Labor Shortage for Material Handling

In June 8, 2015

The Perfect Storm or Not?

Projections are in—Baby Boomers will retire and slow the growth in the labor force at a rate less than the projected growth in the GDP. The total US labor force will grow just over .5% per year from 2012 to 2022 (10.8% total). This low growth rate is attributed to Baby Boomers bringing the labor participation rate down from 63.7% in 2012 to 61.6% in 2022.

At the same time, GDP is expected to increase 2.6% per year, for a total of 26%. Replacement needs are in addition to jobs added from this growth. So basically, from 2012 to 2022, 67.2% of job openings will be from replacement not growth. Look at these numbers:

  • The percentage of Skilled Trades Workers (welders, electricians, machinists, etc.) over 45 years of age in 2012 was 53.5%.
  • The percentage of all workers over 45 years of age in 2012 was 44%.
  • 25% of the skilled work force will be over 55 in 2022. Bodies typically do not hold out as long in the Skilled Trade occupations.

Perfect Storm ArticleNow consider this—construction is projected to grow by 21% or twice the general growth rate, adding 1.6 Million new jobs.

Maintenance and repair jobs will grow by 9.4%. In addition Material Moving Occupations will grow 8.6%. And we’re going to see the same trends worldwide.

In 2014, The Conference Board studied 32 national economies, 266 industries, and 464 occupations. The results were eye-opening. Germany will be hit the hardest by the projected change to the workforce and Central European economies face a risk nearly as high. The Asias/Pacific labor market—already the world’s tightest—will tighten even more. UK, France, and Canada will generally mirror the US labor market.

How Should We Move Forward?

In order to address these changes, we must make sure to compensate for what the market will bear. We can do this by increasing production and workforce training. But perhaps most importantly, we as an industry need to expand our utilization of women, minority and senior workers.

As the number of women in work force increases by 5.4%, we can train them to be installers and technicians. The number of African American, Asian-American and Hispanic workers will increase by 10%, 23.8% and 27.8% respectively, so we must continue reach out to these populations to ensure future success. Senior workers not ready for retirement will also increase by 28.8%. It’s critical for us to find ways to incorporate their skills and contributions, perhaps through the increased integration of technology and equipment that can decrease or altogether remove barriers dictated by physical strength and age.

The Time Is Now

While the looming labor shortage may have been delayed by the recent recession, it’s time now to put the plans in place to ensure our industry is prepared. More competition with higher paying occupations in healthcare and professional industries, as well as the higher age of skilled workers and their increased longevity in the workplace, mean we need to find workable solutions, even if we don’t all agree that the outlook is not quite so dire. It’s never been more important for us as an industry to change our view of our own workforces as well as those we partner with.

All data from the United States Department of Labor, Bureau of Labor Statistics: www.bls.gov/news.release/ecopro.htm

 

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Located in Louisville, Kentucky, Cardinal Integrated Systems specializes in warehouse planning, material handling, systems design & engineering, installation, project management, preventative maintenance and repair.
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