Over the past few years, much of the news about the U.S. labor market has focussed on economic uncertainty and slowdowns. Layoffs, delayed hiring, and understaffing, along with increasing use of digital tools, AI, and automation, have dominated the headlines. What the news stories haven’t been telling us is that the demand for technical skilled labor has been quietly accelerating.
The increasing demand for technical talent has become a significant challenge for employers in the manufacturing and industrial sectors. Manufacturers, utility and energy firms, construction companies, and those involved in building AI infrastructure are all competing for the same limited talent pool of skilled workers. For this reason, it’s becoming more difficult to fill open roles that require skilled labor than to hire engineering or IT professionals, office staff, or C-Suite leaders.
When skilled labor roles go unfilled, the repercussions are significant. Slowed production, delayed maintenance, stalled projects, and overstretched staff are operational risks that can seriously impact an organization’s bottom line.
To stay competitive, it’s critical that manufacturers proactively develop workforce strategies that address the skilled labor shortage.
“Technical Skilled Labor” Is A Broad Category
Historically, the phrase “skilled labor” has referred to blue-collar workers in the construction, manufacturing, and transportation sectors. When people think of skilled trades, they often think of electricians, plumbers, and heavy equipment operators. However, in today’s workplace, the skilled trades include a more diverse range of roles.
The manufacturing sector requires workers with a wide variety of skills. Technical expertise alone no longer guarantees success on the shop floor. Workers must continually adapt to rapidly changing technology and increasingly sophisticated equipment. They also need strong soft skills, especially around problem solving, critical thinking, and communication. This combination of hard and soft skills allows technical laborers to work seamlessly across an organization’s engineering, automation, maintenance, quality assurance, and field operations needs.
The roles held by today’s technical skilled workers reflect these new complexities and requirements. Examples of these new roles include:
- Field Service Technicians and Field Service Engineers
- Industrial Maintenance Mechanics
- Automation and Controls Technicians
- Industrial Electricians
- Robotics Technicians
- Instrumentation Technicians
- Quality Inspectors
- Fiber Optic Technicians
- Data Center Technicians
- Photovoltaic (Solar) Installers
As varied as these roles are, they all have one thing in common: they’re becoming increasingly difficult to fill.
Multiple Trends Are Driving Demand
Labor shortages aren’t new. Economic cycles, technical advancements, and population trends have always had a significant impact on the labor market. However, the current technical skilled labor shortfall is tied to several emerging long-term trends.
The AI Infrastructure Boom
The rapid adoption and acceleration of AI systems has created a critical need for technical talent. AI data centers are massive and sophisticated. Beyond the AI software itself, the infrastructure required to house and maintain these systems is complex. Skilled professionals are needed to install and manage electrical systems, cooling infrastructure, fiber optic networks, controls, backup power systems, and ongoing maintenance.
Each time a new data center is built, an entire roster of specialized talent must be recruited for sustained employment. These centers require the ongoing expertise offered by diverse roles, including:
- Electricians
- Controls Specialists
- Maintenance Technicians
- Fiber Technicians
- Field Service Professionals
Manufacturers have long relied on these technical professionals on the shop floor. As AI data centers access the same talent pool for the same skill sets, significant talent shortages are emerging.
Increased Automation In Manufacturing
What the news has covered to some degree over the past few years is how the manufacturing sector has increased its investments in automation. Savvy organizations understand that increasing automation can improve productivity and ensure quality standards are met – which ultimately allows manufacturers to remain competitive and protect their bottom lines.
While there has been some speculation that automated processes will reduce the need for human workers, automation in fact changes what kind of human workers are needed. Technical professionals are required to install, maintain, and upgrade the equipment for robotic production lines, automated conveyor systems, and programmable logic controllers (PLCs).
Automation won’t eliminate the need for technical skilled workers. Instead, it will open up new opportunities through the creation of roles such as Automation Technicians, Controls Specialists, Maintenance Technicians, and Field Service Engineers.
Reshoring And Domestic Manufacturing
Over the past few years, shifting political and economic policies have encouraged reshoring and increased domestic manufacturing within the United States. As governments and private industry ramp up their investments in domestic manufacturing, the need for a technical skilled workforce has necessarily increased.
In tandem with the increasing production by existing manufacturing plants, entirely new industries are entering the American market. New semiconductor facilities, battery plants, advanced manufacturing operations, and industrial expansion are creating entirely new technical roles. This additional demand for technical professionals must access the same talent pool as all other existing and new manufacturing initiatives and organizations.
