Solving the Machining Labour Shortage

23 May 2024
Photo by Mastars on Unsplash

It’s an exciting time for the machining industry. The sector has seen innovation, rapidly evolving technology and widespread adoption. Huge growth is predicted with the Computer Numerical Control Machines Market size expected to reach USD 147 Billion by 2031.

Despite this, one cloud threatens to rain on the parade: a lack of skilled machinists.

Anxiety around the skilled labour shortage facing the manufacturing sector is well-documented and continues to be problematic for companies across the board and worldwide. 

A joint study between the Manufacturing Institute (MI) and Deloitte found that “there could be as many as 3.8 million net new employees needed in manufacturing between 2024 and 2033, and that around half of these jobs (1.9 million) could remain unfilled if the talent conundrum is not solved.”

The question remains, what is the talent conundrum? And more importantly, how is it solved?

 

The jobs are here, where are the people?

 

Photo by nik biziuk on Unsplash
Photo by nik biziuk on Unsplash

 

 

It’s no secret that across the manufacturing industry, companies are struggling to attract and retain skilled employees, leading to an increasingly wide gap between the number of job openings and the number of applicants qualified to fill them.

The maths may be simple but the reasons behind the gap are complex. One significant factor is the number of workers leaving the labour force due to retirement. In 2022, it was reported that nearly one-quarter of the sector’s workforce were aged 55 or older. According to the MI and Deloitte, retirement is the biggest contributor to the increase in job openings across the manufacturing sector. In fact, of the 3.8 million jobs set to go unfilled, 2.8 million will be unfilled due to employee retirement.

Ideally, a new generation would be waiting in the wings to fill these jobs. However, the numbers show this just isn’t the case and companies are reporting a shortage of suitable applicants, lacking the necessary skills and qualifications to pick up the slack.

Nevertheless, there is hope yet with companies taking new approaches to recruitment and production with a view to solving the problem. A complex issue requires complex solutions including, automation, increased training for new and current employees and a keen understanding of employees’ changing expectations regarding work.

The solutions:

Training for new and current employees 

 

Photo by PTTI EDU on Unsplash
Photo by PTTI EDU on Unsplash

 

It’s no surprise that in the face of dwindling numbers of skilled applicants, companies within the manufacturing sector are increasingly investing in employee training and education to account for the skills gap. According to In-Comm’s 2023 barometer, 82% of companies have indicated they are planning to take on an apprentice in the next twelve months. Most companies cite their reason for this as “developing future talent”, followed closely by “filling a skills gap”.

Moreover, some companies are rewriting the rulebook for employee selection by using a “skills-based” approach. Rather than using job titles or formal qualifications as metrics for placement, companies are assessing employees based on their abilities and competencies. This method has yielded positive results in improving company reputation, anticipating and responding to changes and, crucially, retaining high-performing employees. 

As well as a need to attract and develop new talent, companies are also putting measures in place to upskill current employees. E-learning platforms, conferences and seminars are being offered to support employees with keeping abreast of the latest manufacturing trends and developments. 

However, according to In-Comm’s 2023 barometer, only 45.3% of companies have offered short upskilling/reskilling courses to staff. This may indicate the need for increased awareness among senior management of flexible learning platforms that support employees without being overly disruptive to production.

Automation

 

photo courtesy of IMTS
Photo courtesy of IMTS

 

Automation and CNC machining go hand in hand. The sector has already embraced automation across a variety of production processes including part handling, machine shop quotation and lights-out manufacturing as well as 5-axis machining, ERPs and automated inspection technology. 

When it comes to duration, speed and accuracy machines have the upper hand on humans. On this basis, in the face of a shortage of skilled people, automation certainly has a role to play.

Forbes has reported that the skills shortage is already fuelling the drive towards automation. Similarly, The MI noted that there has been “a 75% increase in demand for simulation and simulation software skills, sought mostly for technology-enabled production or testing roles” including computer simulation, digital twin and virtual prototyping.

According to the 2023 Barometer, businesses are getting on board with 70% reporting increases in technology and equipment investments. The figures indicate that firms are switching to automation to take advantage of these developments and address their skills shortage. 

While it may sound paradoxical, automation creates opportunities for people. With machines shouldering the burden of repetitive work, the door is opened for workers to take on more skilled projects. This was the case for the owner of AA Precision Tooling, BJ Schrank, who saw over 60% more gross output on jobs after implementing a robot nicknamed Penelope. As a result, his employees were able to run more simultaneous operations and bring in more business.

Automation can work with people to help make workplaces more efficient, safe and engaging for employees, freeing up time and space for more interesting work and business growth.

Meeting Employee Expectations 

 

Photo courtesy of ThisisEngineering on Unsplash 2
Photo courtesy of ThisisEngineering on Unsplash

 

It’s difficult to discuss the labour shortages without raising how changing attitudes towards work contribute to difficulty attracting talent. 

