Countless news reports point to the skills gaps among U.S. manufacturers, particularly among small- and mid-sized companies. Executives quoted in these articles typically cite a familiar litany of complaints about potential employees: poor math skills, inability to pass drug tests, lack of work ethic, don’t like manufacturing, blah, blah, blah.

But the topic that should really concern these leaders is how terrible most companies are at leveraging the latent talent they already have — and augmenting it selectively with new employees. The sad truth is that most manufacturers, for all their worry about talent, don’t have the simple strategies, plans, and best practices in place to address those concerns.

The numbers are clear: Almost half of U.S. employers report that talent shortages have a medium to high impact on their business. Yet a full 20% of these companies have no strategy to overcome talent shortages.[1] The MPI Group found that 11% of manufacturers have no human-capital management strategy, while another 27% have only a generic strategy with little or no functional involvement (i.e., operations and production staff are disconnected from HR practices).[2]

How can a manager break his reliance on the “skills gaps” excuse? By deploying the 3Es (Educate, Engage, and Empower) in a long-term strategy:

  • Train new hires: Manufacturers can’t expect new hires to excel without both training and broader perspective of organizational objectives. Leading companies (e.g., Toyota) deliberately place new hires in positions outside their comfort zones and areas of education, supporting them with training on the job as they learn more about the company and its processes. The goal is to make sure that everyone keeps growing — and avoids complacency.
  • Engage employees: Employees are just like their bosses: they need motivation and incentive to perform at peak levels and assume new roles. Research done by Dr. Thijs van Rens, Department of Economics, University Warwick, found that low wages are primarily to blame for STEM (science, technology, engineering, math) skills gaps, rather than ineffective education systems. “Businesses complain about the lack of workers with STEM skills, but are unwilling to raise wages for these workers — or reduce wages for workers with skills that are less in demand.”[3] Which wages at your company are non-competitive? Which are too high?
  • Empower employees: Employees at every level of the company must have the skills, training, and authority to make informed decisions that delight customers and create margin. Empowerment is the toughest challenge for manufacturers, because it requires mutual trust and respect between employees and management — a major cultural shift at many firms. MPI found that about half of all manufacturers empower less than half of their workforce; 20% empower nobody (see Empowerment).[4] 

You can complain about the skills gap, or you can leverage the 3Es and fix it.

What’s it going to be?

Empowerment
% production employees that participate in empowered or self-directed teams

% of plants
0% 20%
1 – 25% 29%
26 – 50% 13%
51 – 75% 18%
76 – 99% 10%
100% 10%

[1] 2015 Talent Shortage Survey, ManpowerGroup, May 2015.

[2] Next Generation Manufacturing Study, The MPI Group, 2104.

[3] “Low wages not education to blame for skills gap,” University of Warwick, Dec. 8, 2015.

[4] MPI Manufacturing Study, The MPI Group, 2015.