A McKinsey & Company and World Economic Forum (WEF) report underscores the urgent need for manufacturing organisations to prioritise talent investment to address growing skill gaps and enhance workforce stability. The report highlights a significant disconnect between business ambitions and the frontline talent required to achieve them, revealing that by 2030, 54% of the advanced manufacturing workforce will need retraining.
The WEF's Putting Talent at the Centre: An Evolving Imperative for Manufacturing outlines how companies traditionally view talent as a cost rather than an investment, which hinders their ability to attract and retain skilled workers. "Many organisations still treat talent as a cost rather than an investment," notes Kiva Allgood, head of the Centre for Advanced Manufacturing at WEF. “This mindset must change if they are to thrive in an increasingly competitive landscape.”
Figure 1: Focus areas of upskilling and reskilling by share of companies
The report reveals that organisations with effective people strategies are 2.2 times more likely to outperform their peers, yet many struggle with high turnover rates and employee dissatisfaction. A McKinsey survey indicates that 41% of manufacturing employees are planning to leave their jobs within the next three to six months, underscoring the pressing need for improved workplace conditions and career development opportunities.
To combat these challenges, the WEF advocates for a new approach that includes viewing frontline workers as key drivers of stability and productivity. "Organisations that invest in their people will shape their own futures," explains Fernando Perez, senior partner at McKinsey. This involves creating a holistic workforce strategy that promotes internal mobility and invests in six core capabilities: work design and safety, talent planning, attraction and onboarding, talent development, talent effectiveness, and culture and experience.
The initiative launched a pilot program involving ten companies, which achieved a 52% improvement in stability metrics and a 34% increase in financial performance. These results demonstrate that tailored talent investments can lead to substantial operational gains.
As the manufacturing sector faces mounting pressures from technological advancements and changing workforce expectations, the WEF report serves as a clarion call for leaders to embrace talent investment as a strategic imperative. The future of manufacturing depends not just on technological innovation, but on the people who operate and drive these advancements.
