Manufacturers are optimistic about their industry and the U.S. economy, but are concerned about the ongoing struggle to find qualified workers, according to the 2017 Manufacturing Report from professional services firm Sikich LLP.
In the firm’s third annual report on the manufacturing industry, nearly 80 percent of respondents said they are more optimistic about the U.S. economy compared to last year while 66 percent said the same about the manufacturing industry. And 69 percent expect headcount to increase. Even so, respondents identified addressing workforce challenges as a top priority for their companies, and nearly 60 percent pointed to a lack of qualified workers as a barrier to business growth.
“The use of advanced technologies across manufacturing operations requires workers with a higher level of training and skills,” said Jerry Murphy, partner-in-charge of Sikich’s manufacturing and distribution practice. “Our report found that while manufacturers recognize the gaps in workforce development, many simply are not doing enough to train and equip workers to thrive in today’s increasingly complex manufacturing operations.”
More than half of respondents said their companies have no involvement with high schools, community colleges or universities to develop skilled workers. And more than 80 percent said they provide 40 hours or less of annual training per employee.
“Manufacturers must prioritize workforce training and development within their organizations and collaborate with schools and professional associations to train and recruit talent,” said Joy Duce, partner-in-charge of Sikich’s human resource consulting services practice. “The companies that embrace workforce development as a key initiative will be in a better position to ensure long-term viability and competitiveness.”
Manufacturing Growth Strategies Identified
Manufacturers view organic growth in existing domestic markets and new product or service development as the top opportunities for growth over the next 12-18 months, according to the report. Despite the emphasis on new products, however, 78 percent of respondents said they invest 5 percent of sales or less in research and development. Further, nearly half do not take advantage of research and experimentation tax credits.
“The optimism manufacturers feel in today’s economy is warranted, but our report showcases several areas of vulnerability,” Murphy said. “From workforce development to technology to financial planning, manufacturers cannot afford to grow complacent in an increasingly competitive marketplace. The companies that stay ahead of industry trends and seek constant improvement will be the ones well-positioned to innovate and grow.”
For the 2017 Manufacturing Report, Sikich surveyed more than 250 respondents from companies across industrial sectors, including metal fabrication, industrial equipment, food and beverage, chemical and petroleum, automotive, plastics, and distribution.