Let’s face it – it’s hard to find skilled workers and manufacturers can’t keep up with growing customer demands. The U.S. Manufacturing Index stood at 62.1 in June 2021, just below the previous month’s all-time high, meaning the industry continues to grow. Human Resources teams across the U.S. are struggling to fill positions because the COVID-19 pandemic dramatically changed the way we do business and the way people want to work. The right contract manufacturing partner can help manufacturers fill the labor gap while providing a few other added benefits.
What’s Driving Recruitment Woes?
- The unemployment rate is falling again. The U.S. Bureau of Labor Statistics reported a 9% unemployment rate for May 2021, which is a significant improvement since its pandemic-induced peak at 14.8% in April 2020. Before COVID-19 the U.S. unemployment rate was at 3.5%, its lowest point in more than 50 years. The people who can work and want to work are already employed.
- There are more jobs posted than there are people of working age to fill them. The number of job openings in the U.S. hit a new record high of 9.286 million in April 2021(see chart below). To put that into perspective, from 2017 to 2019 the number of job openings went from less than 6 million to about 7.5 million; and we thought we had a labor shortage then!
- People learned what it was like to work from home during the COVID-19 pandemic and some decided to stay home for good. They get to spend less time commuting and less money on gas, workwear, and childcare. This leaves more time for family and, likely, more disposable income.
Contract Manufacturing to The Rescue
If you need to increase production capacity quickly, the solution is contract manufacturing. A great contract manufacturing partner will already have a skilled workforce, production capacity, and established quality processes in place. By outsourcing some work, you can redeploy your workforce on the main production line to increase overall throughput.
Besides the relief you’ll feel on the production line, outsourcing should also help your purchasing team reduce their workload as component procurement for the work you outsource will become your CM partner’s responsibility. Some contract manufacturing partners, like MCL, will also offer engineering and design help to ensure your design is highly manufacturable, which can help reduce costs. Partnering with a contract manufacturer can also help you avoid needing to invest in more production space as the manufacturing sector continues to grow.
You can learn more about contract manufacturing and whether or not it could help your organization by reading our Beginner’s Guide to Contract Manufacturing. Click the button below to access your copy today.
