3 ways manufacturing companies can overcome talent scarcity.
To say the manufacturing industry is undergoing a period of unprecedented change would be an understatement. Technology seems to evolve faster than we can keep up with, and the promise of new technological efficiencies requires additional investments to implement and reap the benefits. Meanwhile, geopolitical tensions, economic uncertainty, supply chain disruptions and shifting consumer demands all impact day-to-day operations and future outlooks.
Through it all, companies continue to rely on their people to deliver on key priorities. But even talent management strategies have become more difficult to plan and put into action, from ensuring talent remain engaged and up to date on the latest advancements, to finding new talent to fill key skills gaps, despite persistent talent scarcity.
This scarcity is amplified by the rapid proliferation of AI and automation, leading to the creation of brand new roles requiring different skillsets. In response, employers must figure out how to ensure they have the right people: either by developing internal talent or finding new talent — both of which introduce their own share of challenges. Research shows that the global talent crisis for the manufacturing industry could cost the economy $1 trillion by 2030, with a projected 2.4 million positions potentially left unfilled by 2028.
In light of these challenges, what’s the best path forward? How can you access the right people with the right skills at a time when qualified talent is in short supply? And how can you build an adaptable workforce that can respond to immense change and contribute to successful outcomes?
AI transforms the manufacturing industry
To understand the questions facing the sector, Randstad Enterprise’s talent intelligence team aggregated and analyzed data about the manufacturing sector from sources like Deloitte, McKinsey and the World Economic Forum, as well as proprietary internal data. Combined with Randstad’s 2026 Workmonitor research, which includes the views of more than 26,000 workers and 1,225 employers around the globe, we gain a comprehensive picture of both the problem areas, but also where opportunities lie for manufacturing companies to reshape their talent strategies.
The findings also shed light on the trend currently having the biggest impact on the industry: the growing use of AI across every aspect of manufacturing. Every situation and use case for AI will have a real impact on your talent, from taking over tasks traditionally done by people to changing the nature of their jobs and the skills and training they need to do them. At the same time, finding new talent with the necessary skills in AI and automation is challenging as well, with employers across all sectors competing for talent with advanced technological know-how.
A Deloitte study found that 78% of manufacturing companies are already allocating more than 20% of their improvement budgets to smart manufacturing, with 85% believing these smart manufacturing initiatives will enhance production capabilities and improve competitive advantage. Many companies, however, are still figuring out how best to achieve AI maturity. Our research shows that 45% of companies have achieved mid-level maturity, with only 13% achieving a higher level, and 42% still in the early stages, mainly due to a shortage of the specialized technical talent needed to implement such projects.
Amid this backdrop, employers in the manufacturing sector find themselves at a crossroads. The efficiency gains of embracing AI cannot be denied — but neither can the challenges it introduces: finding skilled talent who can make their AI optimization dreams a reality.
3 keys to unlock hidden talent
Given the current reality of the talent landscape throughout the manufacturing industry, how can you mitigate these challenges and connect with right-fit talent? The key is to rethink the entire talent acquisition process, focusing on how people and technology work together, accounting for the skills people have or can learn and considering the different ways that people want to work.
1. Find the balance between people and AI.
AI and automation have significantly changed the way work is done and introduced plenty of improvements across all sectors. According to Randstad’s 2026 Workmonitor research, more than half of global employers (54%) report that AI has increased their companies’ productivity over the past year, with manufacturing employers slightly ahead at 57%.
Although this increasing reliance on automation has indeed made some job tasks obsolete, it has also forced many roles to change, requiring additional skills and know-how. For example, as traditional industrial roles rapidly merge with IT, industrial electrician roles are evolving into IT-hybrid positions that require skills in areas like PLC programming, networking and cybersecurity. Meanwhile, for maintenance mechanic roles, personnel are moving from basic reporting to predictive analytics, for which they use real-time data and digital twins to optimize production and prevent downtime.
As the industry continues to evolve, finding the right balance for how people can work with AI will be essential to success. This involves determining the tasks that technology can streamline and do more efficiently, and those that are best left to humans. We’re already seeing this in action with the growing use of robotics, as companies shift from hiring for manual labor, to securing talent who can manage integrated robotic systems.
