The issue of skill shortage in the manufacturing industry.
Some manufacturers are not competitive.
Temporary adjustment problems.
Increased rate of technical change.
Communication, coordination, and disaggregation.
More on the effects of skill shortage.
How is or can be the issue addressed in manufacturing?.
Focusing on the implementation of effective HR practices.
Focusing on filling the training gap.
Other strategies of countering skill shortages.
Addressing the shortage of skills as a manager
Improving advertising efforts.
Skill shortage is a significant area of concern due to its impact on the economic growth of the nation. This study aimed to evaluate the issue in the manufacturing industry. In this, different reliable sources of information such as peer-reviewed journal articles, government and company reports were considered. The research paper aimed to cover three areas: the issue of skill shortages and its effect on manufacturing; how is the or can be the issue addressed in manufacturing; addressing the shortage of skills as a manager. The skill shortage was identified as the disbalance in the equilibrium of demand and supply of talent for the organisation. Various factors were identified which lead to a shortage of skills.
This included lack of competitiveness; adjustment problems in the market; frictions from employees; high rate of technical change; lack of effective communication and coordination; and unemployable graduates. This shortage of skills negatively influences the productivity, competitiveness, growth and development of the manufacturing firms. Further studies helped to identify the current solutions to skill shortage. This included focusing on the implementation of effective HR practices to attract and retain quality employees in the organisation through better focus on compensation, recognition and performance appraisal and more; focusing on better education and training for the workers; collaborating with the public sectors; investments in training programs; outsourcing; and retaining experienced workers.
As a manager, various strategies could be identified with positive implications in terms of mitigation of the shortage of skills in the manufacturing industry. These included improving advertising effects (considering social media); collaborating with public sector including educational institution; improving hiring process; consider outsourcing; improve focus on vocational training and education; provide better compensation and benefits; and retain experienced workers in the organisation. This would help the manager to mitigate the shortage of skills and ensure the sustainable growth of the manufacturing firm.
Employees are the main functioning unit in any organisation. There are wide varieties of companies which operate in different sectors, all with employees as a determining factor for performance. These companies serve different customers bases and due to the differing needs in the market, the companies are required to consider employees who are able to help the company ensure the market needs. Osborne and Hammoud (2017), in a study, described the important role that the employees play in a workplace. As per the study, the performance and survivability of the organisations depend on the employees’ engagement and efforts. Additionally, the research highlights that the skills of the workers are also an important factor which could be considered as crucial for the companies to achieve their organisational goals.
However, the business needs of the organisations affect what kinds of skills are required in the employees. Kantane et al. (2015) also emphasised on the change of skills requirement being experienced in the market. Moreover, it appears that the companies are focusing on continuously refreshing the skills and knowledge in the companies to stay competitive. However, it raises the questions of what different skills do the company focus on and whether this requirement is being fulfilled or not. The requirement of skilled workers is continuously increasing as more companies emerge in the market. This should affect the job market and might also lead to a shortage of skills. One of the emerging markets is the manufacturing industry.
Industry 4.0 is an ongoing topic of study which has caught the attention of many including the business leaders, researchers and management specialists (Ghobakhloo, 2018). The growth of the manufacturing industry is experiencing a positive flux with time as it continues to grow. With Industry 4.0, the manufacturing has shifted or elevated to the use of technology to support the production needs of the companies. However, the shift in the market towards digitalisation has also resulted in the creation of a need for employees with different sets of skills. This is being experienced by workers from all different operating sectors and not just manufacturing processes. The gap in the skills that are required by the businesses and what is being supplied in the market has led to a shortage of skills.
Here, the demand and supply of talent are not in the state of equilibrium where there are possible implications for the businesses. However, the emerging needs of the market are not solely responsible for the issue of skill shortage affecting the businesses. There exist other factors as well such as lacking in the skills and education of the employees, poor HR practices and ineffective hiring and selection and many more (Cappelli, 2015). This paper aims to expand on the issue of skill shortages in the manufacturing industry.
In this, the first section will discuss the issue of skill shortage and how it affects the manufacturing industry. After discussing this, multiple factors will be discussed which lead to skill shortages n manufacturing industry. Moreover, the paper will discuss different areas/concepts that are being or can be considered in the manufacturing industry to be able to challenge the skill shortage. Lastly, various factors/components will be discussed which can be considered as a manager in a manufacturing organisation/firm to overcome or mitigate the challenges offered by skill shortages.
