Profitable Manufacturers Focus on Talent Management

Oct. 5, 2009
New study says U.S. manufacturers must differentiate themselves through innovation and a highly skilled workforce

In order to maintain profitability and stay competitive in the future, manufacturers need to embrace new and progressive talent strategies, according to a new study released by Deloitte, The Manufacturing Institute and Oracle.

The study shows that surveyed manufacturers, especially the most profitable, rank employing a top-notch workforce high on their priority list. Many companies assigned a higher importance to implementing people management practices compared to increasing customer service orientation.

However, the study also found that many companies still rely on traditional approaches and old tactics when managing and developing their employees, and it furthered revealed that progressive tactics have failed to gain traction.

"In the face of a global recession and intense international competition, American manufacturers must differentiate themselves through innovation and a highly skilled workforce," said Emily DeRocco, president of The Manufacturing Institute. "Companies need to invest more in employee training and make workforce skills a top strategic priority. Our education system must also do a better job aligning education and training to the needs of employers and job-seekers. To support this effort, The Manufacturing Institute recently launched the NAM-endorsed Manufacturing Skills Certification System to provide a solution to our nations talent development needs and help manufacturers compete successfully in the global marketplace."

Even during the current economic downturn, nearly one-third of companies report a moderate to serious shortage of skilled workers, and most foresee increased shortages ahead. This may seem counter-intuitive, but it suggests that many companies that have experienced layoffs may be simultaneously recruiting for specific types of employees, with specific skills and capabilities, in specific locations.

"The challenges that lie ahead have the potential to cripple manufacturing as we know it if we dont face these issues head on and take proactive steps to prepare and engage workers for the future." said Richard Kleinert, principal, Deloitte Consulting LLP.

Regional talent shortage disparities also emerged from the findings. In the Midwest, 26% of manufacturers surveyed reported moderate to serious talent shortages. However, in the Southwest, 50% of companies reported such shortages.

Despite dramatic changes in the economy since the release of NAM's 2005 Skills Gap Report -- "A Survey of the American Manufacturing Workforce," the top three overall drivers of future business success over the next two to three years remain the same:

  1. New production innovation: 65% in 2009 vs. 49% in 2005
  2. High-skilled, flexible workforce: 50% in 2009 vs. 75% in 2005
  3. Low-cost producer status: 43% in 2009 vs. 45% in 2005

To view the study visit:

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