for industry participants to work together to solve. Among the potential solutions is adding capacity to train future skilled workers, and, more importantly, broadening the talent pipeline to directly engage a more diverse population to expand the breadth of the industry. Talent ecosystems could also be a solution.

Talent ecosystems can be part of the solution

A talent ecosystem is formed when different entities come together in meaningful ways to solve shared challenges and meet shared objectives, in this case, related to the workforce in the industry. Effective talent ecosystems enable a cumulative “network” effect for participants and create value greater than the sum of parts, driving higher performance and creating exponential results. Underlying all of this is the concept of collaborating and coevolving. A talent ecosystem could include the following parties: manufacturers, suppliers, academia, apprenticeship programs, government programs, technical training centers, and employment service providers. By working collectively, these talent ecosystems can solve specific talent issues in targeted locations to move the needle on filling open roles with qualified talent. Our report identifies some examples of talent ecosystems for manufacturers.

Final thoughts

Manufacturers are likely to continue experiencing challenges in attracting, retaining, and upskilling their workforce unless there is a concerted, industry-wide effort. The broader reality is that the industry as a whole should continue to come together to help with the perception of work and introduce flexibility in manufacturing for a new generation of workers, standardize on the best pathway to credentialing skilled workers, and build additional on-ramps to talent programs that could expand and diversify the pipeline entering the industry. Talent ecosystems can be a powerful method of filling the gaps that persist, creating the pathway for tomorrow’s manufacturing workforce today.

Learn more about Deloitte’s Industrial Products & Construction practice and Human Capital practice.

Contacts:

• Paul Wellener, vice chairman, US Industrial Products & Construction Leader, Deloitte Consulting LLP
• Victor Reyes, managing director, Deloitte Consulting LLP
• Kate Hardin, executive director, Deloitte Research Center for Energy & Industrials, Deloitte Services LP