For the labour market to function smoothly, there needs to be an equilibrium in the supply and demand for skills. However, when equilibrium is not maintained, it leads to a shortage of skills (Weaver & Osterman, 2017). The relation between the supply and demand for skills and the match of workers with a job opening have been studied closely to reveal that both are related. A mismatched opportunity has been provided to influence the skills gap. Due to mismatch in the labour market, unemployment increases affecting economic growth negatively. The issue of skill shortages appears to be affecting all different economy-contributing sectors. Paul (2018) described that skill shortage was a social issue which needs noteworthy attention as it influences the Indian IT companies significantly.
The skill shortage elaborates a category of situations where the employers are unable to employ skilled workers. Not only could it relate to the organisations being unable to detect skills, but it could also signify a lack of skills in the market which suit the company needs (Cappelli, 2015). As per Paul (2018), around 57% of the organisations face the issue of hard-to-fill vacancies, while around 43% of this continues to experience skill shortages. The main impact of the skill shortages has been described to be the hindrance to economic growth.
Skilled workers are the working need of any organisation to sustain benefits while meeting the production needs, lack of skills will influence the organisations’ ability to support themselves and in turn the economy. Moreover, Malik, Manroop and Patel (2017) described that the skills shortage affects the ability of the businesses to achieve their strategic goals. The human resources being one of the key sources that provide a competitive advantage to the companies, any shortage of skills which is not managed immediately and effectively will affect the business growth and development.
Some Manufacturers Are Not Competitive
There are different mechanisms which could explain the onset of skill shortage. The concept of competitive business is not new. Competitiveness has been linked to innovation as competitive behaviour of the organisations encourages the organisations to adopt innovative methodologies which influence growth (Distanont & Khongmalai, 2018). This also suggests that the lack of competitiveness could negatively influence an organisations’ ability to achieve growth. As per Weaver and Osterman (2017), when manufacturing organisations are unable to grow, it affects their ability to attract and retain skills which further influences its growth.
Temporary Adjustment Problems
Another area which could influence the conditions to result in a skill shortage is the temporary adjustment issues. Since the technologies are always advancing, the organisations are required to adjust to the new changes. However, adapting to these new changes might not be achieved effectively that could create further issues in the organisation. Moreover, some technologies could receive a sudden increase in attention. Adapting to the sudden change could be difficult as there might not be sufficient skills available in the market to support the adaptation (Weaver & Osterman, 2017).
Another issue influencing the shortage of skills is the work-related attitudes of the workers. According to Johnson, Umoh and Amah (2016), the work-related attitudes of the employees in the manufacturing firms in Port Harcourt were influenced by the training methods and the training quality. The employee attitudes influenced their motivation which affected their engagement in the workplace. Moreover, the attitudes of the workers in the manufacturing companies towards the training programs can hinder skills development. This could urge the employers to forego the skills which incur additional costs to the company leading to skill shortage due to internal conditions of the organisation. Weaver and Osterman (2017) present that is especially experienced by small-sized companies as they lack economic sustainability which affects their ability to shell out increased amounts of finances to support the training of the workers.
Increased Rate of Technical Change
The advancing technologies are asking change from the organisations in order to stay competitive in the market. As per Cascio and Montealegre (2016), this is resulting in changing how the organisations work. The emerging technologies such as big data and IoT have influenced the companies to innovate and develop strategies which will be able to make the best out of these advancements. The technical change affects the manufacturing companies as it results in making some skills redundant while increasing the need for other skills. These new in-demand skills could create a shortage of skills if there is a lack of availability of workers who are capable of performing the tasks required in emerging technologies (Weaver & Osterman, 2017).
Communication, Coordination, and Disaggregation
Another issue which results in the creation of a skill shortage is the lack of communication, coordination and disaggregation in the process. The equilibrium in the supply and demand of skills could be influenced when employers and employees are not effectively communicating their requirements and what they are willing to offer to one another. Sometimes, the organisations are willing to provide higher benefits to deserving employees. However, it becomes less possible to attract skills when the organisation is not effectively communicating this. The lack of good communication influences coordination between the employer and the employees consequently damaging the potential connection and employment opportunities (Weaver & Osterman, 2017).
