11th April, 2025
Australia’s manufacturing industry is at a turning point. With the sector contributing over $124 billion annually to the economy and employing nearly 875,000 people, its importance cannot be overstated.
However, a growing skills gap is placing significant pressure on businesses, threatening productivity, innovation, and long-term competitiveness. Projections indicate that the industry will need an additional 120,000 skilled workers by 2033 to keep pace with demand – yet many manufacturers are already struggling to fill critical roles.
For decades, manufacturing has been a pillar of economic stability, but shifting workforce dynamics are making it harder to maintain momentum. Several factors contribute to this shortage:
A large proportion of skilled tradespeople are approaching retirement, and with fewer younger workers entering the industry, there is a growing gap in expertise. The loss of experienced workers means valuable industry knowledge is disappearing faster than it can be replaced.
Despite an increasing need for technically skilled employees, investment in training programs hasn’t kept up. Many businesses struggle to provide apprenticeships or upskilling programs, leaving workers underprepared for the evolving demands of the industry.
Automation and digitalisation are reshaping the manufacturing landscape, requiring workers to have skills in robotics, data analytics, and smart factory operations. However, many workers lack the necessary training to adapt to these new requirements, making it harder to find the right talent.
Outdated views of manufacturing as a labor-intensive, low-tech industry have deterred young job seekers from considering careers in the sector. In reality, modern manufacturing is highly advanced, with cutting-edge technologies and opportunities for career growth, but these advantages are not widely recognised.
The consequences of this labour shortage are widespread:
To future-proof the industry, businesses must take proactive steps to train and upskill workers. Establishing apprenticeships and partnerships with technical schools ensures a steady pipeline of talent. Additionally, internal training programs focused on emerging technologies can help current employees develop the skills needed for modern manufacturing.
Providing opportunities for employees to adapt and expand their skill sets is essential. Programs that teach automation, data analytics, and digital manufacturing processes can ensure businesses are prepared for the future.
As experienced workers retire, structured mentorship programs can capture their expertise and pass it on to the next generation. Encouraging veteran employees to train junior staff ensures a smoother transition and preserves valuable industry knowledge.
While workforce development is crucial, technology also plays a key role in addressing labour shortages. Manufacturers who adopt smart technologies can increase efficiency, reduce reliance on manual labour, and optimise operations.
Enterprise Resource Planning (ERP) systems, such as MYOB Acumatica, provide manufacturers with real-time visibility, automation, and better workforce management. By centralising operations, ERP enables businesses to:
Beyond day-to-day improvements, ERP systems help manufacturers forecast demand, plan capacity, and allocate resources efficiently. By adopting cloud-based ERP solutions, businesses can scale their operations, improve workforce utilisation, and stay ahead of market changes.
The skills gap in manufacturing is a challenge, but it’s also an opportunity for businesses to rethink how they attract, train, and retain workers. By combining strategic workforce development with smart technology investments, manufacturers can build a more resilient, competitive, and innovative industry.
With the right tools and forward-thinking strategies, businesses can not only bridge the skills gap but thrive in an evolving industry landscape. MYOB Acumatica provides manufacturers with the flexibility, scalability, and automation capabilities needed to navigate these challenges and drive long-term success.
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