Rethinking the Future of Work in Manufacturing: Navigating the Skills Gap and Embracing M4.0

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The manufacturing industry is in a period of massive change. On the one hand, the labor shortage and skills gap persist (and are expected to worsen by 2030 if jobs remain unfilled ). But on the other hand, there is incredible momentum behind M4.0 – the revolution of manufacturing characterized by AI, robotics and advanced technology integrations.

Though the current workforce shortage continues to levy challenges on manufacturers, digital transformation can help them become more resilient, efficient and profitable. That means rethinking the future of manufacturing work. And it’ll be incumbent upon industry leaders and manufacturing HR professionals to help pave the way for change.?

In this article, we’ll explore the shifting landscape of work in the manufacturing industry, critical considerations for the future of the industry’s workforce and how companies should be thinking about adapting to the new manufacturing epoch.

The Changing Landscape of Work in the Manufacturing Industry

You may have heard about the Fourth Industrial Revolution, called Industry 4.0 or M4.0 in manufacturing. Yet, while we’ve lived in this transformative period for over a decade, many industries, including manufacturing, have been slow to adopt new technologies. That changed, though, in 2020 with the COVID-19 pandemic.

The Impact of COVID-19

Manufactured goods and machines, especially for healthcare, were in demand more than ever in recent history. Factory workers were essential to these critical goods' rapid and timely production. As a result, the industry stepped up by accelerating production lines and creating new products while increasing the adoption of manufacturing 4.0 technologies. In a 2021 survey of manufacturing leaders by the Manufacturing Leadership Council, nearly 55% of respondents said COVID-19 increased management’s focus on digital transformation .

Digital Natives in the Workplace

The accelerated momentum for digital transformation across the industry also comes at a time when there is a changing of the guard. More baby boomers retire with each passing year, and with them go invaluable skills and experience unless they’re tapped to train the new generations of workers. Millennials now make up the majority of today’s workforce, and Gen Z is not far behind.?

The manufacturing industry’s evolution requires new and different skills, and these younger cohorts, for the most part, grew up as digital natives. They’re primed to help lead the way and figure out solutions and integrations between humans and technology to improve the work that’s done on factory floors.?

AI’s Growing Impact

Artificial intelligence (AI) is at the helm of digital transformation in the manufacturing industry. But before we unpack how, let’s briefly review what AI is: a field of computer science that focuses on creating machines and systems that can analyze, learn and perform tasks done by humans, tasks that usually require some form of human intelligence.?

The Manufacturing Institute’s Vice President of Workforce Solutions, Gardner Carrick, recently had this to say about how AI is changing the way manufacturers do business – “The history of technology adoption is about improving the job quality of individuals on the shop floor. AI helps them to do the job better, provides them with better tools, gives them greater authority and ultimately increases the value-add of their jobs. All of that is a net positive for those individuals.”

Carrick also shared an optimistic vision of AI and humans coming together, “Over the last 12 years, we’ve seen a lot of technology adoption, but we have not seen a lot of job loss. In fact, we’ve seen job gains. There is a lot of opportunity to reimagine jobs to add value that AI will help to illuminate.”

Ultimately, the role of AI isn’t to take over and eliminate manufacturing jobs en masse. (Though the days of humans continuing to do monotonous, repetitive tasks are dwindling). Instead, the intent is for AI to enhance the work that skilled laborers do on factory floors, improve operational efficiency and lower costs.

Leaders Know The Future is Digital

Despite economic uncertainty, companies’ digital transformation plans are chugging ahead. The Manufacturing Leadership Council’s recent Smart Factories and Digital Production survey supports this with a key finding –

88% of respondents said that the future state of factory models will be a hybrid of humans and machines , incorporating elements such as robotics, digital production systems and digital processes.?

Regarding AI specifically, nearly 36% of respondents expect to use the technology within the next two years. The most favored applications of AI are in production optimization, equipment maintenance and service, and distribution, logistics and inventory management. However, 38% of manufacturers noted that their lack of skilled employees significantly impedes the implementation of M4.0 plans.?

So, how can manufacturing leaders develop an adaptive workforce to successfully carry out digital transformation across the industry over the coming years? Let’s talk about it.?

The Future of the Manufacturing Workforce

Several key factors make this an exciting and pivotal time for manufacturing leaders. There exists an opportunity to figure out how to implement digital transformation amid challenging labor market conditions. Companies that do so successfully will be uniquely positioned for growth.

Preparing New Generations to Take the Reins

First, there is the aging workforce to consider. People who’ve likely invested decades into their manufacturing careers and are moving on to the next stage of their lives. With them goes invaluable skills and experience. Companies should consider upskilling and reskilling their more novice workers by having them train with those who have a greater depth of knowledge.?

Another way to more fully develop the newer generations of workers is to create upskilling programs specifically around digital transformation technologies, like AI. Training existing employees can accelerate the integration process at your company and help it go smoother.

