How Automation Can Help Overcome Labor Shortages in Manufacturing

The American manufacturing industry is experiencing a skilled labor shortage of unprecedented proportions. You might think that with 13 million workers currently employed, a thriving sector boasting a 393,000 establishment increase since 2019, and a healthy Manufacturing Employment Index of 48.6 (April 2024), the future looks bright. 

However, a dark cloud looms on the horizon: a staggering 622,000 unfilled manufacturing jobs paint a stark picture of a workforce on the brink. The national unemployment rate sits comfortably at 3.9%, highlighting the challenge to find qualified workers to fill these critical positions.

While a sizable workforce exists, the industry grapples with two critical challenges: a skill gap and a body gap. The skill gap refers to the mismatch between the skills available in the current workforce and the skills required for modern, technology-driven manufacturing. This gap hinders productivity and innovation. The body gap refers to the simple lack of workers to meet the growing demand for manufactured goods. 

This dual shortage threatens to cripple the industry’s growth and stall its positive momentum. But there’s a solution: automation. While encouraging a baby boom might be a fun idea, it doesn’t offer the immediate results manufacturers need. In fact, with the US birthrate steadily declining, relying on natural population growth isn’t a viable strategy!

Robotic automation, however, provides a swift and effective remedy. By strategically implementing automated manufacturing processes, companies can not only address the labor shortage but also access a new era of efficiency, productivity, and growth. It’s a solution that offers a far quicker return on investment than waiting for the next generation of workers to enter the workforce.

We’re here to help manufacturers understand this new landscape. This guide will explore the depth of the labor shortage crisis, look into the power of automation as a solution, and equip you with the knowledge to leverage this technology for your company’s success.

Related Reading: The Transformative Impact of Automation for Manufacturers

The Looming Labor Crisis in Manufacturing

The American manufacturing sector is experiencing a significant disconnect between its growth trajectory and its workforce. While the number of manufacturing establishments in the US have seen a remarkable increase, the industry is grappling with a major hurdle to this progress: labor shortages. 

This labor shortage comes despite a seemingly healthy national unemployment rate of 3.9% (February 2024). This statistic underscores the difficulty in finding qualified workers for these manufacturing jobs. While the Manufacturing Employment Index reached a positive value of 48.6 in April 2024, indicating potential growth, the significant number of unfilled positions presents a serious threat to continued progress.

The Changing Skillset Landscape

The labor shortage in manufacturing isn’t simply a matter of quantity. It’s also a challenge to find workers with the right skills.

According to McKinsey, manufacturers’ demand for traditional skills involving physical, hands-on labor is expected to decline by 30% over the next decade. However, this decline won’t be met with a decrease in overall workforce needs. In fact, the demand for technical skills is predicted to rise by 50%.

This shift highlights a crucial point. Despite the skilled labor shortage, manufacturers are still struggling to fill positions that require traditional skills like machining and metalworking. The aging workforce, with a significant portion (51%) over 45, furthe exacerbates this issue as valuable experience approaches retirement.

The Coming Wave of Retirements

The aging workforce in manufacturing presents a double-edged sword. As mentioned, 51% of manufacturing jobs are currently held by workers aged 45-65 or older. This not only contributes to the skilled labor shortage but also creates a looming knowledge gap as experienced workers retire.

Compounding this issue is the lack of interest from younger generations in pursuing manufacturing careers. Only 14% of Gen Zers say they’d consider such a path, often citing concerns about low pay, poor work-life balance, and unsafe working conditions. However, this perception is largely a stigma rooted in outdated views of the industry.

In reality, modern manufacturing offers a wide range of well-paying, stable careers with opportunities for advancement. Trade school programs, often overlooked in favor of traditional college degrees, provide a direct pathway to these rewarding positions. The skills acquired in these programs are highly transferable, opening doors to various industries and career paths.

Unfortunately, the prevailing narrative in America has steered many young people away from trade schools and into a student debt crisis, while simultaneously exacerbating the manufacturing labor shortage. It is now incumbent upon manufacturers to actively dispel this stigma. By engaging with local students and organizations, showcasing modern, safe, and clean facilities, and highlighting the rewarding career opportunities available, manufacturers can change the perception of their industry and attract a new generation of skilled workers.

The Power of Automation: A Solution for a Changing Landscape

The labor shortage in manufacturing is a complex challenge, but automation offers a powerful and multifaceted solution. By implementing automated manufacturing processes, companies can not only address the immediate need to fill vacant positions but also take advantage of a range of long-term benefits.

Automation encompasses a variety of technologies, including robots, cobots (collaborative robots designed for human-machine interaction), and drones. These technologies can automate repetitive tasks, such as assembly line operations and material handling, freeing human workers to focus on higher-value activities that require critical thinking, problem-solving, and technical skills.

This shift towards automation directly addresses the skilled labor shortage by reducing the reliance on a shrinking workforce for repetitive tasks. It also aligns with the changing skillset landscape as the demand for technical skills for operating, maintaining, and programming these automated systems increases.

Beyond addressing the labor shortage, automation offers a multitude of benefits for manufacturers:

• Reduced Labor Costs, Increased Employee Value: By automating repetitive tasks, manufacturers can significantly reduce labor costs and free up resources that can be reinvested in the workforce. This could lead to higher wages, better benefits, and more opportunities for career advancement, creating a more rewarding and fulfilling work environment for employees..

• Improved Workplace Safety: By removing humans from hazardous environments, automation can significantly reduce workplace accidents and injuries.

• Increased Productivity: Automated systems can operate 24/7 with minimal downtime, leading to a significant increase in production output and overall efficiency while reducing costs.

