Manufacturing Talent Outlook

2025 Manufacturing Talent Outlook

Weakening demand for manufactured goods and a loosening labor market have brought manufacturing labor supply and demand into better balance, at least in the near term. However, talent challenges remain salient.

The Employment Cost Index for manufacturing's total compensation (wages and benefits) rose 3.8% year-over-year as of September 2024. This increase comes as the manufacturing sector faces significant talent shortages. A 2024 study by Deloitte and The Manufacturing Institute projects that 1.9 million manufacturing jobs could remain unfilled over the next decade due to unaddressed talent challenges. Contributing factors include a lack of access to childcare, reliable transportation, and workers' desire for greater flexibility.

Source: Deloitte

The manufacturing sector underperforms in employing women, Black workers, & younger generations

Underperforming with Women

Woman are 41% less likely to work in the manufacturing sector compared to women working across all industries, on average

Diversity is STILL Needed

The manufacturing sector is on par for attracting Hispanics/Latinos & more likely to employ White & Asian individuals, Black/African Americans and Multi-Racial/Other individuals are less likely to work in the industry

Skewing Older, #1 Age Group

Gen Z & Millennials are least likely to work in manufacturing roles vs. other age groups.
Adults age 55+ are the most likely age group in manufacturing, followed by adults ages 45-54

How to Meet Worker Expectations

A recent report by Gartner suggests that by 2025 over 80% of large businesses that have hourly employees will have invested in advanced workforce management software solutions.

To meet evolving worker expectations, reduce turnover, and manage demand fluctuations, companies are increasingly prioritizing an improved worker experience. This involves adopting an ecosystem approach to talent development and utilizing digital tools for advanced talent planning and workforce management. Persistent challenges include workers' access to child care, reliable transportation, and their desire for flexibility.

Improving the Worker Experience

Investments extend beyond operational efficiency, focusing on significantly improving the worker experience. This includes understanding employee sentiment, optimizing shift patterns, enabling flexible scheduling, and refining company communication for hourly workers.

By 2030, AI will be pivotal in managing employee skills and deployment. These advanced tools will analyze skills, certifications, staffing needs, and demand forecasts to optimize workforce planning, allowing proactive measures to address skill gaps through upskilling or strategic talent acquisition.

Targeted Upskilling

To secure skilled workforces beyond 2025, manufacturers should invest in targeted upskilling (like generative AI collaboration) and skills-based hiring via advanced talent planning.

Source: Gartner