Adapting With New Skills

At The Manufacturing Institute’s inaugural Workforce Summit in late 2022, adaptive skills were a primary topic of conversation . These skills can help solve the industry’s current skills gap because they allow workers to learn and expand their capabilities to meet dynamic job functions or business markets. For manufacturing, three highly-relevant adaptive skills are root-cause analysis, systems thinking and creative reasoning.?

EY Americas Business Consulting Leader Lisa Caldwell had this to say about adaptive skills, “If we build career paths and we define the skills and the capabilities that are needed for those career paths, focusing on adaptive skills as much as the technical skills, I think we have something that could really attract people to want to not only come but stay in manufacturing.”

Squashing Stale Perceptions

Caldwell raises a great point about attracting and retaining new talent in manufacturing. Unfortunately, there exists a perception (though it’s lessened in recent years) that a job in manufacturing is just that – a job. And a stigma associated with the perception that only less-skilled, non-degree-holding workers would take jobs in manufacturing. But that could not be further from the truth. Manufacturing workers are highly-skilled professionals, from welders to engineers and beyond, and lucrative and sustainable career paths exist in the industry.?

It’s incumbent upon manufacturing companies to help shift outdated and damaging perceptions to attract talent that will carry the industry through this new epoch. And HR leaders can play a vital role in assisting companies in accomplishing this.

Preparing for the Future of Work in the Manufacturing Industry

The future of manufacturing work will look quite different from how it does today. There will be new roles that don’t yet exist, synergies in daily routines between workers and AI and factory employees with advanced technological education and skill sets.?

To digitally transform their organizations, companies must embrace new technologies and hire or develop talent that understands how to use it.?

Rethinking Recruitment

Finding the right talent starts with a company’s recruiters and HR team. They are the frontline professionals sourcing, communicating with and extending offers to candidates to backfill roles and hire for brand-new requisitions. While there, of course, exists a need for recruiters to focus on the current and immediate demands of the business, HR leaders should be thinking about how their workforce planning and recruitment strategies could be adjusted for future hiring priorities.?

A consideration at the forefront of this is how companies can develop a compelling “employer brand” and communicate their value propositions to attract top talent. While it most certainly requires direction from internal marketing teams, manufacturing recruiters themselves would benefit from putting on their marketing caps, so to speak, when communicating with prospective hires. Competition has always been fierce for top-notch talent. Still, recruiters who can clearly and convincingly explain to candidates why they should join their company and (for students or recent graduates) launch their careers in manufacturing will always win out.?

Further, recruiters will need to adjust their strategy to source and attract more digital specialists in the years to come . This is the talent that, present-day, is attracted to technology giants like Google and Microsoft or trail-blazing startups. Digital specialists on teams and factory floors will be requisite to manufacturing companies’ advancement in M4.0.

This brings us back to AI. It doesn't just have a place on factory floors – it has become an incredibly beneficial technology for manufacturing recruitment. There are several options for recruitment software on the market today that automate the steps of recruiting and hiring processes to varying degrees.?

Of course, we're biased, but FactoryFix is known as the leading recruitment automation solution for manufacturing companies. We help companies spend less on recruiting, save time on tedious tasks and source the skilled talent they need through our network of over 650k pros across the U.S. For a limited time, we're offering a free trial of our platform. Click here to access the offer .?

Upskilling and Retention

On the other side of recruitment is retention. Once you hire exceptional talent for your company, what comes next? The answer, put simply, is to do everything you can to keep your valued employees happy and fulfilled.?

Within the context of the Fourth Industrial Revolution, this means ensuring your existing workers are being upskilled or retrained to support the new technologies and processes that will be present on your factory floor. From creating dedicated training programs in-house or hiring external experts to educate your workers to encouraging and paying for educational advancement at local colleges and universities, there are many ways manufacturers can support their employees and demonstrate how they’re invested in them building their careers within the company.?

Aside from training and professional development, other important factors go into retention. Following the COVID-19 pandemic, workers across all industries started to advocate for greater work-life balance, flexibility and employer support. As a result, manufacturers have been stepping up their offerings in important ways, like providing free childcare benefits to workers .?

In a recent Manufacturing Institute (MI) study, 49% of women cited the lack of childcare support as a top challenge. Women make up only 29% of the manufacturing workforce, and there is a huge opportunity for companies to step up their benefits to attract more women to the industry. MI notes that all of the industry’s current job vacancies (~746k) could be filled if the share of women grew by just 6%.

Final Thoughts

The manufacturing industry is in a challenging yet exciting period of change characterized by a labor shortage and skills gap and the accelerated adoption of Industry 4.0 technologies.?

Digital transformation of the industry will continue, with AI playing a central role in enhancing and augmenting the work done on factory floors. The future of the manufacturing workforce will likely be a hybrid of humans and machines. Still, companies must plan for this future so that current conditions don’t impede digital transformation, like a lack of skilled employees and digital specialists.?

Manufacturing industry leaders and HR professionals have a crucial role in paving the way for change and developing an adaptive workforce for the future.