Facing labour shortages and workforce challenges in manufacturing 

Labour shortages and a growing manufacturing skills gap are two of the most pressing challenges in manufacturing today. With industry demands evolving faster than the workforce can keep up, manufacturers are feeling the impact not just in production delays but in missed growth opportunities. According to Hexagon’s 2025 America’s State of Manufacturing Report, these challenges are compounded by insufficient reskilling efforts – with only 8% of manufacturers actively addressing workforce upskilling. 

For an industry built on precision and efficiency, these gaps in skilled labour can feel like insurmountable roadblocks. But the truth is, they represent an opportunity for forward-thinking manufacturers to innovate, adapt, and build a more resilient workforce. 

Here, we’ll break down the impact of labour shortages and the skills gap on manufacturing and explore actionable strategies to overcome these challenges. 

The growing labour shortage crisis

Why are labour shortages worsening?

Manufacturing remains one of the hardest-hit sectors when it comes to finding and retaining skilled workers. Several factors have contributed to this crisis, including the following:

• Aging workforce: Many experienced machinists, CNC programmers, and quality engineers are reaching retirement age, leaving a knowledge gap that isn’t being filled fast enough.
• Negative perceptions: Manufacturing is often viewed as an outdated or physically demanding career path, deterring younger generations from entering the field.
• Rapidly evolving technologies: With new tools and techniques like automation and AI reshaping the landscape, current skills are quickly becoming obsolete while training programs struggle to keep up.

The result? Labour shortages are creating significant pain points for manufacturing businesses, adding pressure to already-tight production schedules and reducing overall efficiency. 

The cost of labour shortages

The effects of workforce shortages ripple throughout the production process. Here’s how the manufacturing skills gap impacts critical operations:

1. Delayed production timelines: With fewer skilled workers available, production schedules often face delays, increasing lead times for finished goods. 
2. Higher defect rates: An understaffed or untrained workforce can result in higher error margins, adding inspection costs and compromising client satisfaction. 
3. Reduced capacity for innovation: Without key technical expertise, manufacturers struggle to adopt new methodologies or scale operations effectively.

To remain competitive, confronting the labour shortage head-on is not optional, it’s essential for survival. 

Bridging the manufacturing skills gap

Why upskilling is crucial

Hexagon’s report highlights a critical reality – only 8% of manufacturers are investing in reskilling efforts. This statistic underscores a massive opportunity gap. With rapid technology advancements, workers need ongoing training to effectively operate advanced machinery and software. Without it, even the best tools can’t perform to their potential. 

By nurturing a more adaptable workforce, manufacturers can:

• Maintain production efficiency despite challenges.
• Close quality gaps by empowering employees with better tools and processes.
• Retain current employees by offering them personal and professional growth opportunities.

Key strategies for workforce development

To transform labour shortages into workforce opportunities, manufacturers need a proactive, multi-faceted approach. Below are actionable strategies to help bridge the gap:

1. Streamline reskilling programs

One key takeaway from Hexagon’s report is that manufacturers must simplify their approach to onboarding and training. Start small by focusing on key processes where errors or inefficiencies are most common. Use detailed, hands-on training that builds confidence and competence in high-priority tasks. 

Example: Pair new hires with experienced machinists to receive on-the-job training while adopting intuitive software tools for instant guidance and troubleshooting. 

2. Leverage digital technologies

Modern tools like simulation software, AR (augmented reality), and VR (virtual reality) training platforms allow employees to upskill in a risk-free digital environment. This approach resonates especially with younger workers familiar with these technologies, making training more effective and appealing. 

Pro tip: Implement these solutions incrementally to avoid overwhelming your workforce and ensure seamless adoption. 

3. Promote manufacturing as a career

The manufacturing industry is often perceived as stagnant or unwelcoming. To alter this perception and attract a younger workforce, manufacturers need to combine community outreach with modern recruitment tactics:

• Partner with educational institutions such as trade schools and community colleges to highlight the exciting potential in manufacturing careers. 
• Offer apprenticeships and internships that provide real-world experience. 
• Showcase success stories from employees about opportunities for growth and advancement. 

4. Focus on retention

It’s far easier to retain skilled employees than to find new ones. Offer clear career growth pathways, competitive wages, and a supportive environment where employees feel valued. On-the-job recognition and incentives for quality performance go a long way in reducing turnover.

5. Invest in user-friendly tools

Today’s workers are digitally inclined but skeptical of overly complex tools. Investing in easy-to-learn systems with guided workflows can help reduce the learning curve, keeping your team productive while minimising frustrations. 

What the future holds

Many industry leaders are already taking on these challenges head-on and seeing incredible results. For example, several manufacturers have implemented adaptive technologies that not only improve inspection accuracy but also allow their existing team to deliver precision results with minimal hands-on guidance. 

By adopting a proactive approach to workforce development and reskilling, your company can remain competitive in a challenging market. Remember, labour shortages aren’t a dead end; they’re an opportunity to rethink processes, adopt smarter tools, and position your business for long-term success. 

Take action now

Hexagon’s 2025 America’s State of Manufacturing Report offers deeper insights around these workforce challenges and labour shortages. If you want to modernise processes, reduce inefficiencies, and empower your team, this report is the key for you to see what your peers are feeling within the industry. 

Download the report today to take the first step in future-proofing your workforce and operations.