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The Transformation of Manufacturing: Talent Management Considerations

Part 1 of 3. This article is based on the findings in the report, Understanding the Impacts of Industry 4.0 on Manufacturing Organizations and Workers, prepared for the Smart Factory Institute and written by Chris Cunningham, PhD, UC Foundation Professor of Psychology, and Scott Meyers, Graduate Assistant, Psychology Department & Smart Factory Institute, from the Industrial and Organizational Psychology Department at the University of Tennessee at Chattanooga.

All the effects of Industry 4.0 on the manufacturing industry and workforce create opportunities and challenges for the broader management of talent within these organizations. Failing to respond to these talent management challenges will prevent manufacturing organizations from realizing the benefits of Industry 4.0 advancements. To do this, manufacturers will need to actively attract, retain, and develop emerging and existing talent. In this first of the three-part series we will explore talent recruitment, acquisition, selection, and placement.

Talent Recruitment, Acquisition, Selection, and Placement

Industry 4.0 presents a number of challenges and opportunities linked to the recruitment, acquisition, selection, and placement of talent into manufacturing organizations. These challenges are linked to the availability of talent, required worker KSAOs and competencies, and methods of recruitment and the talent pipeline (Vozza, 2019). Although, training and development of the existing manufacturing workers is a primary concern for most manufacturing organizations, acquiring the right new and emerging talent will also be an essential part of the overall industry’s strategy for meeting labor needs.

One of the biggest challenges pertaining to manufacturing talent acquisition seems rather simple: there is not enough supply to meet demand. Addressing this supply issue, however, is not so easy. There is a lack of available and qualified talent that possesses the necessary KSAOs and competencies for success in manufacturing work (Turcu & Turcu, 2018). There is also an insufficient level of interest and motivation to enter into manufacturing-related positions. Projections show that 3.5 million people will be needed to fill manufacturing vacancies in the U.S. within the next 10 years (Hernandez-de-Menendez et al. 2020; Wang, 2018). More specifically, this projected talent shortfall is particularly pronounced within the computer/mathematics domain, where it may rise from 571,000 to 6.1 million by 2030. It is also projected that there will be an increased deficit in the labor supply to meet engineering and other related job demands from 60,000 now to around 1.3 million individuals by 2030 (Strack et al., 2021). Although the overall supply of labor in the U.S. may grow in the coming years, key deficits like these in crucial manufacturing-related fields will limit the adoption and ultimate impact of Industry 4.0.

Another challenge facing recruitment are new types of workforce competency and skill requirements. Labor market competency requirements are changing to meet new demands (Mohamed, 2018; Hernandez-de-Menendez). It is estimated that 60% of all current occupations across industries could have up to 30% of their current core competencies replaced by automation (Manyika et al., 2017). An implication of this is that talent acquisition strategies must not be based on historical or even current requirements, but rather on what the talent requirements will be in the near and intermediate future as manufacturing jobs become more technologically advanced. There will continue to be a demand for social competencies in manufacturing talent, especially for jobs that will not be fully automated and will require human interaction and compassion (Strack et al., 2021). However, new workforce KSAOs and competencies will be needed to understand and operate within Industry 4.0, especially within new and emerging technical, strategic, and complex jobs. This creates large shifts in the types of talent manufacturing has traditionally recruited for. There is a growing demand for technological and methodological competencies. Computer-related occupations in science, technology, engineering, and math are increasing in all industries, creating strong competition for limited talent. Consequently, jobs that rely on talent with computer/math training are likely to suffer the greatest talent deficits (Strack et al., 2021). Digital literacy, data analytics, IT capabilities, and engineering skills are other KSAO and competency domains needed to understand and operate within Industry 4.0 and these are also in short supply.

Effectively reaching and communicating with this talent pipeline to attract high-quality emerging talent will require organizations to educate prospective applicants about the current and near future reality of working in Industry 4.0 manufacturing environments. Effectively communicating what this type of work really entails and effectively rebranding and marketing the industry to appeal to existing and emerging workers presents a powerful opportunity for the manufacturing industry to build and energize its future workforce. Developing current realistic job previews to highlight the new nature of manufacturing work and its increasingly complex and strategic, technology-driven jobs will help to engage needed talent within STEM fields.

Updating these types of realistic job previews also presents manufacturing organizations with an opportunity to more clearly explain career paths and trajectories for existing talent within an organization. For example, this could be a strategy for informing lower-skilled workers that as Industry 4.0 becomes more fully adopted, upward career movements may be limited without reskilling, as more traditional and administrative management-level roles are replaced or restructured because of automated monitoring of production processes (Dixon et al., 2021; Knowledge at Wharton, 2021). This is not simply a random example to highlight, given that there is now often an implicit and unspoken contract of promised career advancement based on tenure and experience in a manufacturing production job. Organizations should be mindful of ways in which Industry 4.0 may disrupt this type of anticipated and traditional linear career progression (Dixon et al., 2021; Knowledge at Wharton, 2021). To state it clearly, performing well in current roles, building a solid performance record, and developing experienced-based skills will no longer guarantee linear career advancement under Industry 4.0.

This raises another potential opportunity for manufacturing organizations to emphasize when recruiting talent – the concept of dynamic and stackable career progressions. Broadening the horizon of work and utilizing horizontal or lateral career moves (e.g., career lattices instead of career ladders; Giannosa, 2019) is one way of making this reality clear. The implication is that manufacturing workers must adapt and develop the required KSAOs and competencies to perform effectively within Industry 4.0 and to progress in their careers. The only way to do this, given the rapid and ongoing nature of technological advancement, will be to practice continuous learning and to develop and maintain diverse technology-related skill sets.

A final Industry 4.0 related challenge and opportunity in this area of talent management is to figure out ways to create concentrated and targeted recruitment efforts for emerging workers. This might be done through partnerships with school and community organizations. It is unlikely, however, that conventional apprenticeship programs can prepare the emerging workforce for the complex technologies that are now becoming integrated into manufacturing (Shet & Pereira, 2021; Wang, 2018). Therefore, new strategies for engaging this workforce with different types of early-stage outreach and development opportunities need to be developed.

Shifting and re-training the existing workforce will not be enough to meet these Industry 4.0 labor demands; talent recruitment from the emerging workforce will be essential. However, the manufacturing industry cannot meet its talent needs solely from an emerging population. For this reason, there are also many important training and development challenges and opportunities brought on by Industry 4.0.


Technology will pave the way for a more diverse manufacturing work community. Studies have shown that companies that have an inclusive work environment produce better results. Peak Performance can help you revise job descriptions to eliminate bias and attract diverse candidates. Contact Peak Performance today and let us help you effectively reach high quality talent for your organization.

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