Here's How Much The Skills Shortage Is Costing America's Manufacturers

One of the biggest complaints we hear from America’s employers is the inability to find skilled workers.

This is a big problem in an economy that’s trying to grow. Not only does it hinder growth, it also puts a crimp on profit margins.

Accenture and The Manufacturing Institute recently published the findings of a big study the conducted, which included a survey of over 300 manufacturing executives.

Of those surveyed, 39% said they faced a severe shortage of qualified applicants and 60% said it was difficult to hire the skilled people they needed.

Accenture ran the numbers to see what this meant in terms of costs:

Respondents in our survey reported three primary areas of negative impact due to these roles going unfilled. The average company in our survey reported a 12 per cent increase in overtime cost, which, for our median company, would increase overtime costs by $US1 million annually. Our median company also matches the average survey respondent in that they report a 10 per cent increase in downtime and an eight per cent increase in cycle time.

Based on those assumptions, the analysts found that a hypothetical 2,000-employee manufacturer with $US500 million in annual revenue was losing around 11% of operating earnings, or $US4.6 million per year.

11% of earnings is no small amount of money.

Accenture said that over 50% of those surveyed had plans to increase US-based production by at least 5% in the next five years.

Unemployment remains arguably high in the U.S. But it’s becoming increasingly clear that there are jobs available for those with the right skills.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.