- To grow, process industries must expand their workforces
- Countries worldwide are seeing the tightest labor markets in 20 years
- Process companies are facing a wave of retirements
- Few in younger generation are looking for careers in industry
BOSTON, June 5, 2024 /PRNewswire/ — Process companies, in sectors including metals, mining, chemicals, building materials, paper and packaging, and agriculture, need to expand their workforce significantly to sustain growth. However, in 2022 and 2023 many economies worldwide experienced the tightest labor market conditions in two decades. Singapore had 1.9 more job openings than job seekers in 2023. the ratio in the US was 1.5 times, and in Japan it was 1.3. These are among the findings of a new report published today by Boston Consulting Group (BCG), titled Four Ways Process Industries Can Break Out of the Talent Trap.
Several additional factors are making the labor shortage particularly acute for process companies. The high median age range of employees in process industries will lead to a great wave of retirements. Manufacturing and agriculture are in the 80th percentile for having the oldest employees, and the overall industry has a median age of 42 to 44. This is compared with a median age of 36 to 38 in amusement, and 38 to 40 in retail.
In addition, process industries are facing difficulties replacing lost talent, with younger generations holding comparatively negative perceptions of the sector. Only 2% of 18- to 24-year-olds in the UK say they want to work in manufacturing, while in Canada, the number of mining graduates has dropped by 50% since 2015.
“The current workforce challenge will be further exacerbated for process industries as we enter a decade that will see “the great retirement wave”–companies are unable to maintain the required replacement rate, which will further impact productivity”, said Karthik Valluru, BCG partner and managing director, and coauthor of the report. “Process industries are competing for a scarce talent pool that hasn’t traditionally considered careers in manufacturing and is hard to attract to remote locations. Getting serious about workforce planning is crucial to navigating this increasingly dynamic and competitive talent market.”
The report outlines several levers that process companies can pull to bridge the talent gap, including:
- Adopting strategic workforce planning to ensure the right people with the right skills are in the right positions at the right times, as well as to forecast future workforce needs
- Growing generative leaders, who can reimagine and reinvent the business to bring a sense of fulfilment in the work environment
- Reimagining the corporate center’s role to ensure that structures and decision rights reflect business needs. This can be a more or less centralized approach
- Embracing automation to improve productivity, using a combination of zero-based design and digital technologies such as GenAI and automation
Download the publication here:
https://www.bcg.com/publications/2024/how-process-industries-can-escape-the-talent-trap
Media Contact:
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SOURCE Boston Consulting Group (BCG)
