Companies Expect Shortfall to Cost an Average of $52 Million;
$100 Million for Largest Manufacturers
PEORIA, Ill. (June 10, 2008) – A new survey shows that the baby boomer retirement coupled with a lost generation of factory workers have combined to create a perfect storm, aggravating a costly skilled labor shortage for manufacturers in the US.
The need to replace these lost skilled workers has grown from a concern to a wholesale crisis in just three short years, according to 100 senior manufacturing executives who were surveyed. They say the shortfall will cost their companies an average $52 million, and even more, $100 million, for the nation's largest companies who report more than $1 billion in annual revenue.
The benchmark survey was commissioned by Advanced Technology Services, Inc. (ATS) and conducted by Nielsen Research. The survey polled 100 senior manufacturing executives representing companies with revenue between $10 million and $1 billion: Forecasts indicate that during the next five years, approximately 40% of your skilled labor force will retire. What do you anticipate the retirement of 40% of your skilled labor force will cost your company in these five years?
Eighty-one percent of respondents said they would be affected by the shortage, versus 68 percent three years ago, demonstrating this issue has become of even broader concern to manufacturing executives. Further, they calculate the looming retirement of skilled workers without an adequate replacement pool will cost them an average $52.2 million from their bottom lines, compared with an average $50 million when asked in 2005. And the cost is worse for companies with more than $1 billion in annual revenue, where 44 percent say the shortage will cost them more than $100 million.
"As manufacturing becomes more sophisticated, technical and precise, and as an entire generation of experts retires, we are recruiting the cream of the crop to do more than fill the gap, but to give manufacturers an edge," said Jeffrey Owens, President of ATS. "Those skills are particularly critical in maintaining plant assets and for keeping the factories running better, particularly during an economic downturn."
ATS has published a white paper, Workforce Trends: Tools for taking control of today's skilled labor shortage, that provides guidance on what companies can do to stem the tide of the shortfall. Workforce Trends illustrates the benefits - immediate and long-term - to be found in taking proactive steps to recruit, train, and promote a multi-skilled labor force. It enumerates the steps ATS takes to satisfy two significant needs facing U.S. industry: providing the hard-to-come-by talent to work in factories; and making factories more productive in-house, so that manufacturers won't look elsewhere for less expensive production alternatives. Visit www.advancedtech.com/workforce to obtain a copy.
ATS customers who have benefited from significantly increased factory productivity, skilled labor fulfillment and improved competitiveness include Caterpillar, Eaton, Honeywell, Fortune Brands and others.
About ATS:
ATS makes factories run better. Advanced Technology Services, Inc. (ATS) improves productivity and profitability for many of the world's most respected manufacturers through the managed services of production equipment maintenance, information technology and spare parts repair. Founded in 1985, ATS employs over 2,200 people across the US and is a member of the National Association of Manufacturers. ATS is headquartered in Peoria, IL with offices and services centers located in Greenville, SC, Chicago, IL, Detroit, MI, Monterrey, Mexico and the United Kingdom. For more information, visit the ATS Web site at www.AdvancedTech.com.
