The U.S. manufacturing industry is experiencing a paradox: labor shortages in skilled roles while layoffs in other sectors create a labor surplus. Across industries, the recent layoffs of federal workers and cuts in government spending are expected to increase the available workforce, particularly in administrative, IT, and support roles.
How can organizations adjust their hiring strategies to capitalize on available talent while still addressing skill gaps? Kaizen is here to help!
Understanding the Workforce Imbalance
Many sectors, especially those relying on technically skilled labor, face shortages today. A 2024 Deloitte and the Manufacturing Institute report found that manufacturing alone could need as many as 3.8 million new workers by 2033. Yet, half of those roles could go unfilled if current issues persist. Those challenges include:
- An enormous jump in demand for specialized, technical roles (for instance, Deloitte/MI found a 75% increase in demand for simulation and simulation software skills).
- High demand for growing roles such as CNC machinists, robotics specialists, maintenance technicians, and engineers.
- As more individuals opt for workforce-focused certifications versus traditional degrees, educational gaps leave potential knowledge on the table.
- The retirement of experienced workers without an adequate pipeline of trained replacements.
- The need for specialized training in automation, AI, and robotics.
- Increased demands for benefits—Deloitte/MI reported that competitive benefits programs are the most impactful recruiting/retention strategy, with 77% of respondents answering positively. Other key tools include flexible work (47%), upskilling (38%), and personalized career growth (36%).
At the same time as these labor shortages, layoffs may create opportunities. The layoff of thousands of federal employees, particularly in administrative, compliance, and support roles, is expected to develop a workforce surplus. This could mean an influx of professionals with transferable skills, such as logistics, procurement, cybersecurity, and finance.
Transferable skills like these are definitely in high demand. The World Economic Forum’s top 10 skills for the future of work include “soft” or transferable skills like analytical thinking, resilience, leadership, and creative thinking. Today’s hiring organizations must better understand how to effectively transition these now-available workers into key open roles.
Strategic Solutions: Balancing Labor Supply and Demand
In manufacturing, HR, finance, or other key roles, a few strategic shifts can help your team take advantage of new talent pools and seamlessly integrate them into your organization – even if they’re not a 100% fit on paper. Here are six strategies we recommend:
- Repositioning Roles to Attract Displaced Workers: Adjust your job descriptions, even slightly, to highlight transferable skills and catch the interest of displaced employees looking for a “stretch” job. You might also consider offering bridge programs to train professionals moving from government and corporate sectors into manufacturing.
- Creating Fast-Track Training Programs: Expand apprenticeship and upskilling programs for high-demand roles. Where possible, AI-driven training and virtual reality simulations, along with more traditional online learning modules, can help accelerate learning. Upskilling can also have a long-term benefit: employees who say their employer encourage them to learn new skills are 47% less likely to be looking for another job, according to Gallup.
- Investing in Automation to Offset Persistent Skilled Labor Gaps: Where skilled workers remain scarce, robotics and AI can fill gaps while upskilling existing employees. Look for ways to balance automation with job creation, even with “co-bot” (collaborative robotics) solutions.
- Recruiting Support Roles from the Surplus Talent Pool: Many laid-off federal workers (and downstream displaced workers from contractors and related places) will likely be strong candidates for procurement, HR, supply chain management, and compliance roles.
- Bridging the Gap Between Available Workers and Industry Needs: Many workers may not consider roles outside their existing backgrounds. To address this, incentives should be created for displaced workers to move into manufacturing and related niches through reskilling programs and signing bonuses.
- Partner with Experienced Recruiters: When you work with specialized, experienced recruiters like Kaizen HR, you get all the benefits of our network and expertise. We understand how to translate your specific requirements into a successful recruiting strategy, and we can help you identify promising talent even outside of “obvious” on-paper skills.
The current economic landscape presents both a challenge and an opportunity for manufacturers. While specialized skilled labor does remain in short supply, the influx of displaced workers from federal layoffs and other industries is opening up a new talent pool. Organizations that proactively adapt their hiring strategies, training initiatives, and automation investments will be best positioned to thrive in this environment.
If you’re looking for ways to tap into expanding talent pools, upskill your team, or build a pipeline for the future, Kaizen HR can help! Contact us to learn more about our turnkey recruiting solutions and how we can address your team’s particular needs.
By Rose Dorta
Are you a high-performing leader or believe you have the potential to tackle a more challenging role? Would you be interested in career opportunities that are seeking these attributes?
I’d love to chat with you and answer any questions that you have. Email me, Rose Dorta, Managing Director of Kaizen HR Solutions, here.