Additionally, this also relates to the hiring difficulties faced by the organisation. Paul (2018) presented that the skill shortages are experienced by the organisations could be related to the ineffective HR policies in effect. Moreover, since the skills demand of the organisations could change with time and needs of the market, the companies are forced to adopt different hiring strategies to attract rightful talent which is challenging to accomplish. This could be due to the lack of enough financial resources in the organisation. It could also occur due to the availability of highly qualified skills with possible mismatch leading to poor hiring. Furthermore, the inefficient HR policies influence not only attraction but also the retention of the skills in the organisation.
Furthermore, there are manufacturing companies which consider the disaggregation of the markets. This would mean that the companies are focusing on serving products to different market segments. Ensuring this for a company is challenging as it seeks employees who are adept in more than one skill at a time. Although the numbers of such manufacturing establishments have been reduced over the decades, it still influences the employability of the skills already available in the market. As a result, here as well, the demands of the companies’ results in the creation of a shortage of skills (Weaver & Osterman, 2017).
According to Paul (2018), the recruitment and selection of skills in the companies are also influenced by the lack of appropriate educational and practical expertise. This is related to the skills required of the businesses. Research suggests that the learning experience of the workers influences the employability of workers in the manufacturing industry (Kim, Hawley, Cho, Hyun & Kim, 2015). A study done by Kim et al. (2015) involved the workers employed in the South Korean manufacturing industry. The researchers found that the low level of education and poor skills of the workers was seen as a negative factor when being recruited. Moreover, Healy, Mavromaras and Sloane (2015) highlight that the labour markets encounter variations in the employees in terms of under-(over-) skilling and under-(over-) education which consequently influences the likelihood of the employers to hire the workers.
More on the effects of skill shortage
A 2018 Deloitte study many organisations are experiencing the shortage of skills. As per the report, between 2017 and 2028 around 1.96 million additional workers need to be hired to support the increasing demand of the economy (Deloitte, 2018). Although the report assesses the US job market, it helps to identify the concerning situation of skill shortage. The lack of skills identification in the manufacturing industry creates employment bottlenecks affecting the jobs of millions of workers. For the manufacturing businesses, this would lead to straight-up limitations in the productions. As per Deloitte (2018), around US$454 billion could be at risk by 2028 if adequate skills are not identified by the manufacturing organisations.
The lack of skills in the manufacturing would result in increased time required by the rest of the workers to spend in the company to sustain the business needs. The companies will need to pay these employees with additional allowances, which on constraint budget can be difficult for the businesses (Camps, 2015). Moreover, the continued stress of overworking could change the work-related attitudes of the workers which could show in the increased turnover intentions of the workers. Moreover, in such cases where the employers face the increase in the potential turnover of the skills, they might be forced to increase the benefits of the employees to retain them. However, this will be challenging to accomplish with decreased growth and profitability during skill shortage and resulting in decreased productivity.
Additionally, guaranteeing the successful retention of the skills is not possible even with the increase in the employee benefits. Furthermore, the decrease in the capacity resulting from the skill shortages influences Brunello and Wruuck (2019) also agreed about the negative implications of skill shortage. As per the researcher, skill shortages result in productivity losses. Moreover, associated mismatches of the skills also hurt the organisations in the form of training and hiring losses.
The manufacturing companies will need to consider the challenge that the skill shortage presents in the development of effective interventions to overcome the same. There have been limited studies which discuss the skill shortage in the Australian market (Healy, Mavromaras and Slonae, 2015). Nevertheless, the consequences which the manufacturing businesses have to face are quite evident in terms of reduced productivity, higher risk to losses and decreased profitability.
Given the seriousness of the concern related to the shortage of skills and its effects on the manufacturing companies, various strategies have been proposed by researchers who are being implemented to overcome skill shortage. Understanding the different challenges is important to determine the potential ways to address the issue.
Focusing on the implementation of effective HR practices
Kimmell and Martin (2015) described that the hiring difficulties faced by the manufacturing companies can be countered through the introduction of better HR practices in the organisation such as performance appraisal, knowledge sharing, safe workplace, skills and training, compensation and so on. The researchers agree to the previously presented constraints of the companies to improve the benefits of the employees following the skill shortages in a competitive environment. Moreover, it was presented that the workers are unmotivated to stay in the firms due to poor recognition and lesser benefits. Although the firms agree that improving employee benefits will help to retain the workers, achieving that effectively is itself highly challenging for the workers.
