New survey shows broadening skills gap

The serious shortage of qualified employees that a vast majority of U.S. manufacturers are now experiencing is taking an increasingly negative toll on America’s ability to compete in the global economy, according to a survey report released today by the National Association of Manufacturers, the Manufacturing Institute and Deloitte Consulting LLP. 

"The survey exposes a widening gap between the dwindling supply of skilled workers in America and the growing technical demands of the modern manufacturing workplace," said NAM president John Engler. "It is essential that America close this skills gap if we are to maintain our edge in the global marketplace and remain the world’s leader in innovation.

"Clearly, the broadening skills gap in America calls for urgent action by both public and private stakeholders. A highly skilled, innovative ‘high-performance’ workforce is essential for our manufacturing sector to remain vibrant and to compete successfully in a global economy.  If manufacturers are to remain competitive, the issues of education and training reform must be given at least as much attention  as other top business concerns like trade, taxes, energy and regulatory reform."

More than 80 percent of manufacturers surveyed are experiencing an overall shortage of qualified workers that cuts across industry sectors, reported Richard Kleinert of Deloitte Consulting LLP.

"The pain is most acute on the front line, where 90 percent report a moderate to severe shortage of qualified skilled production employees including machinists, operators, craft workers, distributors and technicians," said Kleinert. "Engineers and scientists are also in short supply, with 65 percent of respondents reporting current deficiencies.

“Manufacturers face the additional challenge of poor skill levels among current employees,” he added, noting that 46 percent reported inadequate problem-solving skills among employees and more than a third cited insufficient reading, writing and communications skills in the workplace. 

"As employers, manufacturers need to do more to develop and engage their employees,” he said. "The talent shortage is not a theoretical or distant problem. Eighty-three percent of respondents indicated these shortages are currently affecting their ability to meet customer demands, with more than half reporting difficulty achieving necessary production levels and 43 percent reporting difficulties increasing productivity."

Stated Manufacturing Institute president Jerry Jasinowski: "The human capital performance gap threatens America’s ability to compete in today’s fast-paced and increasingly demanding global economy.  It is emerging as our nation’s most pressing business issue. Nearly three out of four manufacturers surveyed believe that a high-performance workforce is the most important driver of future business success. Roughly half of the manufacturers surveyed believe that both low cost production and new product innovation are critical to their success over the next three years. With the top drivers of business success inextricably linked to employee quality and performance, the big challenge for manufacturers will be attracting, retaining and motivating a high performance workforce in the face of gloomy demographic and education trends."

Added Engler: "We need a bold agenda of shared responsibility between government, business and educators to increase the priority given to human capital, while improving the quality and performance of our education and training system.  We also must update the image of modern manufacturing in the minds of young people, their parents and educators, and encourage more students to study math and science or follow a technical career path.". 

Among its recommendations, the 2005 Skills Gap Report urges:

· Educators to emphasize science, math and technology-related programs in K-12 curricula and invest more in teacher education;

· State education standards to include career education as measurable criteria for K-12 success;

· Employers to invest at least 3 percent of payroll whenever possible in training for current employees; and

· Government to partner with business to improve the K-12 and community college system to develop a high-performance workforce.

The 2005 Skills Gap Report is based on responses from more than 800 manufacturers of all sizes nationwide and is the first new comprehensive survey about the American manufacturing workforce in four years. It is available at www.nam.org/2005skillsgap.