Availability of skilled workers is a growing challenge for manufacturers

Prime Advantage, a consortium for midsized manufacturers, announced the findings of its fourth annual Group CFO Survey, revealing financial projections and top concerns of its member companies’ CFOs in 2012.

CFOs continue to see solid signs of the economic recovery in U.S. manufacturing. While member companies are planning more hiring, wage increases, and capital expenditures, the availability of skilled workers is a growing challenge.

Here is a summary of of the findings
• Sixty-nine percent of executives are more optimistic about their companies’ financial prospects in 2012 (compared to 67 percent in 2011)
• While more CFOs are optimistic about their own financial prospects, fewer respondents are more optimistic about the U.S. economy than in 2011, with 67 percent feeling better about 2012 than the prior year (compared to 74 percent in 2011)
• Fifty-nine percent of manufacturers expect moderate to high growth from their key customers in 2012
• Nearly 95 percent of CFOs plan to invest in manufacturing equipment and 63 percent in computer hardware this year
• CFOs report that customers are less affected by tight credit, with 24 percent of respondents in 2012 stating customers are not affected by the cost or availability of credit (compared to 14 percent in 2011)
• Health insurance premiums increased for most respondents, but at a lesser rate, with only 33 percent indicating an increase of more than 11 percent (down from 48 percent measured in 2010)
• Top priorities in 2012 include cutting operational costs, developing new products and services, and long-term strategic planning (which rose 13 points from 2011).

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Fifty-seven percent of respondents have unfilled positions (more than double last year’s result of 23 percent). The inability to find skilled workers locally is the main reason for this problem (as reported by 65 percent of respondents with open positions). Competition for talent and labor force immobility were cited as other top causes.

As a short-term solution, companies have recognized that they cannot rely on the market to provide skilled workers and they are investing in retraining existing employees and providing training for existing employees. As a long-term solution, respondents emphasized promoting manufacturing as a strong career choice in local educational institutions. Respondents are also going to junior college or vocational schools and co-developing welding or electronic programs to help deliver skilled workers to the local marketplace.