This can require a complete reevaluation of all roles and rebuilding what those jobs look like. Putting in this due diligence can ensure you fully understand the tasks and roles that are most needed, instead of relying on the types of roles and skills that worked in the past. Part of the process should include creating a skills ontology to understand the skills you need, the strengths of the current team and where any gaps should be addressed.
2. Take a skills-based approach.
Compounding the challenge of talent scarcity is that the traditional hiring processes prioritize sector-relevant degrees, titles and certifications over the hard skills and potential that may be more predictive of success on the job. Instead, by focusing on a candidate’s skills and their capacity to learn new skills, you can unlock new sources of talent that you might not have otherwise considered, such as individuals from other sectors with cross-over skills.
According to the Workmonitor research, companies are already taking this view; 87% of manufacturing employers say their organizations value skills and experience over formal qualifications. Focusing on skills and potential is especially important when considering entry-level talent — another overlooked pool full of candidates who are eager to learn and grow on the job, despite lacking extensive experience. Yet, the Workmonitor research also shows that 81% of employers in the sector believe at least half of entry-level jobs will disappear in the next five years due to AI (ahead of the global average of 76%).
Neglecting this talent pool would be a mistake. Without a strong pipeline of emerging talent to learn from their more experienced colleagues and take on more advanced roles, talent scarcity will be further exacerbated over time. Less than a third of employers in the industry (31%) say they are reducing requirements and hiring junior talent to address talent scarcity. However, AI-driven tools and intuitive interfaces can lower the entry barrier for complex tasks, allowing junior staff to reach peak productivity faster while capturing veteran knowledge.
Another part of the skills-based approach is to ensure your teams continually learn and grow, while fueling internal mobility. A comprehensive learning and development strategy can help achieve that, while also retraining staff whose roles are at risk of being replaced. Our data shows that with production roles facing a 70–90% automation risk, nearly half of manufacturers (48%) plan to develop existing staff into higher-skilled, augmented roles. Doing so allows you to avoid costly layoffs and extensive external hiring, while filling new roles with people who already understand the business.
3. Consider a variety of work arrangements.
As companies across the industry struggle to find talent with the right skills, another way to unlock access to more candidates is by considering different types of workers. Rather than just hiring full-time employees, consider how part-time, temporary staff, contingent workers and contractors can be leveraged to fill those key gaps. This means you can connect with talent who have the needed skills faster, reduce labor costs and achieve greater operational agility.
Deloitte found that less than half of manufacturing companies are currently using this strategy, with 40% currently deploying contingent labor to supplement capabilities and 43% leveraging external vendor programs to bridge critical skills gaps.
When you open up roles to different types of workers, you can meet talent where they are. Today more than ever, workers demand greater flexibility over when and how they work. This is illustrated by the Workmonitor research, revealing that only 29% of the global workforce agree that a single full-time job is their preferred working arrangement. Other preferred arrangements include a full-time role plus a side hustle or additional hours (18%), self-employment (11%), part-time roles (11%) and part-time roles with a side hustle (10%).
By evaluating the tasks that need to be done and the types of employment you offer, you can access skilled talent who aren’t looking for a traditional role, but may be overlooked by typical recruitment methods. With 72% of sector employers saying that the traditional linear career path, characterized by having one career at one company with regular promotions, is outdated, embracing different worker types to fill key gaps faster is a true competitive advantage.
Offering a variety of work options to find key talent doesn’t just expand the talent pool; it gives talent the flexibility and autonomy they want, whether they’re looking to gain new skills, supplement their income or test out a different career path. In any case, considering these different work arrangements can also increase engagement and retention, helping to avoid the costs, efforts and loss of productivity that turnover can cause.
build an agile and sustainable workforce
As a changing world requires manufacturing companies to adapt their talent strategies in response, finding ways to overcome talent scarcity should be a top priority. A successful strategy starts with understanding how AI augments work and the new types of skills and roles needed to maximize its operational impact. Then determine which team member has the skills you need, who shows potential to learn those skills and when it’s best to seek external talent — all while delivering the work experiences that people demand. Doing so can unlock your access to the right people, helping to create an agile and sustainable workforce in the face of immense change.