Therefore, the firms need to tend to strategies which enable them to identify ways using which the firms can successfully increase employee benefits without negative consequences (Kimmel & Martin, 2015). Perini et al. (2014) in a study discussing the recruitment difficulties being faced by the manufacturing companies present strategies which are being and can be used for attracting talents in the organisation. The researchers present that manufacturing firms could focus on particular segments such as teenagers and young adults. To achieve this, the firms will implement strategies which can help to attract talents and direct them towards the manufacturing industry.
Although IT companies are not directly involved in the manufacturing industry, companies like TCS and Infosys offer solutions and services to support the manufacturing firms. In this, Paul (2018) presented that Indian IT companies who also have been experiencing skill shortages focus on improving their HR policies. Some of the factors which these companies considered to overcome the barrier of the shortage of skills include compensation management for the existing employees and the new hires. This included providing benefits such as sick leaves, paid vacations and different kinds of insurances, in addition to competitive pay. In addition, rewards management were also provided to be influential in attracting and retaining talent in organisations. Similar strategies are applicable to manufacturing sectors irrespective of the companies.
Furthermore, Kimmell and Martin (2015) described that employee retention and attraction in the manufacturing firms could also consider the career pathway ensured by the firms to the employees. It has been seen that employees who feel restricted with the growth opportunities offered by the organisations could result in increased turnover intentions which contribute to skill shortages. For this, the firms have been found to focus on ensuring a career pathway for the employees. Additionally, it has been provided that manufacturing firms focusing on providing career and skills orientation to their employees can achieve a higher level of attraction and retention of talents in the organisation (Perini et al., 2014).
Focusing on Filling the Training Gap
The skill gap being experienced by the firms in the manufacturing industry has been provided to be encounterable using effecting training and educational programs for the workers. This gap in the skilled workers could and should be viewed as the decline in availability and quality of the training respectively (Kimmell & Martin, 2015). Brunello and Wruuck (2019) have also emphasised the importance of effective training and skills improvement and development for efficiently matching the skill shortages. The poor skills of the workers are a reflection of the quality of the training and education which the workers might have received in the past. Therefore, one of the ways which the manufacturing firms could overcome the skill shortages would be to enhance the employability of the workers through initiatives involving better educational and training opportunities to harbour talent for the organisation.
Paul (2018) also discussed how the IT companies in India were increasingly focusing on the training programs for their employees. It was provided that the training and development could be an effective way to improve the skills of the workers which will consequently help to improve their competence in terms of the required skills in the manufacturing firms. Moreover, the study presents the significance of focusing on the training and development of the employees in a competitive environment. These firms were seen to implement development programs which targeted multiple facets that influenced the employees in the organisation such as talent development, practical training, diversity of talent, and talent management (Paul, 2018).
Furthermore, Lowe (2015) presented that the US automotive manufacturing firms have been readily accepting of the performance development models which gave high emphasis to the skills development and training of the employees. As per the research done by Lowe (2015), the manufacturing firms also tended towards increased investments on the skills development and training models to ensure that the employees met the talent demands of the manufacturing business. This was found to be helpful in achieving gains and profits in the long run even though it resulted in increasing the costs initially. Moreover, these companies, while focusing on improving the skills of the employees, also ensured that effective HR practices were in place to prevent the build-up of stress and tension in the workers as it could lead to higher turnover which was the opposite the manufacturing firms wanted at the time of skill shortage.
Furthermore, training has been agreed to a viable alternative to the increase in wages if the skills are learnt quickly and with relative ease. In addition, the training aspect when ensured by the Australian companies could help to reduce the unfilled vacancies as the firms now develop the workers to meet their needs (Healy, Mavromaras & Sloane, 2015). According to Kimmell and Martin (2015), the training programs for the talents in the manufacturing firms should also focus on workers which require a lesser amount of training. This is due to the fact as if the workers who have been trained leave the organisation, it would be a loss of resources of the firms. The training and skills development have also been provided to be helpful to raise the satisfaction of the talents due to improved flexibility and capability, thereby helping overcome the shortage of skills.
Other Strategies of Countering Skill Shortages
Other than focusing on the HR practices utilised by the manufacturing firms and training of the workers, strategies involving co-investment also offer a potential solution to the skill gap. As per Kimmell and Martin (2015), the increasing demand for skills and the lack of enough skills to support this need has been an ongoing challenge for the manufacturing firms. Investment offers significant opportunities for the manufacturing firms to act on the shortage of skills affecting their growth and profitability. Snell (2018) discussed the revitalisation of the US manufacturing industry in which it was presented that active investments in the vocational education for the youth could help promote interests of the youth towards manufacturing processes.