The Modernization Of Energy
The way we create and use energy is shifting. We’re witnessing the modernization of electrical grids, the development of renewable energy sources, the creation of an infrastructure to support electric vehicles, and changes to industrial energy systems.
These new energy projects are only possible if there is a skilled workforce to support them. As a result, new roles have been created, including those for Industrial Electricians, Maintenance Technicians, Photovoltaic Installers, and Instrumentation Specialists.
As we’re seeing elsewhere, the modernization of energy also requires tapping into the same talent pool as so many other emerging trends within the manufacturing sector. As a result, it is also contributing to the shortage of technical talent.
The Most Critical Roles Are The Hardest To Fill
While it’s becoming increasingly difficult to hire technical skilled workers for any role, organizations are scrambling to fill those roles that have become critical to their operations. In particular, it’s become difficult to secure skilled talent to work as:
- Maintenance Technicians, who keep production lines operating in order to minimize downtime and prevent equipment failure.
- Field Service Technicians, who work to keep client equipment operational, protecting the organization’s reputation and bottom line.
- Automation Technicians and Control Specialists, who support the production environment and minimize disruptions on the shop floor.
- Industrial Electricians, who maintain the electrical infrastructure, which of course is critical to powering the production facilities.
- Quality Inspectors, who ensure product standards and regulatory compliance are met.
- Fiber Technicians and Data Center Technicians, who support the increasing digital infrastructure within manufacturing.
- Mechanical Technicians, PLC Specialists, and Instrumentation Professionals, all of whom are necessary to keep operations running safely and efficiently.
Having just one of these roles unfilled can affect the overall efficiency, production, safety, morale, reputation, and bottom line of an organization.
Workforce Trends That Contribute To The Labor Shortage
While demand for technical skilled labor is increasing because of changing trends within manufacturing, there are also several wider workforce trends that are contributing to the overall labor shortage.
First, demographic shifts are a considerable factor. As retirees exit the workforce, they take decades of institutional knowledge and well-developed soft skills along with them. While recent graduates may have expertise in modern systems and processes, they can’t yet contribute the same breadth of skills and experience.
As well, there’s been a significant decline in the number of young people entering the skilled trades over the past few decades. Combined with the increasing number of technical positions opening up, there simply aren’t enough young people entering the talent pipeline.
Further, hands-on experience is critical in technical skilled roles. Understanding systems and processes well enough to troubleshoot issues or optimize automation can only be developed through time and experience.
The increasing number of technical skilled roles combined with the overall decreasing number of young people entering the skilled trades requires that manufacturers undertake strategic workforce planning to stay competitive.
The Response Of Leading Manufacturers
Meeting current and future workforce needs will require careful planning by organizations within the manufacturing sector. Internal workforce development, partnerships, ongoing recruitment, and flexible workplace models all have a place within a strategic, comprehensive hiring strategy.
Traditional reactive hires are no longer the only way forward. As part of a well-developed strategic workforce plan, organizations should:
- Create reskilling and upskilling programs, apprenticeship opportunities, and mentorship programs, which are excellent ways to develop an existing workforce.
- Establish partnerships with community colleges, technical schools, trade programs, and high school vocational programs to develop talent pipelines.
- Maintain relationships with qualified candidates and engage in continuous recruitment to prevent staffing gaps.
- Work with a reputable recruitment partner to locate passive talent and develop contract staffing solutions to fill roles, scale projects, and manage knowledge gaps.
- Leverage the specialized expertise of consultants for strategic projects, optimization initiatives, and organizational transformations.
- Implement contract-to-hire solutions to evaluate technical skills, fit, and organizational needs before making permanent hiring decisions.
In short, the most successful manufacturers will develop long-term strategic plans that combine various hiring models.
Looking Ahead
Unfortunately, the shortage of technical skilled labor isn’t a new or temporary problem. It has developed (and worsened) over several decades in response to changing demographics, evolving technology, and sociopolitical shifts – all of which have increased the competition for skilled labor across the manufacturing sector.
Organizations must move away from reactive hiring and develop strategic workforce plans that will help maintain productivity, support long-term growth, and ensure they remain competitive.
Despite the rapid shift toward technological adoption and automation, it won’t be technology that determines which companies will thrive over the next decade. Workforce strategy – and the ability to attract and retain skilled technical workers – will instead be the key to manufacturers’ ongoing success.
