Age, digital transformation, and solving the manufacturing skills gap

The sector is in the midst of a talent crisis. As demand for skilled workers rises, employers are struggling to fill positions due to a toxic combination of labour shortages and the manufacturing skills gap.

According to industry association Make UK, just over a third (36%) of vacancies at all levels are now proving hard to fill, compared to an average rate of 24% across the wider economy.

We’re seeing an increasing proportion of firms, about one in 10, take longer than 12 months to fill a vacancy. This is having a significant impact, not just on fulfilling their order books, but on future planning for growth and sustainability.”

Jamie Cater, Senior Policy Manager, Make UK

Ageing workforce and early retirement drive knowledge loss

Part of the problem is an ageing labour force. The proportion of the UK’s working age population between 50 and the state pension age will rise to 34% in 2050. This compares to only 26% in 2012. This is an increase of about 5.5 million people, as reported by the Government Office for Science in ‘Future of an Ageing Population’.

The manufacturing sector is particularly vulnerable to this trend, as many workers have cut their hours, retired early, or plan to leave over the next five to ten years.

This means employers are losing vital skills and experience. As a result, putting transition plans in place is vital to retain valuable knowledge and limit the manufacturing skills gap.

Technology and the manufacturing skills gap

It’s vital that transition plans identify and implement ways of upskilling and reskilling employees as the sector moves inexorably towards digitalisation in the context of Industry 4.0.

Technologies like artificial intelligence (AI), advanced robotics, cognitive automation, data analytics, and the internet of things (IoT) are being used to transform manufacturing. Their influence extends over three key areas:

• Product life cycle
• Value chain management
• Creation of smart factories

The aims of these initiatives are to increase efficiency, reduce errors, and save money. But they can only succeed with an appropriately skilled and competent workforce.

As the pace of technological change quickens, there are concerns that a skills gap is developing. Employers need to ensure they are preparing the workforce for a different manufacturing landscape.

The number of physically demanding or routine jobs will decrease, while the number of jobs requiring flexible responses, problem solving, and customisation will increase. Employees will have to be even more open to change, possess greater flexibility to adapt to new roles and work environments, and get accustomed to continual interdisciplinary learning.”

M Lorenz et al, Man and Machine in Industry 4.0, Boston Consulting Group

An effective talent management system provides a single, centralised platform that helps identify learning and development needs across the workforce. Zellis’ solution is integrated with our HR system. This makes it easy to see and understand individual employees’ needs and status as well, such as training and compliance progress.

Does manufacturing have an image problem?

Despite the huge benefits promised by Industry 4.0, it is only heightening skills and labour shortages. Jobs are morphing and new posts are continually being created with more complex expertise requirements than ever before. These include smart factory manager, digital twin engineer, and robot teaming coordinator roles.

However, there may be a perception issue, with not enough young people seeing the industry as an attractive proposition. The misconception is that manufacturing means low-paid, low-skilled, and involving the operation of heavy machinery to undertake repetitive tasks.

It seems the reality of highly mechanised plants and tech-enabled problem solving has yet to filter into the mainstream.

But it’s not just the perception of technology in the factories themselves that needs to change. The same is true of recruitment and onboarding processes, as well as the wider employee experience once people have joined. This includes training and upskilling activities, which are not only vital to enable business transformation but also to boost employee engagement.

Harness digital training and talent management for better employee experiences

Training and talent management systems that help create a positive employee experience are just as important as the digital technology on the production line. They should, therefore, constitute a key element of any employer’s digital transformation plans.

The latest generation to enter the workforce, Generation Z, has never known life without easy-to-use consumer technology like the smartphone, social media, and instant information search online.

They expect workplace systems to be just as easy to operate.

Effective HR systems and self-service tools have an important role to play in attracting and engaging these young workers by providing them with the digital experience they expect. This includes enabling them to manage their own shifts and request time off via their smartphones. Providing them with a personalised learning platform helps to embed training and development activities into the flow of work.

As well as attracting young workers, smarter training approaches will help to retain millennials as they progressively take over the leadership and management roles currently held by Gen X and the last of the baby boomers.

Supporting their ongoing development will broaden their Industry 4.0 skillset and make them more likely to stay and guide manufacturing into the future.

Why do major manufacturers like BAE Systems trust Zellis? See how we work with employers in the sector.