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What is the Skills Gap and The Impact on Manufacturing and the Economy

what is the skills gap manufacturing employment stats
As we all catch up from taking a much needed three day weekend this past Labor Day, and after catching the American Made Movie this weekend, I reflect on those who are out there not able to celebrate Labor Day like myself: the Unemployed. This is my first post in a series of four on the much talked about skills gap in manufacturing and it's affect on the economy and employment levels. In this series I will first provide an overview of what is the skills gap, followed by a discussion around if there really is a skills gap, then I will offer some solutions provided by some to close the skills gap, and finally what is the next phase for the manufacturing worker. I hope you find these posts to get you thinking about your own manufacturing facilities, and why there may or may not be a skills gap and what you may be able to do about it to raise awareness of manufacturing in general. Please feel free to provide your thoughts in the comments section below.

An Overview of What is the Skills Gap Numbers in Manufacturing

what is the skills gap beaureu of labor statisticsAlthough the Manufacturing Report on Business, compiled by the Institute for Supply Management, showed a modest improvement in manufacturing conditions in the United States in August, the highly watched employment component declined by 1.1 points to 53.3 in August, still indicating growth but at a slower rate than before.

Some economists and thought leaders in the space of manufacturing blame this slow growth on the hotly debated manufacturing "Skills Gap" with some sources stating there are 3 Million jobs unfulfilled due to the skills gap, yet others say 600,000 jobs are only truly unfulfilled because of the skills gap, and some, as stated by the Boston Consulting Group report, say there are only 80,000 to 300,000 manufacturing jobs.

What is the Skills Gap Anyway?

ACT put out a great study on "A Better Measure of Skills Gaps" offering the very simple definition of a what is the skill gap, stating: the difference between the skills needed for a job versus those skills possessed by a prospective worker. They go further to specifically define the skills gap in manufacturing as: the majority of U.S. examinees are not able to demonstrate the required skill level for locating information. This skill involves the ability to locate, synthesize, and use information from workplace graphics such as charts, graphs, tables, forms, flowcharts, diagrams, floor plans, maps and instrument gauges.

A Book on "What is the Skills Gap"

A technology vet, Gary J. Beach, more than six years ago, decided to begin studying in earnest this much-debated issue, and a subject of ritual complaint among technology executives -- the apparently lagging skills of the American workforce in his book, titled “The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America’s Future” (John Wiley & Sons). His book states that “The skills gap is really an education gap, and it affects us all.” In his book he covers STEM and he offers that today’s headlines about the sorry state of math and science proficiency of American children are nothing new. In 1964, the International Association for the Evaluation of Educational Achievement tested the math skills of eighth graders in 13 countries, and the American students came in next to last. Further the book states that America doesn't need a world of college graduates made up of liberal arts students, but rather students who are proficient in the 5cs -- critical thinking, communication, collaboration, creativity and confidence. A strong young workforce who is both good at math and science skills but also the 5cs will allow the US to thrive by allowing us to out innovate the likes of China and India, even though they may still have higher math and science scores. In short, a well rounded but highly educated work force is needed to fill the skills gap (But more on that in my third installment of my series on what is the skills gap).

A Lot of Lost Manufacturing Jobs

what is the skills gap unemployment rateRegardless of how many jobs are truly unfulfilled, the reality is that although unemployment in July, at 7.4%, is lower than it has been in 42 months, from it's peak of 10.0% in September 2009, there are several unemployed people in America who don't have a job. According to the Institute for Supply Management, there are now only 12,000,000 jobs in manufacturing, compared to 17,000,000 manufacturing jobs in 2000. That's a difference of 5 million jobs in manufacturing alone. As I have expressed in my manufacturing innovation blog post, I don't feel as if these jobs will ever return to levels as a percentage of all jobs that we have seen in the past. That is in large part due to automation and lower level skills jobs being replaced by highly skilled robots, and the increase of outsourcing business process functions such as logistics. The reason I am OK with this notion is that it makes manufacturers more productive, and thus increasing the output and increasing the contribution to the GDP which has a nice economic trickle down affect for other sectors of jobs.

What is the Skills Gap Affect on the Future Manufacturing Worker?

But ultimately, I am not OK with the notion of not teaching our children the importance of making things with their hands. I don't call for a complete process weed out from automation, but rather an understanding of how the automation came about and what are the fundamental steps to get to the next phase.  High unemployment and the growing skilled labor shortage are both symptoms of the same problem in our society -- namely, that we have a desperately skewed and devalued perception of hard work. For some reason, we have stigmatized and diminished the importance of people who work with their hands in this country. And we have allowed ourselves to believe that an expensive college education is the only avenue to success.

For more than a generation, we have encouraged our children to aspire to careers that would enable them to work with their minds and not their hands. So, it should come as no surprise that we have an estimated three million or even just a 600,000 job vacancies in the skilled labor force today that are going unfilled because many people erroneously consider these positions to be beneath their potential or otherwise undesirable.

In my opinion, we need to all talk about this issue, regardless of how many jobs there are in the skills gap. We need more Mike Rowe's and his focus on showing Americans the importance of getting your hands dirty, through his show and mission on "Dirty Jobs", and we need more folks to show their manufacturing facilities to young workers.

What is the Skills Gap Infographic

As I was reading my daily blogs about the manufacturing industry, I came across a great infographic by way of the "Made In Dayton" Blog (which I HIGHLY suggest you subscribe to to get a pulse on the Ohio state of manufacturing). It was made by  WorkBoots.com and is titled "America's Skills Gap". It gives a great outlook on answering "What is the Skills Gap in Manufacturing?" What do you think of America's Skills Gap in manufacturing?

what is the skills gap infographic

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Steve Norall

Steve Norall

VP Of Business Development at Cerasis
Mr. Norall oversees all aspects of driving new business into the Cerasis brand through strategic partnerships.
Steve Norall
Steve Norall

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