MT Magazine November/December 2024

The Economics of Automation With skilled workers in short supply, fewer young people interested in on-site work, boomers retiring, and demand remaining elevated, manufacturers could invest in automation for multiple returns. According to recent research from consulting firm McKinsey & Co., not only is it tough to find talent for manufacturing jobs, but it is becoming even more expensive – which may validate what you’ve probably been experiencing. And it isn’t going to get any better. The consultancy reports that when it comes to skilled workers in manufacturing, “from 2022 to 2032, annual hiring is expected to be more than 20 times the projected annual increase in net new jobs.” Older workers are rapidly retiring from the workforce, and, according to McKinsey’s research, that issue is compounded because Generation Z (those born between 1997 and 2012) and many millennials (1981-1996) “prioritize workplace flexibility,” noting that “the on-site and highly structured nature of … manufacturing jobs typically doesn’t map to these preferences.” Or, said another way: People can’t work from home when it comes to manufacturing jobs. McKinsey found that, overall, acquiring and training skilled workers is going to cost companies in the United States some serious money – to the order of $5.3 billion a year. BY GARY S. VASILASH CONTRIBUTING EDITOR