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The Workforce Challenge: Three Priorities for Manufacturing

We often hear that one of the biggest challenges to the future of American manufacturing is the worker shortage. The industry has consistently had more than 800,000 open positions nationwide, and a recent Manufacturers Alliance quarterly CEO survey found that talent recruitment and retention rank among the top three concerns for U.S. manufacturing leaders.

For the first time in modern history, five generations of people are working together. This represents a unique moment in time giving companies the opportunity for a massive competency and knowledge exchange.

The reality is that older, experienced professionals are retiring in droves while a new generation of workers is just starting to trickle in. Yet I would say there is still more to our workforce challenge than getting the available worker pool to fill fast enough. The question I’m asking is: How do we not only attract and retain talent but create a manufacturing culture that fully leverages advanced technologies?   

Siemens is the leading global provider of both factory automation and industrial software. These are core technologies needed in this moment of transformation for American manufacturing. Why? Because these technologies address the real need right now—which is enabling the current-sized workforce to be even more productive and innovative.   

Yes, we must prioritize attracting talent to open positions. At the same time, we must also acknowledge that the workforce math simply isn’t in our favor. We face a tight overall labor market in which there are nearly two open jobs nationally for every available worker. In the aftermath of the “Great Resignation”—the steady increase in voluntary departure from work that started before the pandemic—we’re seeing a 2% contraction of the labor force from pre-Covid levels. Last year alone, 47 million people in the U.S. resigned or retired.

This leads to another critical priority: addressing knowledge gaps driven by a big crew change. We now have a mass exit of Baby Boomer workers who have extensive institutional and technical knowledge, making Millennials the majority of the workforce. Manufacturers will need to compete for any inbound talent, look to attract people from other industries, and embrace diversity, equity, and inclusion as a business imperative. Meanwhile, this incoming workforce, while perhaps more likely to be digital natives eager to use cutting-edge tools, still needs to acquire the knowledge specific to a product or process before they can make gains through new technologies. 

Here are three key priorities for tackling this workforce challenge.

Maximize and harness the value of multigenerational teams

For the first time in modern history, five generations of people are working together (people in their 80s who are still working alongside Gen X, Millennials, and Gen Z). This represents a unique moment in time giving companies the opportunity for a massive competency and knowledge exchange. Domain specific knowledge that has been earned over decades in an industry is one part of that exchange. But even more importantly, the digital-first mentality of younger generations makes embracing the manufacturing digital transformation a natural next step.

Siemens employees with decades of experience have moved into factory teams with digital natives then reported to managers how the experience inspired them to advance their own digital skills. Multigeneration collaboration is a recipe for new, better ways of using technology to increase productivity, efficiency, and speed to market. 

In light of this, I’m less concerned about generational shifts and much more interested in how we empower people with technology at every stage of their careers and how we facilitate knowledge sharing from design through production. 

Recognize the importance of a growth mindset 

The people joining manufacturing will not be interested in working with systems designed 30 years ago. Digital natives joining manufacturing will be looking forward to using artificial intelligence, simulation, and robotics—high-tech tools to do things faster and more efficiently. To keep them engaged, companies must prioritize learning and upskilling as a cultural imperative. They must be willing to invest in their people and their operations.

That’s why U.S. manufacturing must develop a provocative growth mindset to be able to disrupt outdated approaches and move much faster. Such a mindset asks why things were done a certain way for so long and then seeks a better approach. The growth mindset embraces cutting-edge technology and helps workers to become innovators. 

A growth mindset also helps overcome resistance to change, especially with aged equipment. The need to attract talent should be seen as a call to action to modernize and phase out legacy assets.

Enable the workforce to unite and blend IT and OT

To make the high-end goods needed in many markets now, manufacturers must operate on the cutting edge. Too often, the setup of manufacturing companies works against achieving state-of-the-art production. We see very strong CIO organizations (IT) and very strong manufacturing organizations (OT) within the same company working at cross purposes. 

Thus, one of the key priorities for catalyzing creativity and innovation within the workforce has to be fully merging IT and OT in manufacturing, creating digital continuity from design to production. 

As manufacturers, we need to take tech-savvy people coming out of colleges and high schools—gamers and coders; people who understand simulation, modeling, and virtualization—and condition them in their roles by providing maximum digital engagement. All along the manufacturing process, we should be giving them the accessibility to technology and instruction that builds upon the talent and intellect they already have, and providing the right channels of communication across the value chain so that IT and OT are collaborating. Workforce sharing and communicating across the chain, while integrating new digital technologies, will bring down these walls that separate IT and OT.

So, while our recruitment and retention concerns will continue to rank highly in the minds of leadership, U.S. manufacturers have the means to manage these workforce challenges and ignite transformation. The key is embracing the power of multigenerational collaboration. It’s about being open to change, not resisting it. And it’s about creating a culture with technology that not only allows innovation to flourish, but that inspires a new manufacturing workforce—one of all ages and backgrounds—to apply their talents in American industry.


Raj Batra

Raj Batra

President of Siemens Digital Industries, USA

Raj Batra is the President of Siemens Digital Industries USA. Raj serves as the Chair of Manufacturers Alliance’s Executive Committee and Board of Trustees. He is also the immediate past Chairman of the Board of Governors for the National Electrical Manufacturers Association (NEMA)

Many thanks to Raj for sharing his insights.

Opinions expressed by contributing authors are their own.