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.
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