Priority #1: Manufacturing Workforce Development

Based on my 20 years consulting as a talent specialist and recruiter, one of the major challenges U.S. factory expansions and startups face is finding technically skilled workers.

There are a host of contributing factors:

Aging Workforce and Retirements: A large portion of the experienced manufacturing and construction workforce is nearing retirement, and there aren’t enough younger workers entering these fields to replace them.

Decline in Vocational Training and Apprenticeships: For decades, there’s been a societal push towards four-year college degrees, leading to a reduced focus and funding for vocational training and apprenticeship programs that traditionally supplied skilled trades.

Increased Demand from Reshoring and Investment: The success of reshoring and government incentives (like the CHIPS Act and Inflation Reduction Act) is amplifying the demand for skilled workers, putting more strain on an already tight labor market.

Specialized Skills Gap: Modern manufacturing facilities require highly specialized skills related to automation, robotics, AI, data analytics, and advanced materials, for which the current workforce lacks adequate training.

Perception Issues Persist: Manufacturing and skilled trades careers often suffer from outdated perceptions of being dirty, dangerous, or offering limited advancement, deterring younger generations despite competitive pay and benefits in modern factories.

Our recent Reshoring Survey in collaboration with Harry Moser, founder of the Reshoring Initiative®, confirms what many in the manufacturing and economic development sectors have been seeing firsthand. The skilled labor shortage is a barrier to foreign direct investment (FDI) and reshoring. We have evidence of factory startup and expansion projects in the U.S. that have already faced delays or significant challenges due to the difficulty in finding skilled workers.

TSMC’s Arizona Chip Factory is perhaps the most widely cited example. TSMC announced significant delays to its $40 billion Arizona facility, pushing back the opening of its first fab from 2024 to 2025 and a second stage has also been delayed until 2027 or 2028. A primary reason explicitly stated by TSMC chairman Mark Liu was the “labor issues,” specifically a shortage of skilled construction workers, technicians, and engineers needed for such a highly specialized and complex build.

Other public announcements of delays due to labor aren’t as prominent or as specific as TSMC’s. Examples include Intel and Micron, both undertaking massive expansions in Ohio and New York respectively. They have consistently highlighted the critical need for a strong pipeline of skilled talent – from construction trades to highly specialized engineers and technicians – to staff these new facilities. Industry reports frequently mention the potential for these projects to be hampered if the workforce gap isn’t addressed.

States and Corporations at the Forefront of Workforce Development

Without cohesive federal/state policies aimed at cultivating the skills needed, there are some forward-thinking measures being taken by states and corporations to bridge the talent gap.

Tennessee is taking a proactive approach to ensure a competitive workforce. Governor Lee recently announced more than $53 million in investments to recruit new businesses and support workforce growth and development. That includes $6.3 million to launch a statewide Micro-Credentialing Program, building short-term, targeted certifications in high-demand fields.

Electrolux, in partnership with the Tennessee Department of Labor, announced just this week their first U.S. apprenticeship program. This was specifically for developing Tool and Die makers which is a great example of a field in which there is not enough infrastructure or programs for technical schools to meet the specific needs of manufacturers. In this field the workforce is quickly approaching retirement age and companies face significant cost in elevated wages and hiring strategies to entice employees to relocate to fill roles in these positions.

South Carolina began courting manufacturers decades ago and now boasts a robust network of technical colleges that work closely with industry to develop relevant curricula and provide handson training for high-demand manufacturing skills. Many offer certificates, diplomas, and associate
degrees in areas like mechatronics, advanced manufacturing technology, CNC machining, and welding. South Carolina has also actively promoted and supported registered apprenticeship programs, often partnering with individual companies and the technical colleges. These “earn while you learn” models are highly effective in developing skilled trades.

Building on current initiatives, there’s a significant opportunity for states to further bolster manufacturing workforce development through enhanced investment in vocational education at earlier stages. This commitment should begin at the state level, fostering comprehensive vocational programs in middle and high schools. Key to this success will be actively seeking partnerships with local manufacturers to ensure curricula are industry-relevant and provide hands-on experience. Concurrently, efforts must be made to improve communication about these career paths and establish clear, attractive career-pathing programs for students. While some states, like Georgia, have made strides in this direction, others, despite their robust post-secondary technical school partnerships with industry, still lag in substantive investment at the secondary education level. Expanding these foundational vocational programs is crucial for cultivating interest in manufacturing careers from a young age and building a sustainable talent pipeline.

Manufacturers must adopt a proactive stance in engaging with workforce development resources, as state agencies and educational institutions are not routinely equipped to initiate direct outreach to individual employers. A critical first step involves contacting the state’s Department of Labor, which can not only inform manufacturers of available programs but also elevate the state’s awareness of specific industry needs. Similarly, establishing direct communication channels with local school districts is essential to align educational curricula with manufacturing requirements, thereby promoting direct employment pathways for students, post-graduation. This proactive engagement by manufacturers is indispensable for ensuring the development of the precise skillsets demanded by the future workforce.

KEEL USA is a model example of a manufacturer taking the initiative to do something both innovative and patriotic 15 years ago to address a critical skilled welders shortage that they were experiencing. They established the MERRILL Institute. Recognizing that the talent gap extended beyond their own needs, KEEL’s vision quickly broadened to serve the wider community and industry, offering comprehensive, hands-on, state-of-the-art welding training to strengthen the regional industrial base and ensure a steady talent pipeline for the entire sector. Now an accredited school, KEEL provides students with real-world, practical experience from AWS-certified instructors, while also fostering partnerships with local educational institutions and workforce boards to champion manufacturing excellence and address the pervasive skilled labor shortage.

Conclusion

Ultimately, the findings from the Reshoring Survey reinforce a critical truth: for the U.S. to successfully reindustrialize and bring manufacturing back home, addressing the skilled labor
shortage isn’t just one factor among many—it’s the number one priority. Without a robust, well-trained workforce ready to step into these modern factory roles, the ambitious goals of reshoring will continue to face significant delays and remain unfulfilled. The examples of proactive states and companies offer a blueprint. A more cohesive, national commitment to shifting mindsets and investing in comprehensive workforce development programs is essential to truly capitalize on the opportunity to bring manufacturing excellence back to America.

Are you ready to build a high-performing team for your new manufacturing facility and ensure your reshoring initiatives succeed?

For expert guidance and support in mastering your talent strategies and ensuring flawless execution,
contact Kathy Nunnally, President of Regions Recruiting®, at knunnally@regionsrecruiting.com.
Ph 404-445-7911.