Manufacture This

The blog of the Alliance for American Manufacturing

It’s on employers to do more to find and retain in-demand workers.

The latest jobs numbers were unveiled on Friday, and the news for manufacturing was pretty good. About 36,000 new jobs were created in June, according to the Labor Department — and roughly 285,000 factory jobs have been added over the past year.

(Notably, the fabricated metals industry saw 7,000 new jobs in June. This suggests that fears about the steel tariffs, now in their fourth month, might have been a tad overblown. But we digress.)

Anyway, the overall economy saw 213,000 new jobs last month, another consistent month of growth. With the economy nearing full employment, fears are rising that the “U.S. labor shortage is reaching a critical point.”

“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse,” Moody’s Analytics economist Mark Zandi told CNBC. “These labor shortages will only intensify across all industries and company sizes.”

Luckily for businesses, another CNBC story published this week on this exact issue might just contain one solution to this problem.

A CNBC Global CFO Council survey found that 84 percent of companies say they have had trouble in the past year filling skilled positions. Perhaps not surprisingly, the No. 1 thing corporations care about when selecting new worksites is finding workers with the right set of skills. They also consider local infrastructure and the cost of doing business in a new location.

But those same companies also do not prioritize the quality of life for those valuable skilled workers, including things like education and cost of living, which rank at the bottom of their list.

So basically, these companies want to find people who have the exact skill set they need, in a location that is perfect for them, but do not take into account how their decisions will impact the very people they need to run their business. Companies then wonder why they can’t find skilled people to work for them.

And there’s another big issue floating around that’s also likely to be playing a role.

Pressure is mounting on companies to be more proactive in recruiting workers, including by raising wages, which have been relatively stagnant. As CNBC reports:

“Economists expect that employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives.”

Although the “skills gap” is now being discussed across the larger economy, it’s been talked about in manufacturing circles for years. Here at AAM, we’ve always argued that while there is a legitimate need to institute public policy to properly train and recruit people to help fill advanced manufacturing jobs, companies themselves also must step up and play an active role.

Efforts such as apprenticeship and workforce development programs are critical, of course. But employers also must treat the people whose skill sets they desperately need with respect. That includes things like paying a fair wage and taking into account the overall quality of life of their staff.