Revolving door: Retirement boom already shifting job roles in current manufacturing models

To ensure the healthy future of the manufacturing industry, it’s critical to know which employees possess the knowledge to train the future generation of manufacturing workers. Employee assessments mitigate risk by allowing employers to accurately determine employees’ ability, job mentality, and confidence levels.

By Mary J. Clarke, Cognisco November 24, 2008

The manufacturing industry has long been a cornerstone of the American economy. According to a study conducted by The Industrial College of the Armed Forces , it is the fourth-largest contributor to the country’s economic growth, accounting for 22 percent of the gross domestic product growth at the time of the study.

Manufacturing also has a direct impact on the health of other industries on both sides of the supply chain. It creates huge demand for raw materials provided by companies ranging from lumber mills to steel refineries to plastic plants; and its products affect industries spanning the spectrum of health to high-tech to retail and beyond. The viability of the manufacturing industry affects not only those working in the field, but the health of the economy as a whole.

As baby-boomers begin to retire, the manufacturing industry is faced with the fact that its knowledge base is about to walk out the door. According to Nielsen Research data, manufacturing executives should expect approximately 40 percent of their skilled workforces to retire within the next five years. For manufacturing companies with annual revenues ranging from $10 million to $1 billion, it will mean an average loss of $52 million per company, with losses for larger companies reaching closer to $100 million.

Large manufacturing companies aren’t the only ones that will be affected by this trend. The National Association of Manufacturers says approximately 20 percent of small to medium-size manufacturing companies—with 2,000 workers or fewer—reported that retaining or training employees is their No. 1 concern.

So what can manufacturers do to ensure their security in these unsure times? One step is gaining a clear picture of who in the workforce is best suited to pass on knowledge before leaving the industry for good.

It is vital that manufacturing executives make every effort to pass along critical knowledge now, before the masses of skilled baby boomers make their exit. Employee-assessment programs represent an invaluable tool for determining who can best help pass on this knowledge, and identify the right people in the industry to assume more responsibility and fill the shoes of the retirees.

Not everyone is prepared to train the future of the manufacturing workforce. While most seasoned manufacturing employees will possess extensive industry knowledge, not all of them will have the ability and the confidence to pass this knowledge on in an effective manner.

And just because someone has an understanding of a subject matter doesn’t mean they will be able to teach it. Customized employee assessments can determine who is best suited to train newcomers because they measure competence and knowledge in conjunction with confidence. Assessing confidence along with knowledge is a key aspect of a successful employee assessment program because this approach provides executives with a more complete picture of their workforce.

In addition to the effects that the aging workforce will have on industry newcomers, it’s likely that the upcoming retirement boom will create a shift in the job roles of many current manufacturing workers. As thousands of seasoned workers leave the industry there will more vacancies in high-level positions. This likely means workers currently holding lower-level positions will be receiving promotions and moving up the ranks.

Employee-assessment systems can be helpful in this situation to determine who is most capable of taking on more responsibility. It could be a potentially costly mistake to promote someone who doesn’t possess adequate knowledge, confidence, and competence to succeed at a higher-level job. Employee assessments mitigate risk, allowing employers to accurately assess both employees’ ability and their confidence in that ability.

The impending retirement boom is not a problem that will go away. Ensuring the proper knowledge hand-over is one of the most important steps manufacturing executives can take to preserve the health of their companies, the industry, and the economy as a whole.

Related links:
MBT : A skilled yet aging workforce sees wages squeezed by globalization
USA Today : Small manufacturers desperately seek skilled staff

About the author: Mary J. Clarke, chief executive of employee assessment solutions specialist Cognisco , has extensive sales & marketing experience in the technology industry, in both software & services organizations.allowing employers to accurately assess both employees’ ability and their confidence in that ability