Combatting the industrial talent crisis rests on the shoulders of two transformational forces: automation and digitization
20/12/2024 Schneider Electric UK Ltd
By Aurelien Le Sant, CTO for Industrial Automation at Schneider Electric
Almost all sectors across the globe faced challenges for talent attraction and retention in 2024. From the lack of skilled workers to changing workforce demographics, the skills gap for top talent grew significantly, and the industrial sector was no exception. According to research from Schneider Electric, over half of industrial companies (52%) identify talent acquisition and retention as a primary challenge, with many experiencing a shortage of skilled manufacturing and industry professionals.
A significant challenge is an ageing workforce, particularly in regions such as Japan, Europe, and the US, with employees aged 55 and over now making up 25 - 40% of their respective workforces. What’s more, more than half of industrial operations, plant, and maintenance managers consider talent acquisition a key challenge.
Tackling the current talent and retention challenge sweeping across the industrial sector rests on the shoulders of one thing - innovative technology. Organisations that embrace advancing technologies, can not only address workforce shortages and enhance retention but also attract talent with diverse skills and capabilities, while improving working conditions for everyone.
When it comes to future-proofing the industrial workforce, automation and digital technology is a key lever. With this in mind, let’s explore how industry can best adapt a digital-first culture to enhance retention strategies.
Combatting the skills gap through digitization
Despite many industrial sectors, like manufacturing, traditionally holding onto legacy systems and technology, encouragingly, 70% of operations, plant, and maintenance managers agree that digitization will help tackle current talent shortages, helping to upskill current employees on updated processes, whilst attracting younger, more digitally native talent. But what does this look like in practice?
First, digital transformation can help industrial companies to make the best use of their existing talent. As with any sector, employees are the main asset of a company. While digitalization will inevitably change the nature and scope of many operational job roles, the adoption of new technologies will also drive upskilling and reskilling efforts. Digitalization will also enable remote and more flexible working opportunities for some roles and enhance workplace safety. Therefore, the objective of digital transformation strategies should focus on developing and supporting a more empowered, highly skilled, and productive workforce.
With traditional job roles quickly evolving, another benefit of digitization is the range of plant personnel will expand in tandem. Here, automation can make the workplace more accessible to workers without traditional industrial skill sets. For instance, the new generation of automation engineers who are used to working with modern coding tools and IT-styled workflows will look for digitalized companies that are right for their skill sets: approaches including artificial intelligence usage, devops and edge computing are now part of requirements. This opens up roles for people who come from more tech-heavy backgrounds rather than having purely manufacturing experience.
As for employment stability, automation can help to bring higher wage growth and increase cumulative earnings. As a result, job satisfaction improves and skill levels increase, bringing even more value to the company.
Leveraging automation to bolster productivity and improve working conditions
In addition to minimizing the talent drought, digitization and automation are invaluable tools to enhance on-site working conditions for staff. Almost half of managers are looking to implement significant automation to address most manual, high-risk tasks in the next three years. This is thanks to digitization and automation enhancing working conditions by handling repetitive, heavy, or hazardous tasks more effectively and reducing the workload on personnel. As a result, this diminishes, or even eliminates, physical danger and workplace injuries that can carry significant direct and indirect costs for both the injured worker and the industrial company.
Additionally, automation can improve operational job roles by reducing repetitive tasks and helping employees make more informed decisions. In quality assurance, for example, digital technologies can automate tasks such as document control, data entry, visual inspection and reporting, allowing staff to use real-time data insights to identify and prevent problems earlier.
Another example includes the use of digital twin technologies to design, optimize, test, and validate digitalized models of real machine solutions. Doing so in a virtualized environment before commissioning new solutions will increase efficiency, reduce errors and enable manufacturers to focus their time on more value-adding activities while saving time and money further down the line. Associated with generative AI at all the steps of the solution creation, this could drastically increase both the engineering efficiency and quality.
Embedding digitization into company culture
As industry becomes more digital-first, so must the roles that are offered. Now, almost half (45%) of industrial companies believe digitization will be the primary reason that new operational technology (OT) job roles will be created in the next three years. Additionally, more than four in five agree that digitization would support either the generation of new job roles or the extension of existing ones.
Ultimately, digitization and automation augment human work – they do not replace it. Industry’s organizational leaders must ensure they have stakeholder buy-in from both IT and OT teams to make real progress beyond proof of concept and pilots. Beyond this, they must clearly communicate the advantages of a digital-first setup to the entire workforce.
Leadership should emphasize that digital transformation is an opportunity to utilize new technologies that boost efficiencies, achieve better synergies, and add value to the employee experience. For instance, a shortage in skilled labor may impede innovation activities and result in lower productivity and growth. In the longer term, a lack of innovation could have a broader and more serious impact, leading to industry stagnation and a weakened competitiveness of the broader economy.
Looking ahead
As the industry looks to modernise operations, true digital innovation should not be hindered by worker shortages or the need for new skill sets. With digital technologies projected to create at least 12 million more jobs than they displace, in 2025 business leaders must seek external partnerships to enhance their expertise. A digitization strategy is only as effective as the digital transformation technology vendors that support it. As such, industrial organisations must choose their partnerships wisely, and the journey towards digitization, automation, and resolving the talent shortage will be seamless.
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Schneider Electric UK Ltd
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