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Revitalizing the Manufacturing Sector for 2022

December 17, 2021 Scott McNeil-SmithIndustry News and Events 678 Views

Workforce Development: People are a Key Driver

By Scott McNeil-Smith, Vice President, Manufacturing Sector Performance, EMC

It’s not hard to see that COVID-19 continues to dominate our daily lives. The impacts have touched everyone, everywhere. There has been one sector however, that even with the setbacks has helped our economy rebound and even show signs of growth – manufacturing.

Despite all that has occurred in the last 20 months, manufacturers are leading the way to recovery, however more is needed to ensure this continues and to revitalize the sector in 2022. COVID notwithstanding, during the past 3 years the top issue affecting manufacturers has been the skills and labour shortage. Not just the absence of skills, but also an alarming absence of available workers with any skill set.

Manufacturing employment is highly valuable, with predominantly full-time positions dispersed all over Canada, offering substantial potential for wages, benefits and career progression. This provides stability to hundreds of thousands of families and surrounding communities across the country, however looking at the shortage of industry workers with appropriate skills, the lack of awareness and poor attitudes towards working in manufacturing presents a significant disadvantage for the sector.

The needed talent is not the same in every region and traditional local labour market sources for workforce supply are not sufficient to fill the vacancies nor resolve skills gaps. Restricted travel and closed borders have also removed a significant source for employers to recruit new Canadians.

Manufacturers are also faced with unprecedented challenges associated with the accelerating pace of technological change, especially with respect to advanced manufacturing, digitization, automation, robotics, AI and other technologies. Unfortunately, this pace of change is rapidly increasing, while the pace of human capability is not keeping up. A call for talent strategies based on industry need and better labour market intelligence is needed for the Canadian manufacturers to succeed.

Canada’s workforce needs to adapt their skills to the changing nature of the work, and industry employers need to evolve to include new methods of recruitment, onboarding, upskilling and reskilling, to more effectively meet the challenges of developing and maintaining a vibrant and capable workforce.

Ensuring a steady workforce supply for future manufacturing is extremely important. EMC estimates 1/5 (20%) of the current manufacturing workforce will be eligible to retire in the next 10 years, which combined with current vacancies and upward productivity demands, will require a 20% to 30% increase in skilled worker supply to meet current and future performance and technology demands before 2030.

To offset this, attracting and equipping younger workers earlier, as well as providing clearer paths to employment, opportunity, growth and development for diverse and barriered groups who might not otherwise consider manufacturing for a career, is an important part of this strategy.

EMC continues to identify and develop opportunities in these areas, with a focus on paths to success for both manufacturers and the workforce. One such initiative includes work-integrated learning, wage subsidized job placements and pre-apprenticeship experiences.

Currently, EMC is working with post-secondary institution partners to effectively align 'work-ready' skills of students with the skills required by Canada's manufacturers. WILWorks will provide value to manufacturing employers by providing wage subsidies to employers that offer quality student work placements.

Currently, Canadian manufacturers are welcome to apply for wage subsides of up to $7,500 per post-secondary students and Ontario manufacturers are welcome to apply for up to $3,500 per high school student placement.  Interested manufacturers will find more information, and may apply for these subsidies, through EMC’s website.

EMC is supporting these experiential positions with Manufacturing Essentials Certification training, workplace performance projects and other advanced learning opportunities such as micro-credentials.

On the manufacturing operations side, the #2 most critical issue for manufacturers has been the increasing costs of production. Rising material costs, cost of legislation, energy, overall OpEx, scarcity of supply and supply chain disruptions – combined with the inability to fill vacancies and grow the workforce, has led to major capacity underutilization and in some cases increased unfilled orders and lost sales.

The combined economic impacts are not sustainable. Fortunately, while supply chain disruptions and material shortages represent a significant physical barrier to manufacturing success, these constraints have also presented a number of opportunities for Canada’s manufacturers to demonstrate their abilities on a global scale, to recapture some local markets and re-shore production previously moved overseas.

Adding new products, diversifying production and re-engaging more geographically local markets resulted in a quick rebound on manufacturing production and sales, albeit needing a steady hand to navigate a twitchy marketplace, in light of industry operating at less than 80% capacity in Canada, and outstanding orders sometimes exceeding two months of national sales.

For 2022, EMC is continuing its efforts to support our manufacturers, to tackle these issues and help revitalize the sector’s people, plant and process improvements. Manufacturers represent more than 12% of our total workforce and 10% of GDP in Canada. We have seen the sector rise to the challenges of the past 20 months and are fortunate to have such a vibrant sector to continue in the coming years.

Manufacturers who would like to leverage the networking opportunities, expertise, training, education, and other resources, funding and support programs available through EMC can reach out directly to their local Manufacturing Consortium Manager, or through EMC’s head office. To learn more about these benefits and how to become a part of EMC, please visit emccanada.org.