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Fears of a US manufacturing skills gap are overblown: BCG

Current skills shortages reflect supply and demand imbalances in specific jobs in certain locations.


CHICAGO, Ill. – The US skills shortage will be far less of a problem than many people believe in the short term, and it is unlikely to prevent a resurgence in US manufacturing in the next few years, according to a new report by The Boston Consulting Group (BCG).

“Is the US really facing a manufacturing-skills crisis?” the report, The US Skills Gap: Could It Threaten a Manufacturing Renaissance?, asks. “We believe such fears are overblown – at least for the near term. Our research finds little evidence of a meaningful and persistent skills gap in most parts of the US, including in its most important manufacturing zones.”

“The real problem,” it continues, “is that companies have become too passive in recruiting and developing skilled workers at a time when the US education system has moved away from a focus on manufacturing skills in order to put greater emphasis on other capabilities.”

The following key findings are based on an analysis of job vacancy and wage data, as well as on a BCG survey of 100 companies with US manufacturing operations.

In the short term:

  • BCG estimates that the US is currently short around 80,000 to 100,000 highly skilled manufacturing workers. But those numbers represent less than 1% of the nation’s total manufacturing workforce and less than 8% of its highly skilled workforce of approximately 1.4 million.
  • The skilled-worker shortages that exist in the US are localized. Only 5 of the nation’s 50 largest manufacturing centers – Baton Rouge, Louisiana; Charlotte, North Carolina; Miami, Florida; San Antonio, Texas; and Wichita, Kansas – appear to have significant or severe skills gaps. Ninety percent of the biggest manufacturing areas do not show evidence of significant manufacturing-skills shortages.

In the long term:

  • Companies are not doing enough to cultivate a new generation of skilled manufacturing workers in the US Manufacturers have scaled back their in-house training over the years, and they underutilize important sources of new talent such as high schools and community colleges.
  • The retirement of aging workers, as well as heightened demand for workers, could cause series skilled-labor shortages in the US. By 2020, the nation could face a shortfall of around 875,000 machinists, welders, industrial-machinery operators, and other highly skilled manufacturing professionals, according to the U.S. Bureau of Labor Statistics and BCG estimates.
  • Companies, schools, governments, and nonprofits must do much more to identify, recruit, train, and employ skilled manufacturing workers. A wide array of collaborative programs already exists across the U.S. But these programs are not nearly sufficient.

“Quite often, the skilled workers are available – just not at a price employers are willing to pay,” explains Harold L. Sirkin, a BCG senior partner and coauthor of the research. “Or companies do not bother to recruit at community colleges and vocational schools. In other instances, experienced skilled workers with good academic training are available – sometimes in-house – but companies are unwilling to invest the time and money to train these workers to use new technologies or specific machines.”

“Investment by the public and private sectors in skills development needs to increase and accelerate. Companies can meet many of their needs on their own through more aggressive recruiting and training,” adds Michael Zinser, a BCG partner who leads the firm’s manufacturing practice in the Americas. “These efforts must be supported by a nationwide program of science, technology, and engineering training to ensure that there will be sufficient skilled workers in key trades.”

Download a copy of the report here.