Kimmel and Martin (2015), however, provided that the community colleges are not able to fulfil the learning requirements of the manufacturing industry which affects the employability of the youth students. Active investments in vocational education and training opportunities have been provided to help in bridging the skill gap. According to the researchers, the collaborative environment could be developed to support engagement and improvement of the students through manufacturing-related curriculum and programs. This could involve support from the non-profit organisations, community colleges, public sector and the high schools as well. Another strategy that has been discussed to be implemented a lot of manufacturing firms today to overcome the issue of shortage of skills and support the demands of their customer is associated with the use of outsourcing strategy (Deloitte, 2018).
The survey conducted by Deloitte (2018) considered around 400 manufactures in the US to present a 42% inclination or interest in outsourcing as a strategy of countering skill shortages. Despite the potential risks of outsourcing such as the product quality and protection of the intellectual property, the manufacturing firms can use outsourcing methods to ensure customer needs even in the presence of shortage of skilled workers. Outsourcing has been provided to be helpful in obtaining specialist knowledge, reducing the labour costs which come with hiring and training workers in-house and smoothing the fluctuations in the product and demand (Healy, Mavromaras & Sloane, 2015).
Furthermore, Brunello and Wruuck (2019) presented that policies could be developed, similar to IT companies presented by Paul (2018), where the skill needs of the company are anticipated through effective marketing research and analysis. This could help the companies to prepare for the variations in the market needs. Furthermore, it was presented that colleges and high schools are not well suited to support the employability of the workers. Therefore, the companies should focus on ensuring apprenticeships for the youth employees. Moreover, Deloitte (2018) also presented that the manufacturing firms’ need could be supported by the contributions from the experienced albeit workers.
To support this, effective HR practices will need to be developed to accommodate the needs of the oldest employees while possible aiming to retain them in the company. Additionally, the development of specific training environment which support the needs of the employers has also been provided to be an option being used by the manufacturing workforce in the US (Lowe, 2015). Although it is related to the training and development of the workers, it focuses more on the integration of digital technology to support the talent in the organisation. Furthermore, emerging organisations in the manufacturing and production industry are being seen to promote the use of digital technologies to enable the workers to get accustomed to the newer needs of the market (Matt, Orzes, Rauch & Dallasega, 2020).
The issue pertaining to the shortage of skills is real and has been studied by different researchers. Workers are the essence of any organisation, especially the manufacturing industry which is currently experiencing a significant shortage of workers with predictions of the situation becoming even severe by the next decade (SHRM, 2019). This signifies the importance of focusing on this issue at the earliest as it can significantly affect the productivity and associated profits of the manufacturing firms. Salleh, Rosline and Budin (2015) described that the managers increasingly experience the lack of skill shortages. The issues which the managers encounter include successfully attracting talent and talent retention.
Various issues or possible reasons were identified by the researchers which continue to influence the issue of hiring in the organisations. Some of these reasons include lack of employable candidates graduating from the colleges, increasing competitiveness in the market, lower benefits and compensation for the employees, limited opportunities for career advancement, mismatch of skills required and present, sudden changes in the skill requirements presented by the market and so on (Salleh, Rosline & Budin, 2015). Since unattended and large scale shortage of skills has the ability to influence the economic growth, tending to effective strategies which can help to overcome skill shortage needs to be the top priority of the manufacturing firms and their managers. As a manager, different strategies could be initiated and implemented to effectively resolve the shortage of skills in the company.
Improving Advertising Efforts
Advertising strategies have been provided to be an effective way of promoting the company, the brand, to the customers (Tikson, Hamid & Mardiana, 2018). The same is applicable when trying to attract the potential workforce for the company. Therefore, one of the strategies which will be used to solve the issue of skill shortage is advertising. Various platforms exist which can be used to achieve successful advertisement and promotion of the skills requirement and employment opportunities in the organisation traditional and digital media. Aggerholm and Anderson (2018) described the emerging use of social media tools for recruitment purposes also known as ‘Social Media Recruitment 3.0’.
