Despite the fact industries such as manufacturing face high turnover and retirement numbers, addressing the skills gap that would fill those vacancies remains a challenge. With two out of every five manufacturing companies averaging 20% turnover each year, that represents 43% 1 of companies in the industry losing valuable skills and knowledge. Manufacturers polled about their top challenges yielded the following result: 99% – finding skilled new hires, 92% – upskilling incumbent workforce, 84% – onboarding new employees. The skills gap is a real threat to growth.1
Embedded knowledge will only benefit a company while skilled employees remain part of their workforce. If those experienced workers or managers move on or retire, they take their knowledge with them creating a skills gap. This resulting Cost of Turnover (CoT) is much higher, and much of that cost is not accounted as business expenses. Some studies (such as SHRM) predict that every time a business replaces a salaried employee, it cost 6-9 months’ salary on average.2 The skills gap significantly impacts the bottom-line.
Lost productivity, use of temporary labor, and loss of opportunity are just some of the factors created by the skills gap which are not tracked by a large percentage of companies in manufacturing industries such as automotive, technology, and aerospace. Although there is a large pool of unemployed candidates willing to fill the roles left vacant by experienced workers, some simply do not have the requisite skills, and companies are struggling to provide training opportunities.
Addressing the Status Quo
A large part of why the skills gap continues to grow is a company must first look at the status quo by examining their current strategies if they expect to address the skills gap. As experienced workers leave, it may be the result of a number of common challenges:- Management commitment to a people strategy;
- Time – making the time for training;
- Budget to invest in learning and development;
- Company culture – incorporating a learning environment for employee training.
