As the US economy recovers from the pandemic, demand for commodities is surging. However, there is a major issue: American factories are unable to employ enough workers to complete the job. Despite the fact that industrial production in the United States reached a 37-year peak in March, the industry also has over half a million job vacancies. Factories are having difficulty filling advanced positions such as welders and machinists. Manufacturers are also having difficulty filling non-skilled entry-level slots.

The talent crisis isn't recent, but it's getting worse, with far-reaching implications outside the automotive industry. According to a report released Tuesday by Deloitte and The Manufacturing Institute, as many as 2.1 million manufacturing workers will be unfilled by 2030. According to the survey, the labor shortage would affect sales and productivity, and it could cost the US economy up to $1 trillion by 2030. "It is profoundly worrying that the number of vacant entry-level manufacturing vacancies continues to rise at a time when jobs are in such high demand nationally," Paul Wellener, vice chairman and US consumer goods and constructions head at Deloitte, said in a statement.

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Resounding distress signal

According to the survey, manufacturers believe it is 36 percent harder to find talent now than it was in 2018, despite the fact that the unemployment rate is much higher. More than three-quarters of industrial executives surveyed (77%) believe they would have difficulty hiring and sustaining jobs this year and in the future. A resounding distress signal kept repeating itself during the executive interviews undertaken for this year's study that they couldn’t find the people to do the job. In North America, for example, demand for HVAC systems is high as companies restart and people update their homes. Carrier, on the other hand, is having trouble finding staff to help it satisfy the need by developing new structures. Finally, the labor shortage could serve as a brake on the industry's and the economy's expansion.

The robots are not taking over

Part of the issue, according to manufacturing executives, is that many young Americans just do not want to work in factories, partly due to concerns of machines taking over and jobs being sent abroad. "We have an issue with interpretation. People are unaware that the positions are available or that they are the jobs they want "The Manufacturing Institute's executive director, Carolyn Lee, told CNN Business. The National Association of Manufacturers, a prominent business trade body, has partnered with the institute on workforce growth.

Despite an explosion of 2.7 million industrial robots in operation worldwide, according to the Deloitte survey, humans are still needed to manufacture the overwhelming amount of products. The robots aren't going to take over the world, "Lee said. "A robot will pick up and carry a package, but a human can be imaginative and anticipate what will happen next. However, several robotics companies are looking to take advantage of the labor shortage. Path Robotics, a company headquartered in Columbus, Ohio, claims to have created the world's first fully autonomous robotic welding device. On Monday, the company reported a $56 million round of investment to help it expand.

Competition From Amazon 

About the fact that millions of Americans are now out of jobs as a result of the pandemic, the Deloitte report claims that "many factories can't fill" entry-level manufacturing associate vacancies that don't need specialized knowledge and pay well over the federal minimum wage of $7.25 an hour. 

According to the paper, such jobs, which include assemblers, assembly job helpers, and hand-held tool cutters, only include a "simple degree of 'human skills' such as following orders, ability to learn, and follow-through." People laid off from the hotel or restaurant industries, as well as high school graduates, may theoretically fill them. Part of the problem is that producers are competing with factory and fulfillment centers for entry-level expertise, which are fueling the e-commerce revolution led by companies including Amazon (AMZN) and Chewy (CHWY). The growth in warehousing positions, according to Wellener of Deloitte, is exacerbating the problems for manufacturers, despite the fact that such jobs may provide fewer long-term opportunities.

Diversification

However, the labor shortage is not solely due to the Amazon influence. Manufacturers are also having difficulty filling middle-skill positions that require certain basic or applied skills. Computer numerical control machinists, welders, and repair technicians are only a few of the occupations that require experience, licenses, or certification. Around the same moment, according to the Deloitte report, one of every four women is contemplating quitting the automotive sector, a circumstance that may exacerbate the industry's diversity problems. Despite the fact that women make up almost half of the population in the United States, only about a third of manufacturing professionals are female, according to the survey.

The study offers many suggestions for how manufacturers can improve their workforce attraction activities, including initiating recruiting efforts in high schools, considering flexible scheduling to assist with work/life balance, and connecting leadership success to diversity, fairness, and inclusion metrics. Manufacturers must proactively reach out to more diverse communities, according to Lee, in order to restore their talent pool. "Traditionally, manufacturing has been older, whiter, and more male," said Lee, who comes from a family of manufacturers. "It would be mathematically difficult for us to succeed in the future until we have a more diverse population."