By Katie Sanders

Manufacturers have spent the past three years racing to close a hiring gap that keeps getting wider. By 2033, U.S. manufacturers will need to fill as many as 3.8 million jobs. At today's hiring pace, 1.9 million could go unfilled, according to a 2024 study from Deloitte and The Manufacturing Institute.

Every conversation about that number tends to go the same way: more recruiters, more apprenticeships, more automation to make do with fewer hands.

That conversation skips the leak in the bucket. A new hire costs a plant time and money to train, and if that worker walks in 18 months, the hiring math never gets a chance to pay off. Retention, not recruiting, is where many manufacturers are actually losing the labor war. It's also the piece of the skills gap getting the least attention, from machining shops to chemical plants to food and beverage lines.

The size of the problem shows up clearly in Deloitte's 2025 Smart Manufacturing Survey. Asked to name their top human-capital concern, 35% of the 600 manufacturing executives surveyed pointed to preparing workers for the "Factory of the Future," ranking it above culture and safety issues.

Manufacturers know the workforce they have today isn't the workforce a modern plant needs. Many aren't confident they can hold onto people while making that shift happen.

Training Alone Isn't Closing the Gap

Manufacturers have responded to that pressure by investing in AI training. More than half (55.2%) now provide some form of it to frontline workers, according to the National Association of Manufacturers' Q2 2026 outlook survey. That's a meaningful jump for an industry that treated AI mostly as a back-office concern a few years ago, and it shows real money moving toward closing the skills gap.

Training a worker on a new tool and giving that worker a reason to stay are two different problems, though, and most manufacturers are solving only the first one.

A crew member who learns to run a new sensor dashboard or scheduling tool still leaves if nobody notices the catch they made last Tuesday, or if the only time a supervisor talks to them is when something breaks. Skills wear out fast on a plant floor when recognition doesn't travel with them.

The research points to where the next round of investment should go. Manufacturing workers who can see a clear path to new skills are 2.7 times less likely to quit than workers without one, according to the 2024 Deloitte and Manufacturing Institute study.

A skills pathway works less like a training checklist and more like a signal to the crew that the company is investing in them personally, beyond just the equipment they run.

What Engagement Actually Buys a Plant

Connected workforce software maker Redzone tracked this question directly. Its 2026 Frontline Workforce Engagement Study followed 150 plants through a 90-day rollout of an AI-powered platform built to give frontline teams real-time visibility into their own performance.

Every plant in the study saw engagement scores rise. Average engagement climbed 81%, and turnover fell 35% across the group. One food and beverage manufacturer in the study cut overtime to zero, grew output 33%, added $2.6 million in sales, and cut maintenance closeout time by over 87%.

Those numbers point to a lever most retention strategies aren’t hitting: real-time recognition. A machine operator who spots a bad batch before it ships, or a tech who fixes a jam before it eats a shift, usually hears from a manager only when something's already gone wrong.

That silence adds up faster than people think. After a few months of catching problems nobody mentions, workers stop believing anyone's paying attention. Once that belief sets in, it doesn't take a huge offer from somewhere else to pull them out the door.

Plants that route that information across every shift turn individual catches into shared root-cause fixes and updated SOPs, so the whole line runs the same, optimized way no matter who's on the floor. That consistency is where connected-worker tools earn their keep on manufacturing floors right now, and it shows up on the P&L faster than a recognition program alone does. The outcome is fewer repeat root causes, and a scrap rate that holds steady across every shift instead of drifting on nights and weekends.

It's a smaller fix than a new hiring pipeline, and it's one plants can put in place immediately rather than over the next several budget cycles.

Where Manufacturers Go From Here

None of this argues against hiring or automation. The math on 3.8 million open jobs is legitimate, and AI tools that catch problems earlier are making a measurable difference on plant floors across the country.

But a strategy built only around finding new workers and training them on tools that don't share data across shifts will keep losing the same share of workforce it's spending money to build in the first place.

The manufacturers pulling ahead on the labor shortage are treating retention as its own line item, not a side effect of good hiring. That means measuring engagement the way plants already measure OEE or scrap rate — and giving frontline teams a concrete reason to stay.

See how one 150-plant rollout did it, including the full engagement and turnover results, in Redzone's 2026 Frontline Workforce Engagement Study.

Sources

•      Deloitte & The Manufacturing Institute, Taking Charge: Manufacturers Support Growth With Active Workforce Strategies (April 2024) — 3.8M jobs needed by 2033, 1.9M could go unfilled, 2.7x retention lift with a skills pathway. themanufacturinginstitute.org 

•      Deloitte, 2025 Smart Manufacturing Survey (600 executives, surveyed Aug.–Sept. 2024) — 35% named Factory of the Future worker-skills readiness their top human-capital concern, ahead of culture and safety issues. deloitte.com

•      National Association of Manufacturers, Q2 2026 Manufacturers' Outlook Survey (215 respondents, surveyed May 12–28, 2026) — 55.2% of manufacturers provide AI training to frontline workers. nam.org PDF

•      Redzone, 2026 Frontline Workforce Engagement Study — 150 plants, 90-day deployment, 81% engagement increase, 35% turnover reduction, F&B manufacturer case (zero overtime, +33% output, +$2.6M sales). rzsoftware.com

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