- Manufacturers' economic optimism is on track for an all-time annual high in 2018, but there's one thorn in their side: an inability to attract quality labor, according to a quarterly economic survey by the National Association of Manufacturers (NAM).
- Of the 718 NAM members surveyed, 45.4% said "the inability to attract and retain workers is the biggest threat to my business." One in four respondents said they turned down new business due to this challenge, while one in three said they held off on expansion plans for the same reason.
- The NAM highlighted the necessity of up-skilling, vocational education and veterans' hiring programs to help fill the 500,000 currently open manufacturing jobs on the market.
The U.S. business world as a whole is competing for labor, as a strong economy boosts demand across the value chain and new opportunities abound.
Manufacturers are competing not just with each other but — in certain markets — also with warehouse providers, transportation companies and technology companies for a qualified workforce.
The NAM economic outlook survey provides a glimpse into how manufacturers are looking to compete. Retraining, vocational and upskilling programs, as mentioned by NAM, are essential to filling the manufacturing worker pipeline.
But in a workers' market, no one solution is enough, as wages, benefits, schedules, and type of work all come into play upon hiring.
The survey shows, on average, respondents expect sales to rise 5% and production to rise 4.9% — but only expect to increase inventory by 1%. The increased production, then, will come from an increased reliance on labor productivity, along with supply chain efficiency to keep inventory low.