The ageing manufacturing workforce and Industry 4.0

Also known as experienced workers, people over 55 years old in the manufacturing workforce comprise 25% of it. And all of them are soon closing their career cycle. With the rise of Industry 4.0, manufacturing is struggling with drastic worker shortages and a widening skill gap.

The retirement of older workers and the slow hiring of younger generations, who see manufacturing as an unattractive option, is worrying companies globally. Facing a workforce crisis, manufacturers are finding out that the retention of older workers is not only a necessity but an asset.

HR professionals in manufacturing indicated older workers’ experience, work ethic, and professionalism, as valuable assets for the company. Strategists are finding methods to engage older workers for the time being, while recruiting younger ones.

The ageing manufacturing workforce and the “brain drain” effect

With older workers leaving, manufacturing firms are concerned they will lose some technical knowledge. Psychology calls it “brain drain”, and almost every manufacturing firm fears it. The shortage of labour for them will cause long-term consequences if not tackled now.

Almost 90% of companies surveyed from The Manufacturing Institute reported capitalizing on the talents and experiences of their older workers.

Furthermore, 46% of them report benefiting from older workers to a great extent. Executives are building honest communication channels with their workers, informing them about the expected changes due to Industry 4.0.

Companies are implementing strategies to solve this issue, such as “retain, retrain, recruit”. Here are the tactics:

Conduct a skills audit

Industry 4.0 workforce requires digital knowledge at all levels. First, companies should review the skills of their existing staff and compare those to what the company needs. This audit will determine the skills gap that the company is facing and what measures to take. Learning & Development pros want data to identify the most in-demand skills of the future.

Upskilling and reskilling

To help strengthen the skills that employees already have, companies are launching upskilling and reskilling programs.

Upskilling means learning new skills within the same job function, while reskilling means learning skills for a different job function. This method has proven a big incentive for older workers to engage and deliver in their jobs. Managers are starting to understand development extended across the whole life course. This pattern is known as lifespan psychology and is helping organizations attach the older workforce to technological advancements.

Mentorship and Apprenticeship programs

Manufacturers are implementing on-the-job training programs and internal technical training programs. Employers are embracing the idea of lifelong learning, where they receive continuous opportunities for training and development.

While many employers are still planning to buy in the skills they require, many are planning to invest in training for existing workers.

In fact, 71% of employers asked believe this is a more sustainable approach to addressing skill shortages. Nearly 38% of senior business leaders say that older workers do not currently have the skills required.

Statistics show that 37% of organizations in the UK are looking to retrain older workers. The observations also show that training makes workers feel more valued by their workplace, leading to higher job satisfaction.

Maximizing productivity

Most of the manufacturing companies are positive in keeping experienced workers. That’s why they are maximizing workers’ productivity until new talent comes across. Another method is investing in automation to handle repetitive manual labour, so older workers can prioritise tasks that require their skills and knowledge.

Studies show that after the retirement wave, companies will be facing the most significant frictions. Manufacturing firms find it extremely difficult to recruit older qualified workers for executive positions, even more than other industries.

Employers are adapting to workers’ needs by implementing flexible hours or phased retirement. They are also encouraging them to return part-time after retirement, as mentors for training programs.

Because their know-how is challenging replacing amid talent shortage, firms offer project contracting to older workers so that they can come back occasionally. Ultimately, a lucrative proposition that companies in the UK and various countries are implementing, is the planned extension of retirement and pension eligibility age.

Shapers of the future

Manufacturing companies are actively focusing on the well-being and productivity of their experienced workforce, helping them:

reskilling, upskilling
live a healthier life
have a flexible work-life balance
have financial well-being support
Serve as teachers for the younger generations.

According to recent statistics, manufacturing is the fifth amongst the top struggling sectors of skill shortage, after mining, agriculture, tourism and business administration. The hiring process is taking employers two months longer to find the right people with the right skills. Therefore, manufacturers are trying to create a symbiotic relationship with their older workers, to turn the ageing phenomenon to everyone’s advantage.