May 31, 2018 Solving the Manufacturing Skills Gap

Catalant CEO shares a solution for the manufacturing talent crisis: prioritizing an agile workforce.

By Rob Biederman, Co-Founder and Co-CEO of Catalant 

As of April 2017, there are about 12.4 million workers in the manufacturing industry, according to the Bureau of Labor Statistics. But for the past several years, manufacturers have been facing a skills crisis, with no sign of abating. Across industries, there’s been a realization that traditional methods of finding talent aren’t working – with 47 percent of companies reporting that it takes more than 90 days to fill critical roles.

Compounding the problem, 70 percent of manufacturing employees reported deficiencies in technology and computer skills, with 69 percent  reporting deficiencies in problem-solving skills, according to Deloitte. But implementing STEM programs in schools is no longer enough – and won’t help today’s existing labor force catch up. As manufacturers explore connected devices and the rise of the internet of things, they’re realizing quickly that top technology talent favors startups and companies like Amazon over more traditional manufacturers. With advanced technologies becoming critical to their competitive strategies, it is critical for manufacturing companies to leverage a different way of working. We believe this can help them fill the skills gap and gain better access to employees with the right aptitudes, at the right time – an agile workforce.

As more manufacturers wade into emerging technology areas like the internet of things (IoT), new types of skills will be required both for the current workforce, and for the type of talent the manufacture will be looking to hire in the future. By leveraging an agile workforce, manufacturers can either re-deploy current employee skills to new types of projects or supplement their workforce with on-demand talent.

Moving to an Agile Workforce

According to Accenture, seventy-nine percent of executives agree that the future workforce will be structured more by projects— work focused on joint goals completed in collaborative teams—than by job function. Staffing those projects will need a mix of internal talent and external talent with skills that can be borrowed for the length of the project rather than owned for some indeterminate amount of time. Those that embrace this future and develop an on-demand mindset in managing their workforce will be positioned to innovate faster and adapt more quickly to changing market conditions – a critical differentiator for manufacturers battling competitors for ever-shrinking profit pools. Moving to an agile workforce shifts the conversation from not having employees with the right skills to taking advantage of the best talent without the constraints of job descriptions, office walls or geographic boundaries. With much of the manufacturing industry shifting from traditional, product-based business models to subscription based, outcome-focused ones, the old way of working will no longer be the most effective way of working. Simply put, finding talent must be about access, not acquisition.

While this type of change may seem daunting, we’re already seeing successful case studies from large manufacturers who have taken the first steps towards an agile workforce.

Change is Already Underway

Manufacturing giants like GE, Emerson and Caterpillar are setting the precedent in an industry riddled with talent issues by leveraging aspects of an agile workforce. As part of their efforts to plug in internal experts across their company, GE wanted to create new opportunities for their entrepreneurs in residence at GE Ventures. While the company already embraced the mindset of bringing new types of thinking from division to division to spread expertise, GE elevated this approach by leveraging a machine learning algorithm to better understand which employees’ skills would be best deployed across internal projects. Introducing new technology within their talent process helped GE better understand what skills their current employee roster had, as opposed to relying on assumptions about who might be a good fit for a certain project. What did this help prove? In some cases, a company might not even realize untapped talent is already within their four walls – an underlying challenge that can be illuminated once the right technology is put in place.

Getting Started

Once your organization is ready to embrace an agile workforce, there are a few immediate areas of focus. First, agents of change must create and build alignment within the C-Suite. As in all change-management processes, embracing the future of work will take leadership buy-in and full, consistent support from your leadership team.

Second, embracing new technology is a critical step for enabling change. While humans are also a requirement for change, leveraging technology can help make the decision process easier for employees by uncovering key attributes (such as underlying skills, or skills required for a certain position) that might not be as obvious for a manager. In fact, McKinsey & Company found enterprises that use digital talent platforms increase their productivity by 9 percent. By enforcing these digital tools, both employees and managers will be better set up for success.

Finally, an agile workforce is not possible without some nudges to your company’s culture. Change won’t be easy, but welcoming this change is the first step to adoption of new behavior. To ensure change takes hold, companies will need to modify some of their thinking around incentives (e.g., how much of an employee’s time should be spent plugging into projects outside of their team?), the training of managers who may be leading not only direct reports but also hybrid teams that includes colleagues from another business unit and freelance consultants—among other changes. The payoff of these changes, though, will likely be significant.

Realizing Change

There are significant benefits to be gained from an agile workforce. These include: access to highly skilled or specialized talent, finding the right talent to get work done faster, increased speed of talent acquisition, and many more. In an MIT study, agile firms grew revenue 37 percent faster and generated 30 percent higher profits than non-agile companies.

Those that embrace an agile workforce and develop an on-demand, project-based mindset will be best positioned to innovate faster and adapt more quickly to changing market conditions, while manufacturers that continue with the status quo will be quickly left behind. The future of work is no longer on the horizon – it’s already here.

About Rob Biederman
Rob Biederman is the co-founder and CEO of Catalant, the leading on-demand work platform that helps enterprises to tackle projects flexibly, quickly and efficiently. Catalant has built a global network of nearly 50,000 independent experts, boutique consulting firms, and custom teams as well as best-in-class software tools for engaging and managing this market. Beyond this network of external business talent, companies leverage Catalant’s technology tools to build and manage other curated pools of talent from alumni to internal teams. Only Catalant offers seamless integration of multiple talent pools, allowing for one-click comparisons across internal and external solutions for the same project. Based in Boston, Catalant serves thousands of clients, including more than 30% of the Fortune 1000, including companies like GE, Shell, and P&G as well as countless others on a confidential basis.

Biederman is also co-author of a book titled, Reimagining Work: Strategies to Disrupt Talent, Lead Change, and Win with a Flexible Workforce, which lays out a vision and path for a new relationship between global companies and talent.

Prior to founding Catalant, Biederman was a private equity investor at Goldman Sachs and Bain Capital, where he focused on the healthcare and high-tech industries. Biederman graduated from Princeton University and Harvard Business School.

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