Finding solutions to close the manufacturing skills gap through science, technology, engineering, and mathematics.
The skilled labor shortage is nothing new. Depending on who you ask, this problem goes back several years or several decades, and it’s getting worse all the time. In 2006 and 2007, many marveled when the unemployment rate dipped below 5%. As of November 2019, it had not exceeded 4% in the previous 20 months.
At the FABTECH® 2019 expo, which ran Nov. 11-14, many fabricators indicated that they had just about given up on finding skilled workers to fill technical positions. It’s not just a problem for those in manufacturing—this problem is endemic, affecting nearly every industry throughout the U.S. economy.
So what is a metal fabricator to do?
The Long Play: STEM Education
Part of the problem is that too few people leave college with degrees in science, technology, engineering, or mathematics (STEM). Our universities and technical schools are just not producing enough technically trained students to fill the void, with an estimated shortfall of 2 million unfilled manufacturing jobs by 2025.
By comparison, in 2011 there were 600,000 unfilled skilled positions in the manufacturing industry. Between 2015 and 2025, it is predicted that retirements will create 2.7 million job vacancies in manufacturing, and 700,000 positions will be created as the economy expands. This means that manufacturing will need 3.4 million additional workers. About 1.4 million people will enter the industry, leaving a shortfall of 2 million workers.
While reforming education is obviously a nationwide issue that needs more than a quick fix, there are things that individual businesses can do, collectively, to improve and grow the skilled talent pool in the future.
Many companies are funding STEM initiatives in their communities through after-school programs, STEM scholarships, and STEM school sponsorships. At a more immediate and practical level, manufacturing companies have started apprenticeship programs, taking unskilled employees that are loyal to the business and training them for roles in skilled positions as well as providing for their education.
Immediate Help: Embracing Automation
While supporting STEM education may pay dividends down the line, it will probably provide little support for manufacturers struggling for talent now. A more immediate solution would be for manufacturers to invest further in automation.
The cost of automated hardware systems, including sensors, continues to drop, while their efficiency and capability keep improving. Furthermore, the software required to run these machines is easier to use than ever. Manufacturers can buy robots, automated equipment, collaborative robots (cobots), or hire a systems integrator to build custom automation systems to alleviate the need for hiring technical talent.
Of course, increasing automation can include peripheral costs. For example, buying a robot or cobot for loading or unloading a machine is one thing, but setting up a robot for drilling holes, polishing parts, or welding joints likely means investing in a workcell, including a rotating table or shuttle table system to bring parts to the robot.
R&D Tax Credit
Hiring staff and investing in automated systems requires funding. The federal government has already anticipated this issue and has provided assistance in the tax code to allow small-business owners to receive a significant credit for making such investments.
The R&D Tax Credit is a stand-out incentive that rewards manufacturers for designing and developing new parts and components, automating operations, integrating systems, implementing and coding robots, testing prototype systems, and exploring new or improved applications for metal alloys.
The incentive can be claimed up and down the supply chain, and manufacturers can use the tax savings to invest in new staff or increase automation in their facilities. So whichever option a company decides, whether investing in STEM or embracing automation, the R&D Tax Credit can provide the funds to do both.
Written by: Greg Knarr, Director at Alliantgroup lp, for The Tube and Pipe Journal.