With digitization, changing skill sets and the retirement of the baby boomers, American manufacturing companies are struggling to find skilled workers to hire.
Nearly all (98.6 percent) of the manufacturing companies in the U.S. are small businesses. And three-quarters (75.3 percent) of them employ fewer than 20 people, according to Score Association, a mentorship program for small business owners and aspiring entrepreneurs.
Despite the fact that manufacturing companies generated 11.6 percent of the country’s economic output last year and employed 8.5 percent of the population, the vast majority (89 percent) of these companies reported not being able to fill their job openings.
That’s because these operations produce products from raw materials and components, some by hand, and others by machine. The knowledge and training required to man the plants, factories and mills that generate these goods are becoming harder to find in younger members of the workforce, who are focusing increasingly on other technical skills and vocations. Small businesses surveyed by Score also said potential employees had misconceptions about what manufacturing jobs actually entail.
Still, businesses with fewer than 20 workers comprise a significant employment sector in the U.S., Score’s research suggests.
Of workers in the American apparel industry, 22.9 percent are employed by small manufacturers. Small businesses also employ 18.4 percent craftsmen for furniture and related products, 16.4 percent of workers who fabricate metal products, 15.2 percent of those crafting wood products, and 11.5 percent of workers making beverages and tobacco products.
“Manufacturing businesses drive the U.S. economy,” said Ken Yancey, CEO of Score. “They might be factories or bakeries, and they might utilize machine power or hand-make their products, but what they have in common is that the vast majority of manufacturers are small business owners.”
The Institute for Supply Management’s (ISM) Spring 2019 Semiannual Economic Forecast delivered an optimistic outlook for U.S. manufacturers this year. The survey of U.S. purchasing and supply executives from 17 industrial sectors, including apparel, leather goods and textile mills, revealed that production capacity is expected to increase 4.5 percent in 2019.
“U.S. manufacturing continues to move in a positive direction,” assured Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee.
However, Fiore underscored concerns about “finding and onboarding qualified labor” as one of the factors that will “ultimately define manufacturing revenues and profitability.”
The move to offshore manufacturing, especially in the apparel sector, has changed the hiring landscape for skilled workers in the U.S. As opportunities have dwindled, so has the talent pool. But some businesses are finding success with technological innovations, pushing the manufacturing industry into the 21st century with highly automated processes.
Earlier this month, OnPoint Manufacturing received the 2019 Alabama Manufacturer of the Year award in the small manufacturer (99 or fewer employees) category. The 25-employee operation crafts apparel using computer-directed, on-demand manufacturing technology. OnPoint developed customized workflows to subvert the traditional inventory-holding model, instead allowing brands and designers to commission made-to-order pieces.