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Leadership Challenges Facing U.S. Manufacturers

As baby boomers retire, they’re leaving a leadership vacuum at companies across the country. Manufacturing companies are at a particular disadvantage as they try to work on leadership development, and finding skilled candidates is a problem, says Jennifer McNelly, president of the Manufacturing Institute, the nonprofit affiliate of the National Association of Manufacturers.

The institute’s goal is to ensure the U.S. is a leader in manufacturing education and talent development, McNelly says. And the stakes are high: Companies that lack the middle management leadership necessary to fill the senior leadership roles baby boomers are vacating or that have yet to prepare younger employees to take over middle management roles face a leadership gap that will only become harder to address.

Retirements Are Fueling a Manufacturing Talent Crunch

U.S. manufacturers are finding it hard to recruit the skilled talent they need as large numbers of older employees retire at the same time as they’re trying to expand their operations. It’s a problem we see firsthand as the Success Labs team works with manufacturers in Louisiana and surrounding states.

“Manufacturers today face challenges when it comes to leadership development because of the growing skills gap in the industry,” McNelly says. “According to our recent Skills Gap report with Deloitte, 84 percent of executives agree there is a talent shortage in U.S. manufacturing.”

And other challenges complicate matters:

  • It can take more than 90 days to recruit highly skilled workers, McNelly says. Because filling those positions is so difficult, manufacturers may put off recruiting the skilled workers they need, making the talent and staffing gap even worse.
  • Manufacturing companies need to be developing leaders at every level, McNelly says. In the changing manufacturing environment, companies depend on leadership from the frontline to the c-suite. In the team-oriented environment of manufacturing, leadership is paramount.
  • Manufacturers tend to focus on product more than internal development, says Phil La Duke, who has a background in manufacturing consulting and is now a safety thought leader at sustainability consultancy ERM. “The priority is on production. If it’s nonproductive, it can be seen as waste.”

Change is Happening — Slowly

Fortunately, some manufacturers have begun to address the issue. Companies of all sizes — from smaller ones, such as GenMet and Click Bond, to large corporations, such as Alcoa and Ingersoll Rand — are engaging their communities and in their companies to develop leaders, McNelly says. And we’ve seen the same progressive mindset in Success Labs’s manufacturing clients, including Albemarle, Axiall and Methanex.

Companies like these are working to change the perception of manufacturing careers and building quality partnerships to develop talent. In addition, they’re working to engage and develop their current employees. “An engaged workforce is smart business,” McNelly says.

Building a culture of leadership is part of GE’s success, says Jen Stefanik, global program manager for the company’s operations management leadership program. “It’s something GE is known for. It’s part of the culture. When you come into the company and they say, ‘We’re going to send you to a leadership course,’ it’s such an honor. It’s not just for the elite. It helps ingrain and demonstrate its importance.”

The U.S. manufacturing industry will not remain globally competitive if it doesn’t develop leaders, McNelly says. “Manufacturing competes on talent, and talent drives innovation. We must build the next generation of leaders operating in a global economy to remain competitive.”

Want to learn more about manufacturing leadership development? Read our guide:

CTA Leadership Development for Manufacturing Companies

Success Labs is a leadership development and management consulting firm in Baton Rouge, Louisiana. For more than 25 years, our expert team of consultants has worked with hundreds of companies to explore their business potential and improve their company and cultural performance. Contact us to get proactive about your people strategy.

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