This Is The Latest Threat to American Manufacturing — And It’s Not China

President Donald Trump’s tactical tariffs may be designed to improve the prospects for American manufacturing, but if there are no workers to actually fill those roles, there is little new duties can do about that.

Over the next decade, as many as 2.4 million manufacturing jobs will go unfilled, which will jeopardize more than $2.5 trillion in economic output over the same period, according to a new study from Deloitte and The Manufacturing Institute.

Five out of 10 open manufacturing positions in U.S. manufacturing are staying unoccupied today thanks to the skills gap. More specifically, jobs requiring digital talent, supply chain talent, skilled production, or roles for operational managers will be three times as hard to fill in the next three years, the study found.

And things are only expected to worsen from there.

“Manufacturers in the United States are experiencing some of the highest levels of growth we’ve seen in decades, yet the industry seems unable to keep up with the resulting rebound in job growth,” said Paul Wellener, vice chairman of Deloitte LLP, and U.S. industrial products and construction leader. “With nearly 2 million vacant new jobs expected by 2028, compounded by 2.69 million vacancies from retiring workers, the number of open positions could be greater than ever and might pose not only a major challenge for manufacturers but may threaten the vitality of the industry and our economy.”

The problem, according to Deloitte, is threefold: a negative perception of manufacturing, a shift in desired skillsets owed to the intro of advanced technologies and baby boomers retiring.

To negate that negative perception of manufacturing, companies are considering new perks and workarounds.

“Some manufacturers are shifting their own policies to be more adaptive and flexible, such as allowing nonproduction work to be done from remote locations, while others are implementing new technology like automation to supplement the existing workforce,” the report noted.

In line with the topic of automation, while the generally held belief has been that these types of advanced technologies would eliminate human jobs, Deloitte said it’s actually the reverse.

“Thanks to technological change, the industry overall is trending quickly towards jobs — including entry-level jobs — that are high-skilled and require irreplaceable human skills, such as creativity, critical thinking, design and innovation,” the report noted. “When it comes to more production-focused positions, however, automation is becoming increasingly important in light of the skills gap challenge. Currently, 1 in 4 manufacturers are investing in productivity-enhancing technologies and nearly 60 percent said that they also plan to rely more on automation over the next three years.”

As the baby boomer population looks to exit the workforce, 39 percent of manufacturing companies surveyed said they’re adopting learning and development programs that allow for the transfer of knowledge from retirees to new workers.

Eighty-three percent of companies also said they’re prepared to pay more to attract and keep skilled talent, and 8 percent have even offered signing bonuses.

Despite renewed interest in domestic manufacturing, and an uptick in some areas, the workforce crisis is casting a bleak pallor over the industry’s future.

“Over the next three years, the inability to fill open positions is expected to have the greatest impact on manufacturing companies that are maintaining or increasing production levels to satisfy growing customer demand (51 percent),” Deloitte said. “This will likely pose a challenge for nearly half of manufacturers responding to new market opportunities and those increasing growth as measured by revenue (47 percent each).”

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

More From Our Brands

Access exclusive content