Manufacturing is critical to the United States and the Midwest. It’s responsible for creating jobs, supporting businesses, and generating economic growth. Manufacturing is also a key driver of innovation, helping to create new products and technologies that can improve our lives.
Nationwide, manufacturing was the fourth-largest employment sector in 2021, with more than 12 million employees. In the Midwest, it’s the largest employment sector. But like many other industries, manufacturers are facing a major challenge – a shortage of skilled workers.
Even if every skilled worker in the country was employed in manufacturing, Forbes reports there would still be 35 percent more job openings than workers capable of filling them. By 2030, Deloitte predicts the industry will be short by more than 2 million workers.
The issue has been further exacerbated by the pandemic when manufacturers faced an even smaller talent pool and soaring labor costs.
Why There’s a Labor Shortage in Manufacturing
There are several reasons for the current labor shortage in manufacturing.
Baby Boomers Reaching Retirement Age
Although Baby Boomers no longer represent the largest generation in the labor force, Pew Research Center says there are still more than 40 million of them in the workforce, accounting for about 25 percent of workers. Within the next 10 years, Deloitte says 2.6 million of them are expected to retire from manufacturing roles.
Younger Workers Seeking Different Careers
Younger workers have favored four-year degrees and white-collar positions in technology, healthcare, finance, and other industries they believe offer better working conditions and salaries.
Misperceptions About Manufacturing Careers
One common misconception is that manufacturing jobs are low paying and require little skills or education. However, this is not the case. In fact, many manufacturing jobs are quite high-paying and require specialized skills and training.
Another misconception is that manufacturing jobs are dangerous. While it’s true that there are some risks associated with working in manufacturing, these risks can be mitigated with proper safety precautions.
Finally, some people believe that manufacturing jobs are not as stable as other types of jobs. However, this is also not the case. Many manufacturing jobs are quite stable and provide good benefits and job security.
How Automation Can Solve the Labor Shortage Problem
As manufacturers plan for the future, it’s clear they will be facing workforce shortages for at least another decade. Automation is key in solving this problem now, and here’s why.
Reduce Recruitment Costs and Improves Retention
Robots also reduce recruitment costs and labor rates, which often range from $15/hour to $60,000/year or more for a single employee. Depending on labor rates, a high-volume system can generally pay itself back in one to two years. Plus, by taking on laborious tasks, robots can improve retention, saving costs associated with employee turnover and training.
Frees Workers for More Complex Tasks
Robotic systems can handle repetitive tasks traditionally done by human workers, freeing them from more complex tasks.
This includes:
- Material handling
- Palletizing and depalletizing
- Machine and laser tending
- Assembly and welding
- High-speed pick and place
- And much more
Increases Production While Reducing Costs and Improving Safety
Industrial robots can work 24/7/365 without needing to take a break. If lines allow for it, they can work without downtime, keeping up with seasonal peaks and increased consumer expectations.
This allows manufacturers to increase production while reducing labor and operating costs. Because robots can handle thousands of pounds, they also may help manufacturers reduce injuries from lifting and repetitive motion injuries.
Manufacturers nationwide reported 846,700 injuries in 2019, according to OSHA. This figure represents 15 percent of all nonfatal injuries in the private industry sector.
Improves Efficiency and Quality
Robotic programming increases quality and repeatability while reducing waste and damage to products. There isn’t any jarring, shifting or shaking, because products are handled consistently every time. This helps reduce waste and the chances of human error.
Robotic vision systems can count and track items, spot defects, and sort products, eliminating the need for human workers. They can also support packing, palletizing, and loading cargo, helping save on labor, time, and money.
Loans and Grants to Offset Robotic Systems Integration
Robotic systems integration is an investment because it can significantly increase productivity and efficiency while reducing labor costs. In many cases, industrial robots may even be able to pay for themselves over time.
Small- and mid-size manufacturers can take advantage of loan and state-specific programs to offset costs related to working with a robot integrator.
Nationwide Loan Programs for Manufacturers
The US Small Business Administration offers lending and investment products to help small manufacturers obtain more than $5 billion in capital to get started and grow:
- The CDC/504 Loan Program provides long-term, fixed-rate financing of up to $5 million to help manufacturers automate, upgrade or acquire major fixed assets such as equipment and facilities that promote business growth and job creation.
- 7(a) loans provide manufacturers with vital working capital to purchase equipment, make and implement process improvement plans, acquire inventory and hire employees.
Grants for Iowa Manufacturers
The Iowa Manufacturing 4.0 Technology Investment Program provides grants for small- and mid-sized manufacturers to offset the costs of industrial robots. Qualifying manufacturers can apply for up to $50,000 through Manufacturing Innovation Equipment Grants.
To qualify, manufacturers must:
- Be incorporated or authorized to do business in Iowa
- Employ a minimum of three and fewer than 75 full-time employees across all locations
- Designate with NAICS codes falling between 31-33 (used in the Manufacturing 4.0 report)
- Derive a minimum of 51 percent of their revenue from the sale of manufactured goods
- Have been operating for at least three years
While Iowa State University’s Center for Industrial Research and Science (CIRAS) doesn’t offer grants, they’re a great asset for connecting small and medium-sized Iowa manufacturers with resources via the Manufacturing Extension Partnership to help them thrive and grow.
Grants for Illinois Manufacturers
The Illinois Manufacturing Innovation Voucher awards up to $25,000 in matching funding for manufacturers to accelerate technology adaption like robotics. Voucher projects must be conducted in Illinois for existing manufacturers with up to 500 employees.
Grants for Minnesota Manufacturers
The Minnesota Department of Employment and Economic Development offers an Automation Training Incentive Program, which helps small businesses train existing workers on new automation technology.
Grants of up to $35,000 are available to small businesses in the manufacturing or skilled production industry.
To qualify, manufacturers must:
- Be located outside the seven-county metropolitan area, or in Cannon Falls, Hanover, Rockford, Northfield or New Prague.
- Be providing training for existing full-time jobs that pay at least 120 percent of the federal poverty guidelines.
