Now that we are entering our third year of the pandemic, attracting and retaining skilled talent continues to challenge the manufacturing and distribution (M&D) industry. According to LBMC’s fifth annual Business Outlook Report, M&D continues to wrestle with rising cost of raw materials, supplies and equipment as well as supply chain disruption. There has been a greater toll on M&D businesses with respect to staffing availability, productivity, and costs to operate. For this industry, nearly 70% struggled to generate revenue during the peak of the pandemic and experienced either no growth or negative growth.

While Tennessee continues to be an attractive location for manufacturing businesses, competition for qualified specialized manufacturing talent is an ongoing challenge. The candidate demand in the marketplace makes it even more crucial for companies to increase salaries in order to attract and retain employees who possess the experience, skill set, education and industry knowledge required.

In our 2021 survey, the majority of respondents indicated that their primary strategy for attracting and retaining employees was to increase compensation. A very low percentage of the high-growth M&D businesses planned to offer flexible or remote arrangements, which was the top strategy in most other industries surveyed. This is likely due to the labor-intensive nature of the work done by the industry.

A key factor in finding the right talent is understanding how manufacturing has changed. Increased automation, robotics, and advanced manufacturing equipment is driving the need for a more skilled workforce equipped with science, technology, engineering and math (STEM) skills. As a result, many manufacturers need to look beyond their traditional sources to fill key manufacturing roles.

The NAM Manufacturers’ Outlook Survey report noted that 82.5% of manufacturing companies were struggling to find qualified candidates for open positions. To combat this challenge, a reported 62.7% implemented or enhanced their internal training programs, 50.4% utilized temporary staffing services, and 41.2% explored collaboration with educational institutions on skills certification programs. Because of the shortage in skilled talent, 45% of respondents indicated that they were unable to onboard new business and lost revenue opportunities.

How Manufacturers are Addressing the Skills Shortage, 4th Quarter 2021

How Manufacturers are Addressing the Skills Shortage, 4th Quarter 2021

Note: Respondents were able to check more than one response; therefore, responses exceed 100 percent.
Source: NAM Manufacturers’ Outlook Survey, https://www.nam.org/2021-4th-quarter-manufacturers-outlook-survey/

There are real workforce-related challenges that the Tennessee Chamber of Commerce & Industry will be discussing during their transformation of manufacturing industry events in the next few weeks. They are reviewing workforce dynamics, production efficiency, and inter-organizational volatility within the M&D industry. M&D businesses need to prepare for double-digit output growth over the next decade while simultaneously managing a decline in talent. This shift will impact the existing workforce and require retraining to meet new demands.

At LBMC Staffing Solutions, we’ve seen a growing number of requests to locate candidates for key manufacturing roles such as plant VP, plant manager, purchasing, operations and engineering. Many of these skilled positions are currently held by an aging workforce on the threshold of retirement. Leveraging our expertise and insight into the current manufacturing environment, we have been able to complete several successful talent matches for these highly technical manufacturing roles.

With a large number of the current manufacturing workforce in their 50s, we anticipate an ongoing need to locate and recruit a more highly-skilled labor force.

Let us help you find the right talent for your key specialized manufacturing roles.