The labour shortage crisis – causes and solutions for manufacturers

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The absence of skilled workers has been looming over European manufacturers for years. In 2019, three out of four European companies reported that they had trouble finding the right workers, Romanian projections not looking any more brighter for the future workforce many manufacturers still depend on. With no improvement in sight, decision makers and companies must collectively care for the workforce, as people are the economy’s most important resource.

With over 2.7 million working-age people in Romania expected to exit the workforce by 2050, and 91 million in the whole Europe, according to UN Word Population Prospects, the effects of labour shortage are already being noticed across the continent. In less than 10 years, by 2030, Europe will have already lost 13.5 million workers.

What are the main causes of labour shortage?

As the baby boomer generation retires, the general European population is aging and retires earlier than before while fewer young people are entering the labour market. According to a Eurofund study, the largest shortages are reported in the manufacturing and construction and services sectors in Eastern Europe, where 39% of companies in manufacturing and 42% of companies in construction point to labour shortages as a factor limiting production. Th same source shows that 3 out of 4 European companies had difficulty recruiting suitable workers in 2019.

What should the response to labour shortage be

Industry players and decision makers are trying to figure out what the response to a changing demographic should be. The first option are vocational schools and universities that ensure flexible education and training services need to be. Improved technical conditions can prepare students and trainees and steer them towards jobs in manufacturing that align the needs of a company with their learned skills.

What can manufactures do

What strategies can companies pursue to fill the current gaps they have in their production lines? If countries cannot attract enough skilled workers, the answer must be to retain the existing workforce. More than ever, companies must evaluate their policies and workplace culture in order to increase their attractiveness as employers. Additionally, companies must be aware that salary is no longer the determining factor for many younger workers. Instead, they are increasingly interested in engaging tasks, flexible working hours and improving their work-life balance.

The context of a trend of rapid digital acceleration pushed by the COVID-19 pandemic social and economic context, manufacturers also need to invest consistently and courageously in the development and expansion of new technologies. Most manufacturers are adjusting their business in new ways to achieve growth as products need to get to market faster and more cost effectively than ever. And the digitalization of manufacturing processes favours automation. Even partial automation can cushion the effects of demographic change, increase efficiency and reliability for companies while allowing manufactures to continue to produce at full capacity.

Urgent labour gaps can be filled by collaborative automation, as cobots can be delivered within a matter of weeks and change their position and role in production as gaps in the manufacturing floor occur. Automating hard, repetitive, monotonous and possibly dangerous processes allows companies to upskill existing employees towards more valuable, fulfilling work while increasing attractiveness as an employer.

The lack of skilled labour is a complicated challenge that we need to overcome. It touches upon every aspect of society, and as such must be addressed from every angle, policymakers as well as industry players. With decisive action, we can adapt our industry and nurture our workforce to defy the shortage of skilled workers.

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