A Publication of WTVP

The NAM Manufacturing Institute/Center for Workforce Success recently released the long-awaited 2005 Skills Gap Report (the full 32-page report is on NAM’s web site at In comparing the results of this most recent survey to the one conducted in 2001, many of the same issues are still with us—lack of basic employability skills and the negative impact the skill shortage has on a business’ ability to compete.

From a human resources perspective, a key difference between the two survey reports is the new inference to whether companies are maximizing talent management tactics. According to the study, it’s unclear whether manufacturers are engaging in the right type of activities and employing the right tactics to attract, develop, and retain a high-performance workforce given the realities of the current environment. In addition, the skills gap has broadened in just four years, relative to the extraordinary increase in employee performance requirements. These two findings on their own should be a wake-up call for organizations to look a little deeper into their human resources practices.

In light of this recent study, it’s more important than ever for employers to have a real working knowledge of their current workforce. For example, how is your turnover? If it’s high, do you know why it’s high? The impact of high turnover is like high blood pressure; it can be killing you, and you don’t even realize it. Skills training is extremely important, but training alone won’t be enough to keep your best employees and position your organizations as a destination for a talented workforce.

According to the study, the picture that emerges is both more complex and more disturbing than in the past because it exposes a broadening gap between the availability of skilled workers and the employee performance requirements of modern manufacturing. In sum, the confluence of the economic trends and the increasingly competitive global environment has created an extraordinary gap between the supply of skills available and the performance requirements of the workforce needed for modern global manufacturing. This human capital performance gap threatens our nation’s ability to compete in today’s fast moving and increasingly demanding global economy. It’s emerging as our nation’s most critical business issue.

Add the results of this study to the volumes of articles already written regarding the looming labor shortage and the projected impact on our economy. The 2005 Skills Gap Report references the supply and demand side laws of the labor market. On the demand side, employers need more highly skilled employees who are exceptionally engaged and innovative. On the supply side, the exodus of the Baby Boomer generation from the workforce with substantial accumulated talent, combined with the changing attitudes about careers and job satisfaction among Generation Yers (the new workforce), are creating a gloomy outlook.

So, as an employer looking at your workplace, what are you actively doing to help close the gap? If you wear the human resources professional hat in your organization, what are you doing strategically to improve the talent pool? Now is the time to act. IBI