• Enhanced Product Quality: Automation can ensure consistent quality control by reducing human error in production processes.

The rise of smart factories further impacts the power of automation. These data-driven facilities leverage automation technologies alongside interconnected machines and sensors to optimize production processes. A strong back-office system capable of handling the vast amounts of data generated by these smart factories plays a crucial role in their success.

The increasing adoption of automation is evident in the positive growth projections for the industrial robot and cobot markets. According to Grand View Research, the global market for industrial robots is expected to expand at a compound annual growth rate (CAGR) of 10.5% between 2023 and 2030. Similarly, the cobot market is expected to reach $8 billion by 2030, showcasing the rapid adoption of these collaborative automation solutions.

Related Reading: Comprehensive Guide to the Industrial Automation Process

Addressing Concerns and Overcoming Barriers

While automation offers a compelling solution, it’s natural to have concerns. There are a lot of myths about manufacturing automation! Here, we’ll address some of the frequently raised issues:

• Job displacement: Some may worry that automation will eliminate manufacturing jobs. However, it’s important to understand that automation is primarily focused on automating repetitive tasks, not replacing skilled workers. The fact is that automation can create new, higher-skilled jobs in areas like:

• • System operation: Workers are needed to oversee and monitor automated systems, ensuring they function correctly and efficiently. This may involve troubleshooting issues, performing maintenance and upgrades, and collecting data for continuous improvement.

• • System maintenance: As automated systems become more complex, there’s a growing need for skilled technicians to maintain and repair them. This could involve mechanical, electrical, or programming expertise.

• • Programming and integration: The development, customization, and integration of automation solutions require skilled programmers who understand the specific needs of the manufacturing process.

• • Data analysis: The vast amount of data generated by automated systems needs to be analyzed to identify trends, optimize processes, and predict potential issues. This creates opportunities for data analysts and industrial engineers.

Plus, by addressing the labor shortage and increasing productivity, automation can help manufacturers grow their businesses. This growth can lead to an overall increase in job opportunities, even in areas where some tasks are automated.

• Upskilling the workforce: As the skillset landscape changes, there will be a need to upskill the existing workforce to adapt to new technologies. Manufacturers can implement various strategies to achieve this, such as:

• • Training programs: Developing and offering in-house training programs to equip employees with the necessary skills to operate, maintain, and program automated systems.

• • Partnerships with educational institutions: Collaborating with vocational schools and community colleges to create customized training programs that align with the specific automation technologies being implemented.

• • Tuition reimbursement programs: Providing financial assistance to employees who pursue educational opportunities in relevant fields, such as robotics, automation technology, or data analysis.

By investing in upskilling initiatives, manufacturers can ensure their workforce has the capabilities to thrive in a more automated environment.

• Financial barriers: The initial investment in automation can be a hurdle for some companies. However, the long-term benefits in terms of increased productivity, reduced costs, and improved safety often outweigh the initial expense. Here are some ways to overcome these financial barriers:

• • Conduct a thorough cost-benefit analysis: Carefully evaluate the upfront costs of automation against the projected long-term benefits to determine the return on investment (ROI). This analysis should consider factors such as increased production output, reduced labor costs, and improved quality control. Use an Automation ROI Calculator to get some initial insights into the cost benefits.

• • Explore financing options: Several financing options are available to help businesses acquire automation equipment. These include loans, leases, and government grants. Investigate these options and choose the one that best suits your company’s financial situation.

• • Start small and scale gradually: Manufacturers don’t have to automate their entire operation at once. They can start by automating a single process or department and then scale up as their budget allows, and then gain experience with automation. Don’t just go in with the mindset of “We need to buy a robot!” Instead, think carefully about choosing your first automation project.

By carefully considering the costs and benefits, exploring financing options, and implementing automation strategically, manufacturers can overcome the financial barriers to entry.

Related Reading: How to Maximize Automation ROI: A Manufacturer’s Guide

The Future of Manufacturing Is Automated: Embrace the Power of Automation and Thrive

The American manufacturing industry stands at a crossroads. A skilled labor shortage threatens to stall its growth, but automation is the solution. By strategically implementing automated processes, manufacturers can not only address the immediate need for qualified workers but also discover a new era of efficiency, productivity, and growth.

Imagine a manufacturing floor where repetitive tasks are handled by automated systems, freeing your skilled workforce to focus on innovation and problem-solving. Automation offers many benefits, including reduced labor costs, improved workplace safety, and increased production output. It also aligns with the changing skillset landscape, creating a demand for the very technical skills the next generation of workers possesses.

Don’t let the labor shortage hinder your company’s potential. DEVELOP LLC, a leading provider of robotic automation solutions, can help you take the first steps toward a more automated and prosperous future.

Take the first step today! Request Your Free Consultation with our automation experts to discuss your specific needs and explore how automation can help your business thrive. Not ready for a consultation? Take our free online Automation Assessment to receive a personalized report on your automation potential. Curious about the potential return on investment? Try our user-friendly Automation ROI Calculator to estimate the cost savings and productivity gains you can achieve.

DEVELOP LLC is here to empower you with the knowledge and tools you need to embrace automation and secure your competitive edge. Contact us today and let’s discuss the full potential of your manufacturing operation.

About the Author:

Matt Moseman leads as President of DEVELOP, with a strong foundation from the Milwaukee School of Engineering, where he earned both a Bachelor’s and a Master’s in New Product Management. Moseman’s career highlights include his pivotal role in founding NodeUDesign, innovating in automation hardware, and driving DEVELOP LLC to the forefront of industrial robotics with a focus on enhancing productivity and efficiency.