How to survive the coming workforce crisis

North American industry faces a predicted shortfall of 875,000 skilled workers by 2020. Surviving this contraction will require accelerated changes in connectivity, culture and community.

By Steve Diogo

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A trend is just a trend until it hits the bottom line; then it becomes a crisis. When it comes to the massive workforce contraction threatening global industry, that collision is imminent. Its shockwaves will be felt in reduced productivity, profitability and safety unless companies act now to ramp up expertise, initiate culture change and adopt new technology for the road ahead.

The good news is that technology is available in the form of accessible and affordable processing power, connectivity, remote monitoring and data analysis capabilities that are enabling the Industrial Internet of Things.

Rockwell Automation is leading the charge to usher in this Connected Enterprise: the company’s overarching approach to networked connectivity that leverages the IIoT to empower a more efficient, engaged and secure industrial workforce.

And beyond the company’s technology platform, Rockwell Automation is collaborating with its customers, vendor partners, educators, consultants, integrators and communities to help industrial companies create leaner, more flexible and efficient operations and navigate the training, recruitment and cultural changes that need to occur.

The challenge

In North America, the average age of skilled industrial workers is 56, and one-third of workers are over age 50. Skilled workers show a strong tendency to retire on schedule rather than extending their working years. By 2020, in just a few years, more than 115 million skilled workers will be nearing retirement, beginning a drain that will result in a shortfall of 875,000 skilled professionals in the coming decades, according to generally accepted estimates. And that’s just North America.

“This is far from just a U.S. problem,” said Steve Ludwig, program manager, safety, at Rockwell Automation, citing global workforce needs. “In China, the over-65 population will climb to 210 million and by 2050, retirees will make up one quarter of the population, eclipsing the entire population of the United States. In Latin America, the birth rate is plummeting, significantly shrinking the talent pool in these countries. In the European Union, governments are pushing to keep people in the workforce longer. This is a global problem. ”

At the same time, global GDP growth rate is expected to decline from 3.6 percent per year between 1964 and 2012, to 2.1 percent for the next 50 years. In a January 2015 article in Harvard Business Review, the director of McKinsey Global Institute, McKinsey‘s business and economics research arm, projected that it will require 80 percent higher productivity growth to offset the impact of declining labor availability.

“Obviously this is not a short-term regional problem,” Ludwig said. “It’s an issue that many companies are dealing with today and will have to deal with for the foreseeable future.”

A safety issue

Beyond productivity threats, this transformation also heralds safety risks: “When large numbers of experienced workers are replaced by far fewer young, inexperienced workers—who have to do more with less—safety becomes a serious concern,” Ludwig said.

“Younger and less experienced workers are more frequently injured and tend to have more acute, serious injuries,” said Ludwig. “Several studies show that younger workers—under age 25, and in particular those with less than one year on the job—have much higher injury rates. This is generally attributed to inexperience, cognitive and developmental characteristics, hesitance to ask questions, misjudging risks and failure to recognize workplace dangers. They don’t have the experience to understand the hazards that older workers do. They tend to take more risks, resulting in more injuries.”

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