Exploring Upskilling in the Manufacturing Industry

By - October 22, 2021

This is the introductory post in a series covering one large and important topic: the upskilling and reskilling of workers in today’s manufacturing landscape.

The series will kick off with laying out the current manufacturing landscape, and make the case why upskilling initiatives should be at the top of the list for individuals and manufacturing companies. We’ll consider the potential outcomes of each reskilling effort, and consider the short term costs to these pursuits.

In future posts, we will explore this theme from an individual view (how individuals in the workforce currently approach and might consider upskilling) an organizational view (how organizations can look at the future of upskilling their workers) the market view (the current view of the market, and who are the major players are), and venture to speculate on some potential paths forward, based on current data.

Manufacturing workforce: the current landscape

Though we will address issues relevant to the post COVID-19 world, it is important to note that even before COVID-19, the rise of automation and similar trends were calling for large-scale upskilling and reskilling efforts across multiple industries.

There are fewer workers on the shop-floor. This was true before the pandemic, due to the skills gap which has been widely reported for years. This has been further highlighted by the pandemic and social distancing. Below are some statistics from the World Economic Forum’s Future of Jobs Report.

  • Manufacturing employment is 433,000 below its February 2020 level.
  • 50% of all employees will need reskilling by 2025, as adoption of technology increases
  • Increasing automation is affecting multiple industries, but especially manufacturing.

Even with investments in automation continuing as a trend for virtually all manufacturers, and as the technology improves, skilled workers will continue to be a scarce resource. There are two million manufacturing jobs which could be unfilled by 2025 due to a scarcity of skilled workers.

The case for upskilling

Savings in overall labor costs due to less employee turnover

  • Hiring from the outside is more difficult and costly than retaining and building from within
  • The cost of reskilling is approximately $24,800 per person in the United States
  • It costs 6x as much to reskill from the outside vs from within

Upskilling can keep top talent by providing upward career mobility

According to a 2018 report, the composition of current skills needed in manufacturing is about 48% “manual and physical. By 2030, roles requiring higher cognitive and social/emotional skills are expected to increase upwards of 10%, due to the automation of the physical tasks. Employers will look for overlapping skills from applicants, and instead of relying on external hires, will increasingly invest in L&D internally. 

Cons of Upskilling

The upfront costs of investments in learning platforms, time, and teaching on the job are significant. One study by the World Economic Forum looked at the upskilling trend on a macro scale, with GDP effect. The projections indicate that the first years will feel the impact of the investment.

In the next article of this series, we’ll take a closer look at the reskilling pathways from the individual point of view. What are the hurdles that workers face when embarking on their upskilling and reskilling projects?



Upskilling for Shared Prosperity: Insight Report: World Economic Forum

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