Recent employment statistics reveal that the U.S. economy has largely returned to pre-pandemic levels, although significant challenges remain. In particular, the manufacturing sector continues to experience problems finding enough highly-skilled workers to fill hundreds of thousands of open positions.
How can manufacturers compete for workers in an increasingly-crowded labor market? A recent study by Harvard Business School has identified a potential solution that manufacturers haven’t yet addressed: so-called “hidden workers.”
Who are these “hidden workers?” Why and where are they hiding? How can manufacturers find them and what, if any, value will they bring to the manufacturing sector in the long term?
These are just a few of the questions we’ll look at in this article, as we examine the manufacturing sector’s hiring crisis, the potential role of “hidden workers,” and how Amatrol can help manufacturers prepare new workers for success in the modern manufacturing workplace.
In 2020, the COVID-19 pandemic changed our world forever. Concerns for health and safety redefined in fundamental ways the very nature of work. The ongoing manufacturing hiring crisis only worsened, as millions of people were left unemployed.
Now a few years down the road, many things have largely returned to normal. In The Manufacturing Institute’s Center for Manufacturing Research’s new monthly publication, Workforce in Focus, authors Chad Moutray and Anjana Radhakrishnan summarize the latest employment numbers, which contain a mix of good news and bad news for the nation’s manufacturers. First, let’s look at the good news.
The authors note that “[t]here were 161 million employed Americans in April, a new record, and 2.28 million more than in February 2020.” according to the Bureau of Labor Statistics’ The Employment Situation—April 2023 report (released May 5, 2023).
In fact, “[t]he unemployment rate edged down from 3.5% in March to 3.4% in April, matching the rate seen in January, which was the lowest since May 1969. As such, the labor market continues to hover at ‘full employment’ levels despite challenges in the macroeconomy.”
Manufacturers will be glad to know that this good news extends to their sector. “Manufacturing employment rose by 11,000 in April…[and] there were 12.9 million manufacturing employees in April, the most since November 2008, with the sector continuing to build on strong gains seen in the previous two years.”
Despite these promising gains in employment numbers, simply getting back to pre-pandemic levels isn’t enough to lift manufacturers out of the hiring crisis they’ve been experiencing since well before the pandemic hit.
For example, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) report for March 2023 (released May 2, 2023), “there were 693,000 manufacturing job openings, the lowest level since April 2021 but still elevated.”
Manufacturers probably think the characterization of nearly 700,000 unfilled job openings in manufacturing as “still elevated” is the understatement of the century. Unfortunately, the current unemployment numbers only highlight how tight the labor market is right now.
Here’s what manufacturers are facing. “The 5.84 million unemployed Americans reported in March translated into 60.9 unemployed workers for every 100 job openings in the U.S. economy. As such, there continued to be significantly more job openings than people actively looking for work.”
In a nutshell, “[m]anufacturers are competing for talent in a very limited labor pool,” which means that manufacturers continue to face “a long-standing and very familiar labor challenge: recruitment.” So what are today’s manufacturers supposed to do?
Finding Hidden Workers
Facing such a tough labor market, what can a manufacturer do to stand out? Manufacturers have been fighting this battle for years now with, at best, mixed results. If only there was a group of potential workers out there in hiding, just waiting to be found. Guess what? Maybe there is!
According to Hidden Workers: Untapped Talent, a study conducted by Harvard Business School and Accenture, “an enormous and growing group of people are unemployed or underemployed, eager to get a job or increase their working hours. However, they remain effectively ‘hidden’ from most businesses that would benefit from hiring them by the very processes those companies use to find talent.”
To be clear, these “hidden workers” are not actually hiding or actively avoiding work. To the contrary, “many such workers want to work and are actively seeking work.” However, “[t]hey experience distress and discouragement when their regular efforts to seek employment consistently fail due to hiring processes that focus on what they don’t have (such as credentials) rather than the value they can bring (such as capabilities).”
The study identifies three broad categories of “hidden workers,” including those:
- “missing hours” (working one or more part-time jobs but willing and able to work full-time);
- “missing from work” (unemployed for a long time but seeking 2 employment);
- or “missing from the workforce” (not working and not seeking employment but willing and able to work under the right circumstances).
As one might expect, “hidden workers” represent a broad range of society and include groups such as “caregivers, veterans, immigrants and refugees, those with physical disabilities…relocating partners and spouses…people with mental health or developmental/neurodiversity challenges, those from less-advantaged populations, people who were previously incarcerated, and those without traditional qualifications.”
What might surprise manufacturers seeking new workers is how many “hidden workers” there are out there. The study estimates that there are “more than 27 million hidden workers” in the United States alone. As the authors of the study note, “[t]he sheer magnitude of this population reveals the potential impact that their substantial re-absorption into the workforce would have.”
To find and hire these “hidden workers,” manufacturers must proactively address the very issues keeping these workers hidden, which include “[a] widening training gap”…”[i]nflexibly configured automated recruiting systems”…[and a] “[f]ailure to recognize and elevate the business case [for hiring hidden workers].”
Training Hidden Workers
According to Moutray and Radhakrishnan, “[r]eforming the approach to talent acquisition and developing a customized approach to hiring hidden workers are great ways that businesses can tap into this labor pool.” As the Harvard Business School study shows, though, manufacturers must also address the “widening training gap” keeping these workers hidden.
As the study notes, “[t]he rapid pace of change in many occupations, driven in large part by advancing technologies, has made it extremely difficult for workers to obtain relevant skills. The evolution in job content has outstripped the capacity of traditional skills providers, such as education systems and other workforce intermediaries, to adapt. The perverse consequence is that developing the capabilities employers seek increasingly requires the candidate to be employed.”
This is why it’s critical for manufacturers to implement training programs that will teach new employees the skills they need to succeed. Fortunately, employers don’t need to recreate the wheel. There are expert consultants available to help assess your situation, take stock of your resources, examine your goals, and recommend a course of action that will create a training program that will be effective at setting new employees up for success.
With more than 30 years of experience designing and manufacturing state-of-the-art training systems, Amatrol remains the world’s leader in skills-based, interactive technical learning for industry. The experts at Amatrol can help you set up your own custom training program focused on the areas where eAssessment reveals new employees need new or better skills.
For example, what if new employees do not possess the knowledge and hands-on skills necessary to successfully operate, maintain, troubleshoot, and repair advanced smart manufacturing technologies? In this situation, an expert at Amatrol might recommend a training program featuring Amatrol’s Smart Manufacturing Learning System (990-SM10), which teaches hands-on Industry 4.0 applications, such as wireless temperature monitoring; web-based condition and power monitoring; and wireless production counting.
New workers using Amatrol’s 990-SM10 will gain invaluable hands-on experience with real-world industrial components workers will encounter on the job, including: BorgConnect Hub, BorgConnect Node, Ethernet switches, Allen-Bradley Programmable Logic Controllers, AC current sensors, load cells/parts counters, and Wi-Fi temperature sensors.
The 990-SM10 is just one example of the many advanced training systems Amatrol manufactures at its facility in Jeffersonville, Indiana. For example, Amatrol offers training systems in a variety of different topical areas, including automation, electrical, electronics, fluid power, HVACR, mechanical, and more!
Consult with an expert at Amatrol today to learn how you can take the first step toward teaching new employees the skills that will set them up for success in the modern workplace.
About Duane Bolin
Duane Bolin is a former curriculum developer and education specialist. He is currently a Marketing Content Developer in the technical training solutions market.