Cultivating competence: how to close the skills gap in smart manufacturing

The rise of Industry 4.0 and smart manufacturing is transforming the industry as we know it. Arriving at a pivotal time, can the innovations of our time be used to help ease the great manufacturing skill shortage, and why is there an Industry 4.0 skills gap in the first place? Currently, there is not enough talent to go around, and in order to adopt smart manufacturing advancements, more training, upskilling, reskilling and talent acquisition are needed to meet the manufacturing demands of tomorrow.

The skills gap and talent shortage are not new to manufacturing. The National Association of Manufacturers (NAM) found that it has been a key concern for manufacturers since 2017. What has changed, however, is the severity of the issue.

According to a Deloitte analysis, things are about to get worse. The firm projects a potential need for approximately 3.8 million new employees between 2024 and 2033. Alarmingly, projections suggest that 1.9 million manufacturing roles could remain unfilled in the United States (U.S.) if this issue is not addressed.

The sense of urgency around the skill shortage and attracting talent is mounting, but smart manufacturing can be the transformative way forward to bridge the skills gap.

What is smart manufacturing, and can it alleviate the talent shortage?

Smart manufacturing is defined as leveraging advanced technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), and robotics to enhance effectiveness, productivity, and safety in manufacturing processes. Further, smart manufacturing, supported by AI and generative AI (GenAI), can automate processes, taking the manufacturing industry to new heights with robots and predictive analysis, similar to predictions by science fiction movies from long ago.

The movie Metropolis may have been released in 1927, but the silent film was visionary, showcasing a future world where the dehumanisation of labour was possible. Now, almost 100 years later, life is imitating art. Smart manufacturing enables automation, with robots replacing humans and factories operating almost autonomously. However, will these innovations be sufficient to mitigate the impact of a limited, ageing workforce?

In-demand skills to support smart manufacturing

The skills and learning required to embrace smart manufacturing are specific and technical in the areas of data analytics, IoT, and automation. According to Deloitte and The Manufacturing Institute’s (MI) analysis, there has been a 75 per cent spike in demand over the last five years for simulation and simulation software skills, mainly needed for technology-enabled production or testing roles. In terms of specific roles, manufacturing businesses require professional “statisticians, data scientists, engineers, logisticians, computer and information systems managers, software developers, and industrial maintenance technicians,” and this demand will rise from now until 2032.

Additionally, the report found that specifically in production roles, the higher-level skill sets will be in greater demand, such as machinists, first-line supervisors, semiconductor processing technicians, welders, and electronics and electromechanical assemblers.

Globally, manufacturing leaders are striving to cultivate talent ecosystems to boost their workforce in specialised roles, recognising the dire relationship between business viability and increasing their workforce with skilled professionals.

Forging partnerships to address talent shortage

According to Deloitte, roughly 9 in 10 surveyed executives located in the U.S. said they recognise they must act now and have looked for appropriate partnerships to access skilled professionals. Most manufacturers say they are partnering with four or more partners (the average) to help find talent. In the same survey, the top five partnership types listed include technical colleges (73 per cent), industry associations (58 per cent), universities (48 per cent), state and regional economic development agencies (47 per cent), and K-12 schools (44 per cent).

Additionally, an Ernst and Young (EY) survey uncovered that 82 per cent of surveyed respondents said they are seeking new and innovative ways to invest in the careers of their workforce because 65 per cent of manufacturers said they struggle to fill job vacancies due to the quickly changing skills required for the industry.

How can manufacturers close the skills gap?

Manufacturers must create a long-term talent strategy, prioritising upskilling and reskilling current employees to bolster the adoption of emerging technologies. Additionally, manufacturers should adopt the “new organisational paradigm for businesses” that is shifting the focus from job title and educational qualifications to matching employees to job responsibilities and projects, aligning with their skills and interests.

This approach allows manufacturers to not only adeptly match employees to areas of need, but also capture new talent. Forbes suggests that this agile, skills-based approach does not confine employees to one role only and empowers the workforce with enhanced learning, development, and growth opportunities in the organisation.

New staffing avenues, like recruiting from schools, trade schools, and internships, can uncover untapped talent sources. To attract and retain these individuals, however, manufacturers should create an inclusive environment that supports the growth of underrepresented groups in the industry, such as women.

In a recent survey, only 27 per cent of women in the sector said they feel optimistic or “strongly” about their advancement opportunities in manufacturing, in contrast to 40 per cent of their male counterparts. This highlights the industry imperative that diversity, equity, and inclusion (DEI) be addressed urgently. According to Deloitte, “it’s simple demographic arithmetic,” highlighting that manufacturers will not successfully bridge the great manufacturing skills gap without a vigorous DEI strategy. Below, we highlight the primary characteristics of a successful talent growth roadmap.

Top 5 requirements for a winning talent acquisition and retention strategy:

1. Invest now in training

Ensure that investments are earmarked for training programs tailored to smart manufacturing technologies.

2. Educate current staff

By prioritising upskilling and reskilling initiatives, manufacturers can ensure expertise is found on the floor and in the boardroom.

3. Prioritise inclusivity

Foster an inclusive manufacturing environment that will suit all types of employees and prioritise a robust DEI strategy to attract new talent.

4. A skills-focused approach

Ensure a skills-focused approach is adopted to create a dynamic talent ecosystem that is not rigid but agile to meet task-specific demands. Also, consider developing apprenticeships, work studies, or internships.

5. Foster flexibility

Almost half (47 per cent) of respondents in Deloitte and the MI’s study said that flexible work arrangements are required to retain staff, especially millennials and Generation Z (GenZ).

Advice to manufacturers

In order to attract and retain talent while filling the skills gap, manufacturers must address several key issues to ensure they attract workers; chief among these is fostering a more inclusive environment. Deloitte has indicated that manufacturers are aware of how critical diversity is and that DEI is now topping the industry’s list of priorities, but businesses must ensure inclusivity is a pillar of their recruiting and retaining strategy.

“People don’t stay at organisations where they don’t see themselves,” said Allison Grealis, founder and president of the Women in Manufacturing Association.

By fostering an environment that champions DEI initiatives combined with an agile environment that prioritises flexibility, a skills-based approach, and learning, manufacturers can unlock new ways to attract top talent to close the great manufacturing skills gap.

Lastly, to address the skills gap, businesses should consider using tools, such as the Smart Industry Readiness Index (SIRI), that can help leaders assess the skill sets and technologies they need to evolve and help formulate effective Industry 4.0 digital transformation roadmaps. By leveraging the Smart Industry Readiness Index and the strategies mentioned above, organisations can strategically plan for their Industry 4.0 transformation, bridging the skills gap and positioning themselves for long-term success in a rapidly evolving manufacturing landscape.

Frequently Asked Questions About Skills Gap in Smart Manufacturing