Struggling to find skilled workers? Three ways tech can help

The US skilled labor market is struggling to balance worker supply and demand. Considering some of the most impacted sectors—manufacturing and construction—can help identify reasons for workforce churn and devise approaches to alleviate it while also boosting productivity.

In our research, the two primary causes of this imbalance in manufacturing and construction, although felt by the market and even other sectors more broadly, are an aging workforce with limited replacements and skyrocketing demand for workers.

Manufacturing and construction, but also other sectors like healthcare and finance, have experienced substantial departures from the workforce with fewer new trainees or graduates to replace them. The ratio of post-working-age individuals to working-age individuals in the US skilled labor market is projected to rise by about 75 percent between 1984 and 2027, according to the Organisation for Economic Co-operation and Development (OECD). Meanwhile, a 2023 Jobber survey found that 79 percent of US-based 18- to 20-year-old respondents said their parents wanted them to pursue a college education after high school, while only 5 percent said the same about vocational school.

These industries are also experiencing high demand for talent as infrastructure projects and real estate redevelopment take off. Between now and 2030, for instance, the global renewables industry will require an additional 1.1 million blue-collar workers for wind and solar plant development and construction and another 1.7 million workers to operate and maintain them.

It’s important to note that company-level strategies are not enough to address systemic pipeline issues, which demand new solutions created in partnership by the private sector, government, and educational institutions. That said, in working with companies in manufacturing and construction operations, we’ve identified three ways technology can be used to help tackle these workforce challenges on an organizational level—which can benefit those in other sectors as well:

  • Leveraging generative AI to help onboard and train new employees.

    Consider an engineering company that used generative AI to support new employees during the onboarding process. Using this technology to help new employees track their tasks and answer questions in real time enabled it to retain scarce skilled workers.

  • Automating tasks to free employee time to focus on greater value-add work.

    For example, a heavy equipment manufacturer uses “cobots”—collaborative robots—alongside human workers to automate repetitive tasks and free up employees for more complex and analytical work. This has enhanced productivity by 40 percent and improved resource utilization by 50 percent.

  • Adopting technology to enable remote work and flexibility.

    One electronics manufacturer has used digital twins and remote-control technologies to enable technicians to operate and debug factory equipment from anywhere in the world. The resulting increased flexibility has reduced vacancies by 25 percent and nearly doubled productivity.

Productivity is a critical consideration, as McKinsey Global Institute research has noted that countries’ productivity growth is slowing or, for some, has failed to take off at all.

Productivity growth in advanced economies, a classification that includes the US, has slowed by about one percentage point since the global financial crisis around 2008. Emerging economies fell from 5.9 percent in 2007 to 3.4 percent in 2022. And at their current pace of improvement, “slow-lane” emerging economies would never catch up to advanced-economy levels.

The technology use cases outlined above align with many of the company-level strategies that organizations can take to help boost productivity in their respective countries and enhance residents’ standard of living.

For more research into the U.S. skilled labor market, read our article, “Tradespeople wanted: The need for critical trade skills in the US.” In addition, the recommendations shared here do not obviate the need for a healthy culture and operational excellence at the company level, which is critical to attract and retain talent. Learn more about establishing operational excellence here.

Learn more about our People & Organizational Performance Practice