Facing a Labor Shortage in Manufacturing? Here’s How to Handle It

June 13, 2022

If you’ve been focusing more on recruitment efforts than production, you wouldn’t be alone. For many years now, the manufacturing industry has seen a decline in qualified, available labor, and with COVID-19 causing a major shift in job candidate attitudes and ongoing supply chain disruptions, manufacturers have recently been faced with an even greater labor shortage.

In the United States, job openings in manufacturing have more than doubled their pre-pandemic levels. However, COVID-19 isn’t the only reason behind these vacancies. Here are some of the top causes of the manufacturing labor shortage and how nearshoring to Mexico is the solution your business needs.

What Is Causing the Labor Shortage?

COVID-19 EFFECTS

The labor shortage had been gaining steam for many years, but there are many ways the COVID-19 pandemic has propelled its momentum. In California and Texas, 43% and 46% of pre-pandemic manufacturing job roles were recovered, suggesting that workers may be rethinking what they want from their jobs. Opportunities for remote work, for example, have become one of the most desirable job benefits, and, unfortunately, this is often hard to come by in manufacturing.

THE “GREAT RETIREMENT”

Companies are also feeling the effects of the baby boomer generation leaving their positions and heading into retirement, a problem exacerbated by COVID-19, which pushed many to retire early. Manufacturers are struggling to find younger generations to fill these roles, losing out to more “developed” industries like technology.

INDUSTRY PERCEPTIONS

The manufacturing industry suffered from a bad reputation even before the onset of the pandemic, with many people believing that it involves long hours, low wages, little need for specialized knowledge, and little room for career growth. Manufacturing as a whole is not the “inferior” industry it’s often seen as, yet due in part to those preconceived notions, skills gaps remain a prominent issue, with many companies unable to fill even higher-level, more specialized roles.

Why Is Manufacturing in Mexico the Answer?

The manufacturing labor shortage in the U.S. isn’t likely to end any time soon. In fact, the National Association of Manufacturers estimates that there could be 2.1 million jobs in manufacturing left unfilled by 2030.

As a result, many manufacturers have already set their sights on Mexico. Among the many benefits of manufacturing in Mexico, the country gives manufacturers access to the skilled available labor that is missing in the United States.

LABOR AVAILABILITY

While Mexico’s manufacturing industry isn’t completely exempt from the effects of COVID-19, the country’s workforce availability has remained relatively stable. Manufacturers in the United States struggle to find employees to begin with, and when they do find them, they often need to provide training themselves. In Mexico, on the other hand, manufacturing is a key component of the economy, and both state and federal organizations have invested heavily in education and training programs that create a steady flow of qualified workers into the manufacturing industry.

Manufacturers not only find labor more readily in Mexico but can also lower their labor costs. Mexico’s cost of living is much lower compared to the United States and, in turn, so are the average wages. Businesses are able to find skilled workers, compensate them appropriately, and still save on labor costs.

TECHNOLOGY ADVANCEMENTS

Traditional manufacturing facilities have transformed to include more sophisticated technology, from AI on the factory floor to digital analytics tools. Despite these more advanced, often higher-paying job roles, many individuals just don’t have the desire to fill them. Now, on top of finding entry-level employees, businesses with “smart factories” must also attract employees with the cutting-edge skills needed to support more advanced technology.

Luckily, manufacturing in Mexico has remained at the forefront of innovation as manufacturing and tech continue to converge. Many industry sectors have long been able to put out complex products using sophisticated digital technology, and as a result, have helped develop a workforce with the know-how that businesses need to stay competitive.

SHELTER SERVICES

Despite the impact of the COVID-19 pandemic, Mexico’s manufacturing continues to thrive, with plenty of job openings and potential employees ready to fill them. This means you’ll need a competitive edge if you want to hire the best manufacturing talent for your business. Fortunately, foreign companies have access to the local expertise of shelter services in Mexico, which equip them with the knowledge, tools, and strategy to navigate the labor market and better target top talent.

What’s Next?

Finding the manufacturing skills you need for your business is a challenge on its own, let alone in a foreign country. Luckily, we’re here to help manufacturers through the whole process. From marketing yourself as an employer to overseeing employee development, we ensure you take the right steps to find and retain the manufacturing labor your business needs to succeed.

Contact NAPS today to learn more about all of the ways we can support you in Mexico.

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Sources:

  1. The global labor shortage: How COVID-19 has changed the labor market
  2. Now Hiring? Reasons for the Workforce Shortage in Manufacturing, and What to Do About Them