Manufacturing Talent Outlook

2025 Manufacturing Talent Outlook

Weakening demand for manufactured goods and labor market loosening seems to have created a better balance, at least in the near term, between labor supply and demand in manufacturing.talent challenges are still salient.

The Employment Cost Index for total compensation in manufacturing, which includes employee wages and benefits, has continued to climb in 2024, gaining 3.8% year over year as of September.
A study conducted by Deloitte and The Manufacturing Institute in 2024 showed that 1.9 million manufacturing jobs could go unfilled over the next 10 years if talent challenges are not addressed.
Challenges such as workers’ access to child care, reliable transportation, and their desire for flexibility also remain.

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 help meet workers’ changing expectations, reduce turnover, and plan for demand volatility, companies seem to be increasingly focusing on improving the worker experience

taking an ecosystem approach to talent development
leveraging digital tools that offer advanced talent planning
workforce management capabilities

Improving the Worker Experience

In addition to supporting broader digital initiatives to improve operational efficiency, a key goal of these investments is to improve the worker experience, including capturing employee sentiment, suggesting adjustments to shift patterns, enabling flexible scheduling, and improving company communication with hourly workers, according to the report.

By 2030, AI will be key to managing employee skills and deployment. These tools will analyze skills, certifications, staffing needs, and demand forecasts to optimize workforce planning. This allows companies to address skill gaps through upskilling or external talent acquisition.

Targeted Upskilling

Targeted upskilling prepares employees for future work, like collaborating with generative AI. Advanced talent planning supports skills-based hiring, broadening the talent pool. These investments and long-term talent strategies will help manufacturers build and retain skilled workforces beyond 2025.