Part of this is the struggle to meet the higher wage expectations of candidates with 64% of respondents to the 2023 Barometer reporting that wage inflation had an impact on staff attraction and retention.

However, more than this, employees are also increasingly seeking greater flexibility at work. The MI reported that 77% of the companies surveyed stated that offering competitive employee benefit programs was the most impactful employee retention method. This was followed by flexible work arrangements including flexible shifts, shift swapping, split shifts, etc. at 47%.

Flexible shift patterns conjure up images of work-from-home days and seem impossible to reconcile with the realities of the machine shop floor. After all, there is a marked difference between taking home a laptop and a 5-tonne 5-axis milling machine.

However, Lisa Gallagher, co-founder and director of Flexibility Works, argues that there are practices which could be implemented to suit both businesses and employees alike, without sacrificing productivity. 

According to Gallagher, by adopting practices such as compressed hours, annualised hours and easy shift swapping, companies benefit from more productive and hard-working staff. Moreover, opening up part-time options to older members of staff helps to retain these employees while providing training for younger members at the hands of experienced workers.

While flexible working arrangements might be a challenge to implement in a machine shop context, the benefits are clear. Done well, companies can increase employee retention and attract candidates from a wider demographic all without sacrificing productivity. 

Manufacturing’s image problem

 

Photo courtesy of John Schnobrich on Unsplash
Photo courtesy of John Schnobrich on Unsplash

 

For many of us, manufacturing brings to mind an industry essential for providing society with the goods it needs. You may even point to its economic importance with the manufacturing sector contributing $2.9 trillion to the US GDP in 2023 and accounting for 49% of all UK exports.

However, not everyone sees the industry this way. In fact, almost a quarter of respondents from the Eccentra Component’s 2023 report believe that manufacturing has “an image problem”. Negative attitudes towards manufacturing jobs persist, misconceived as “monotonous”, “unskilled” or not offering the same opportunities for career progression as other industries. These negative perceptions, while being untrue, have also been linked to the difficulties surrounding talent attraction and retention.

To challenge these misconceptions, companies can emphasise the scale and diversity of manufacturing including the innovation and technological developments which characterise the sector, particularly around CNC machining.

Deloitte also points to the benefits of establishing links between businesses and educational institutions to give young people a look behind the curtain at the shop floor stating that, “[p]erception change starts at home, and local outreach continues to be effective in educating and attracting community members to manufacturing companies.” 

Investing resources in outreach gives young people an opportunity to view manufacturing as an industry full of possibilities for both technological and professional development. By fostering this awareness from an early age, businesses can encourage future generations to be excited at the prospect of working in the industry. 

Cox Manufacturing Company: A Case Study

 

Photo courtesy of Cox Manufacturing Company
Photo courtesy of Cox Manufacturing Company

 

Cox Manufacturing is a machining company located in San Antonio, Texas. The company offers a wide range of services including “CNC turning, CNC milling [and] automatic bar machining”. Where other companies have been struggling to fill their job openings, Cox Manufacturing is thriving. With the company reporting major employee attraction and retention successes, the question remains: how do they do it?

The company’s employment and people management approach is multifaceted. It includes many of the solutions discussed in this article ranging from investment in employee training, a selection strategy that prioritises cultural fit and potential over specific skills, and taking steps to raise the perception of machining.

The results of the strategy are an indisputable success. Between 2012 and 2016, Cox was recognised as an “Inc 5000 Fastest Growing Private Company” and has been consistently able to grow their workforce to 200 employees in 2024. Parallel to this the company has enjoyed consistent growth in sales, with top-line sales increasing yearly except in 2020.

Cox Manufacturing then is a study in how viewing a bigger-picture approach to talent offers a “win-win-win” scenario with benefits for both workers and companies. The employees work for a company that centres their development and, in turn, Cox Manufacturing is able to attract and retain employees while seeing growth in sales. 

According to company president Bill Cox, “workforce retention requires a multi-faceted approach, emphasising continuous improvement. By focusing on these [..] key areas, we not only tackle immediate challenges, but also lay the groundwork for long-term success and growth in U.S. manufacturing.”

 

Ending the shortage

Photo courtesy of ThisIsEngineering on Unsplash 4
Photo courtesy of ThisIsEngineering on Unsplash

 

Innovation is a cornerstone of manufacturing. Solving the skills shortage requires applying this innovative approach to a people-related problem. 

Investing in automating processes through robotisation and software frees up capacity for companies, boosting productivity and allowing employees to engage in more dynamic work.  

In addition to this, the modern working landscape requires companies to think creatively and holistically about their talent attraction processes. Understanding the changing priorities of employees, offering paths to develop required skills and demonstrating the variety of work available in manufacturing is essential for encouraging new and increasingly younger generations to join the industry.

Exploring these options may prove vital for ensuring the next generation of manufacturing talent and the future of manufacturing itself.

 

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