Attracting and retaining employees continues to be the top issue for U.S. manufacturers, a new survey shows.

More than 77% of firms that responded to the February 2021 Manufacturing Institute-BKD Small and Medium-Sized Manufacturers Survey said they expect the struggle to find and hire talent to continue into 2021 and beyond.

Source: Manufacturing Institute-BKD Small and Medium-Sized Manufacturers Survey.

This comes at a time when some 18 million Americans are out of work due to the coronavirus pandemic.

"This is the paradox in the labor market, and one that flies in the face of conventional wisdom given the number of unemployed Americans," the institute noted in the survey summary.

"And as the manufacturing economy continues to improve, the workforce challenge is likely to grow."

Jobs Recovery

One year ago, America’s unemployment rate was 3.5%—a 50-year low—and the manufacturing sector employed 12.85 million people, close to its highest level in more than a decade.

Although manufacturing employment fell by 1.36 million workers from February through April 2020, the industry has since recovered 55% of those lost jobs.

Connecticut's manufacturing sector has recovered 63% of jobs lost to pandemic-related disruptions.

Connecticut's manufacturing sector employed 158,200 workers a year ago—3.5% below the high of the past decade—before losing 7,200 jobs in March and April to COVID-19 disruptions.

The sector has since recovered 63% of those jobs, including strong growth in December as the state's overall job recovery stalled for a second month.

“While [U.S.] manufacturing production plummeted 20% between February and April 2020, output was down by just 2.6% by December and a handful of major sub sectors were near their pre-pandemic levels of production,” the survey said.

Recruitment Challenges

A vast majority of survey respondents—77%—said the top areas they expect to have the most troubling finding workers are manufacturing and production roles.

Other areas included maintenance, repair, and installation (42%), engineering (39%), industry knowledge (37%), “soft skills” (31%) and sales (20%).

In fact, the survey noted that the lack of skilled workers has forced some manufacturers to turn down work.

Some 63% of manufacturing leaders said they are responding to this by having current employees take on more work.

Other options they are using include creating or expanding internal training programs (47%), temporary staffing services (42%), collaborating with educational institutions on skills certification programs (39%), and encouraging likely retirees to stay longer (33%).

Workplace Changes

The pandemic has also changed the workplace, manufacturing leaders said.

More than 83% improved workplace safety measures and requirements, with nearly two-thirds citing a need for increased worker flexibility.

“The priority was keeping the labor force healthy, but with childcare options limited and schools often operating virtually, companies also recognized the logistical hurdles that many employees were facing in their personal lives,” the survey noted.

Three-quarters of respondents said a stronger domestic economy was key to driving growth.

That caused 64% of respondents to reevaluate what work could be done remotely, while 56% noted that they were reengineering the production process with social distancing in mind.

Three-quarters of respondents said a stronger domestic economy was key to driving growth for their companies, followed by increased efficiencies (59%), new product development (53%), investments in new technologies (44%), and worker training, upskilling, and professional development (43%).

Other Findings

Other findings include:

  • More than 77% were making technological investments at their businesses to cut costs in the production process, with 73% were doing so to improve efficiency 
  • Roughly 47% were reevaluating supply chains
  • About 20% cited the need to speed operations automation
  • About 20% said the pandemic allowed them to offer new products or services to their customers