Lack of communication, engagement and collaboration has been discussed to affect the selection and recruitment of talent contributing to skill shortage. The use of social media tools such as Facebook and LinkedIn can offer great opportunities to improve communication with the potential talents to increases attraction. Employer brand image will be a crucial factor here, so as a manager, additional measures will be required to effectively ensure that a positive brand image is portrayed, true to its value, to the potential talents (Aggerholm & Andersen, 2018). Moreover, the manager would need to ensure that the process of interaction with the candidates is smooth and effortless to further increase the attraction value of the manufacturing firm.
As previously discussed, the skill shortage is also influenced by the lack of quality candidates who are graduating from colleges (Kimmell & Martin, 2015). This is associated with the curriculum being promoted to the students who are unable to provide quality education and support to the youth in their employability. Effective collaborations with public institutions such as community colleges and high schools to develop high-quality curriculum and programs aimed at improving the skills of the youth and making them employable for the manufacturing companies.
As a manager, the approach can be built upon. The community colleges and high schools will be approached for collaborations and co-investment opportunities. The collaborations will include working on a more suitable curriculum or workshops which will focus on guiding the young students and supporting the skills development for future employment opportunities. Those students who show potential and a keen interest in the manufacturing-related work will be screened and offered with apprenticeship programs to work in the manufacturing environment (Matt et al., 2020). At the end of the programs, deserving candidates will be offered employment opportunities.
The recruitment and selection process is highly crucial for the identification and hiring for the right and deserving candidate (Abdollahbeigi, Salehi & Jayashree, 2017). Therefore, the manager will focus on streamlining the recruitment process. The recruitment process will be kept straightforward and simple. The potential candidates will be assessed fairly and effectively. The skills required will be evaluated accordingly to determine the match of the skills with effective decision-making skills being implemented by the manager. Moreover, limited time will be spent on the recruitment process to reduce the wait time for the potential candidates. The interview and tests of the candidates will be based on the skills required of the vacancy posted and applied (Paul, 2018).
Another strategy which the manager can use to counter the shortage of skills in manufacturing is through outsourcing. Kolwale and Agha (2015) presented that outsourcing is an effective method for organisations as it enables them to maintain competitiveness while ensuring the effectiveness and efficiency of the business. Moreover, the researchers presented that outsourcing provides a great opportunity to firms which experience and want to overcome the shortage of skills. For this, the manager can approach outsourcing manufacturing firms to continue to ensure that the demands of the customers are being met efficiently although there is a skill shortage in the firm. Outsourcing, although beneficial, can be risky because of the lack of insurance for the quality being produced. Therefore, the manager will have to ensure stringent quality checks and monitory strategies to sustain the good quality of the product while meeting profitable demands.
Mohd-Rahim et al. (2016) have presented that training and education to significant contributors to the performance of the workers in an organisation. Moreover, these factors have also been described as being responsible for influencing a shortage of skills. Lack of high-quality education with effective skills training and development affects the employability of workers resulting in the creation of skill gap and skill shortage. As a manager, ensuring that proper training programs are developed to support the training and development of employees would be another strategy to be considered. Training has multiple benefits for the individual and the organisation as employees feel more motivated and engaged in the workplace which helps to boost their performance and retention in the organisation. This helps to minimise the problem of skill shortage (Paul, 2018). Here as a manager, steps would be taken to develop and implement training programs with help from the human resources department.
Onsite training provided within the operating environment of the manufacturing organisation can also provide the opportunity to improve the training and development of the workers. Research shows that the training given to employees at the workplace helps provide practical and relevant experience to the employees enabling them to stay engaged at work (Detsimas, Coffey, Sadiqui & Li, 2016). The manager will consider different onsite training opportunities such as seminars, workshops, presentations as a part of the training programs. Moreover, technology use can also help to benefit the employees to achieve enhanced learning opportunity while staying up-to-date with the latest skills needed.
Another factor which would be considered by the manager to attack the issue of skill shortage includes compensation and benefits for the employees. The attraction and retention of the employees are highly important for organisations to mitigate skill shortages. Compensation has been mentioned to provide two-way benefits as it not only helps in retaining existing employees but it also aids in attracting new employees (Khalid & Nawab, 2018). The compensation and benefits provided to the workers affect work-related behaviours of engagement and motivation. Therefore, the manager will consider this to reduce the issue of shortage of skills. While working with the stakeholders of the manufacturing firm, effective compensation policy and benefits strategy will be devised to support the attraction and retention of talent in the firm. The compensation and benefits will be lucrative while being competitive in the market environment.
