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Fears of a U.S. manufacturing skills shortage are exaggerated: report

The projected shortage of skilled labor in the U.S. will be far less of a problem than many people believe in the short term, and it is unlikely to prevent a resurgence in U.S. manufacturing in the next few years, according to a new report...


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August 27, 2013 by Canadian Plastics

The projected shortage of skilled labor in the U.S. will be far less of a problem than many people believe in the short term, and it is unlikely to prevent a resurgence in U.S. manufacturing in the next few years, according to a new report by The Boston Consulting Group (BCG).

“Is the US really facing a manufacturing-skills crisis?” the report, The US Skills Gap: Could It Threaten a Manufacturing Renaissance?, asks. “We believe such fears are overblown – at least for the near term. Our research finds little evidence of a meaningful and persistent skills gap in most parts of the US, including in its most important manufacturing zones.”

“The real problem,” the report continued, “is that companies have become too passive in recruiting and developing skilled workers at a time when the US education system has moved away from a focus on manufacturing skills in order to put greater emphasis on other capabilities.”

Through an analysis of job vacancy and wage data, as well as on a BCG survey of 100 companies with U.S. manufacturing operations, BCG estimated that, in the short term, the U.S. currently lacks between 80,000 to 100,000 highly skilled manufacturing workers. But those numbers represent less than 1% of the nation’s total manufacturing workforce and less than 8% of its highly skilled workforce of approximately 1.4 million.

Moreover, the skilled-worker shortages that exist in the U.S. are localized. Only five of the nation’s 50 largest manufacturing centers – Baton Rouge, Louisiana; Charlotte, North Carolina; Miami, Florida; San Antonio, Texas; and Wichita, Kansas – appear to have significant or severe skills gaps, BCG said; ninety percent of the biggest manufacturing areas do not show evidence of significant manufacturing-skills shortages.

But there are long term problems looming, BCG said. American companies are not doing enough to cultivate a new generation of skilled manufacturing workers, many have scaled back their in-house training over the years, and they underutilize important sources of new talent such as high schools and community colleges.

Also, the retirement of aging workers, as well as heightened demand for workers, could cause series skilled-labor shortages in the U.S. By 2020, the nation could face a shortfall of around 875,000 machinists, welders, industrial-machinery operators, and other highly skilled manufacturing professionals, according to the U.S. Bureau of Labor Statistics and BCG estimates.

“Quite often, the skilled workers are available – just not at a price employers are willing to pay,” explains Harold L. Sirkin, a BCG senior partner and coauthor of the research. “Or companies do not bother to recruit at community colleges and vocational schools. In other instances, experienced skilled workers with good academic training are available – sometimes in-house – but companies are unwilling to invest the time and money to train these workers to use new technologies or specific machines.”

“Investment by the public and private sectors in skills development needs to increase and accelerate. Companies can meet many of their needs on their own through more aggressive recruiting and training,” said Michael Zinser, a BCG partner who leads the firm’s manufacturing practice in the Americas. “These efforts must be supported by a nationwide program of science, technology, and engineering training to ensure that there will be sufficient skilled workers in key trades.”

For more on the BCG report, click on this link