Why Reskilling Is Essential for the Manufacturing Industry

The manufacturing industry is facing a severe labor shortage, and research suggests it may only get worse. In September 2023, the U.S. Census Bureau estimated that nearly 1.4 million manufacturing jobs were lost during the COVID-19 pandemic. The National Association of Manufacturers (NAM) has also predicted that there will be a 2.1 million-job shortage in the manufacturing industry by 2030, citing a skills gap as a key reason. 

Despite these projections, analysts remain optimistic that solutions exist for addressing the current — and likely future — skills gap. One integral strategy for bridging the gap is reskilling, which enables companies to keep up with the pace of technological innovation. 

Reskilling serves as an efficient, cost-effective way for organizations to internally acquire the talent they need — benefiting both employers and employees:

  • For employers, reskilling provides the opportunity to optimize the workforce's capabilities while driving cost savings, improving talent attraction and retention, as well as enhancing diversity, equity, and inclusion (DEI) efforts
  • For employees, it offers upward mobility and the opportunity to earn higher wages. 

This article will explore both the necessity of reskilling within the manufacturing industry and the opportunities that reskilling brings for those who choose to embrace it. The final conclusion: reskilling is not just a strategy, but a critical element for the sustainability of the manufacturing sector.

The Manufacturing Skills Gap: An Overview

Advancements in technology have created a skills gap across nearly every industry, with manufacturing being one of the most notable. Manufacturers are finding that many of their employees lack essential skills that they’ll need in order to thrive in the production environments of the future. Some of these skills include:

  • Data literacy and analytics: While manufacturing companies are collecting vast amounts of data from various sources, such as sensors and production lines, employees often lack critical expertise to make the most of this information. This includes ways to analyze and derive actionable insights from data, tell a compelling data story to technical and non-technical audiences, and avoid biases and errors. The manufacturing industry will need greater data literacy to implement a data-driven decision-making process and elevate its efficiency.
  • Supply Chain Management: Effective supply chain management is critical for manufacturing success, but many companies face skill gaps in this area. This includes challenges in optimizing inventory levels, managing suppliers, mitigating supply chain risks, and implementing sustainable practices throughout the supply chain.
  • Artificial intelligence (AI) and machine learning (ML): AI and ML technologies have grown by leaps and bounds in recent years, with greater innovations sure to come. The expansion of generative AI's (GenAI) capabilities will yield deeper data-driven insights, which employees must learn to decipher. The ability to understand and effectively use these new technologies across manufacturing facilities will be critical. 

Whether it’s enhancing data analysis, storytelling, supply chain management, or  GenAI skills  to drive greater manufacturing efficiency, tomorrow’s manufacturing workforce will need greater data literacy to thrive. 

The Benefits of Reskilling for Employers

Reskilling can help manufacturers clear many of the operational hurdles they face, both by developing their existing talent and cost-effectively fulfilling their internal personnel needs. A few benefits of reskilling are:

  • Applicable technical skills: Researchers from McKinsey studied the expected shift in skill sets that U.S.- and Western European-based manufacturing employees will undergo between 2016 and 2030. The transition from physical and low-level cognition skills to high-level cognition and technical skills means that manufacturers will need a more future-ready workforce — one that reskilling can provide.
  • Cost savings: The Society for Human Resources Management (SHRM) showed that it's often more cost-effective to develop and hire talent internally than to build from the outside. You may have to hire externally for specialized positions like data scientists, but searching internally first can be less expensive and help fill vacancies faster.
  • Improved talent attraction and retention: Workers will be attracted to and stay with employers who offer advancement opportunities.
  • DEI advancement: DEI initiatives also play a central role in addressing the data skills gap, as the Center for Economic and Policy Research found that up to four in 10 frontline manufacturing workers are non-white. This over-representation gives manufacturers a unique opportunity to mine their internal workforce for hidden technical talent, bringing minority demographics into the mix.

Challenges in Implementing Reskilling Programs

Despite the many benefits that it has to offer, several challenges exist for successful reskilling. McKinsey's survey found that 30% of executives doubt that their HR infrastructure has the ability to develop a reskilling program that addresses their current and anticipated skills gaps. Some possible reasons for this fear are:

  • Content irrelevance: Rather than tailoring their curriculum to issues that are pertinent to the manufacturing industry (e.g., predictive maintenance, potential supply-chain bottlenecks), some reskilling providers offer only generic content that doesn’t help employees gain the relevant skills that they need. 
  • Low engagement: As a result of minimally relevant content and a failure to prepare them for the future, some employees don't follow through on the reskilling opportunities they have access to, as the value needed to keep them engaged simply isn't there.
  • Lack of role-specific applicability: Growing manufacturers need a training program that can be tailored to the needs of a workforce with very different types of roles and day-to-day applications. Some reskilling providers offer a curriculum that can train employees within one area of the business for a specific function vs accommodate a wide range of positions and responsibilities. 

Manufacturers that have managed to clear their reskilling hurdles have realized numerous benefits. The McKinsey report cited a steel plant in the Netherlands, for example, whose engineers used their newfound skills in analytics to optimize its manufacturing processes. The result was a 15% increase in profitability before taxes, depreciation, and amortization — all while the global steel sector was struggling. 

What to Look for in a Reskilling Provider

Thankfully, many of the challenges that exist in implementing a successful reskilling program can be resolved by finding the right provider. The key is to know what to look for in your reskilling provider, with some essential attributes being:

  • Job- and company-specific content delivered by experts: Your reskilling program should feature real-world scenarios that apply to the work your employees will be doing, and it should be taught by industry experts who have their finger on the pulse of the manufacturing field. 
  • Robust career and professional development support: Employees are more likely to maintain their engagement if they receive personal mentorship and clear incentives to stay the course. Your reskilling provider should help employees see their reskilling programs through to the end. 
  • Tailored and convenient teaching methodology: Legacy teaching methods limit reskilling access to some employees, so providers should offer a tailored, convenient curriculum to make their content available to any eligible workers — especially those in DEI-focused demographics. 
  • A highly engaged community of learners: Your employees will be more likely to stay the reskilling course if they have a clear view of the advancement that awaits them. Your reskilling provider should help motivate your employees to continue and foster a community that seeks to advance its knowledge together. 

The right reskilling provider should furnish manufacturers with customized curriculum content, expert-led training, and a scalable program that can grow without sacrificing efficiency. If the provider offers that, both employers and employees can enjoy the benefits that a future-ready workforce has to offer. 

Correlation One: Reskilling for the Manufacturing Sector

Recent innovations have presented the manufacturing sector with both a challenge and an opportunity. The challenge is that organizations are experiencing critical skills gaps across data literacy, supply chain management, and GenAI, curtailing their ability to thrive in an era of accelerated technological transformation. The opportunity is that they can drive greater productivity and foster a more equitable economy for all — and reskilling can be the difference between the two. 

Correlation One offers employers in the manufacturing sector the reskilling content their employees need to keep up with the pace of technological change. Our reskilling curriculum is just one of many solutions that we offer to boost your employees' data skills and literacy, helping them gain the tech skills that tomorrow's manufacturing sector will demand. 

Our program is tailored to the specifics of your industry and taught by experts in the manufacturing field. Our experts possess the knowledge needed to future-proof your workforce, so download our reskilling white paper today to elevate your employees' skills to the next level.