As a manager, it is important to consider all and every aspect in the organisation which could serve to be helpful in decrease skill-shortage because it will continue to influence the profits and productivity in the manufacturing line. Taneva, Arnold and Nicolson (2016) highlighted that the older workers in the organisation can be of great value to the company. This is mainly because of the experience that the older workers hold. The experienced the workers get in an organisation, the more profitable it becomes for the company to retain them. Therefore, the manager will give special consideration to the experienced workers to retain them and support them to continue their services in the organisation. Better strategies will be developed to support the older experienced workers as hiring and training of newer workforce will incur a significant cost which comes along with its uncertainties that can be negated if the older workforce were to be retained. Furthermore, ensuring this important because the experienced workers will know more about the company and can be used to ensure practical onsite training for the development of newer talents in the organisation (Taneva, Arnold & Nicolson, 2016).
The manufacturing industry is experiencing a significant shortage of skilled workers. This paper aimed to build knowledge on the issue of skill shortages affecting manufacturing. It was seen that the issue of skill shortage is associated with influenced equilibrium in the demand and supply of talent. Various organisations, irrespective of the operating industry, face skill shortages which affect their businesses. Various factors were identified which led to the development of skill shortages in the manufacturing companies. One of the factors were associated with lack of competitiveness of firms which influences their growth and ability to influence new and existing talent to stay. Another factor was associated with problems faced while adjusting to new and emerging changes which shift the skill requirements.
Frictions in the form of attitudes of the employees were found to affect employee engagement and response to training leading to poor development. Moreover, increased change in technologies influences skill requirement which affects the market due to a lack of talents to support new skills. Furthermore, hiring and selection of the employees were found to be influenced due to lack of communication and collaboration which leads to lesser hiring and low retention. In addition, low-quality education and training result in unemployable skills and talent which has no use for companies. The resulting skill shortage was found to create a significant impact on the economic growth with each passing year if it is not fixed.
Due to lack of skills in the company, the manufacturing companies are unable to meet consumer demands which affect their competitiveness, growth, production and profitability. The issue was found as being addressed through multiple strategies. One of the strategies which were being considered to mitigate skill shortages included focusing on the implementation of effective HR practices. Successful implementation of positive HR practices like performance appraisal, talent recognition and better compensation helps to promote employee welfare leading to better motivation and employee engagement. Other considerations include the provision of lucrative benefits involving leaves and insurances along with competitive pay. Such practices helped to ensure the employees of their value in the organisation leading to better attraction and retention of talent. Another strategy was identified as focusing on filling the training gap.
Skills training and development of the employees is important and is one of the top considerations to alleviate the skill shortage. Provision of educational and training opportunities to the workers was an initiative which helps to promote the development and increase the competency of the workers. Moreover, investment towards such initiatives was useful to decrease the turnover levels and improve attraction and retention. Other strategies at work in the manufacturing industry to overcome the shortage of skills include collaboration with public sector and educational institutions to promote the learning of young students so that their employability could be enhanced. Moreover, outsourcing is something which manufacturing companies are adopting to maintain customer demand.
Additionally, the use of digital technologies to support employee learning and development along with the focus on retaining experienced workers were found to be helpful in improving the shortage of skills. In the end, the paper discussed different considerations to be made by the manager to resolve the issue of the shortage of skills in manufacturing. Advertising is an appropriate approach to promote the manufacturing firm and attract newer talents in the organisation. Moreover, social media offers high applicability in this regard. In addition, collaborating with the colleges and high-schools could be ensured to develop better learning curriculum which helps make the students employable when graduating.
Additionally, change in the hiring process to ensure the selection of right talent on a fair basis could be done to promote attraction. Moreover, outsourcing manufacturing projects could offer a potential short-time solution to the shortage of skilled workers. Training and educational programs’ development and implementation will support the firms to retain and attract employees. Furthermore, the manager, to improve on the issue of skill shortage, would consider improving the compensation and benefits of the workers to not only attract the new workforce but also to retain the existing employees.
Moreover, experienced workers offer rich learning and experience to the company which can be utilised in the form of training and support to new workers, therefore, their retention would also be given consideration. This way, the manager would be able to mitigate the shortage of skills and continue to achieve sustainable growth and development with continued profits.
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