Manufacturers continue to feel the weight of ongoing labor shortages, with 90% reporting direct impacts on production. Yet, while half (49%) of manufacturers plan to use technology and automation to help combat labor shortages, only 39% are currently doing so. This gap doesn’t just slow down production — it increases pressure on current employees, putting productivity and morale at risk.

“The labor shortage and growing skills gap is not something new for manufacturers”

HR Tech Insights: Businesses Cite ‘Monumental’ Losses When They Choose Wrong HR Software

These and other findings come from the new Quickbase research report, The State of Manufacturing 2025: Navigating Technological Changes, examining the manufacturing sector’s struggles with the labor shortage, skills gaps, and managing change due to these factors. Using responses from 536 manufacturing leaders in the U.S. and U.K., the report looks at the impacts to operations and productivity, especially as rising production costs and inflation and ongoing supply chain disruptions present an urgent need for technological transformation.

Labor shortages remain a top concern for manufacturers, with 89% of Quickbase survey respondents reporting negative shop floor efficiency impacts due to a dearth of available workers. Additionally, an aging workforce and inadequate knowledge transfer – aka, “brain drain” – are creating a skills gap; 41% of manufacturers struggle to pass on knowledge from experienced workers to new hire, slowing down operations. This is leading some companies to increase wages to attract skilled talent (57% report doing so) or hire less qualified staff and invest in on-the-job training (29%), both of can add costs to labor and prove unsustainable eventually.

HR Tech Insights: Why Prioritising Employee Health Will Attract More Success for Business?

Instead, manufacturers can take advantage of technology and automation to combat these challenges, creating operational stability and closing gaps. This is especially critical as labor shortages in the industry are expected to persist, with Deloitte estimating that 1.9 million manufacturing jobs will go unfilled over the next 10 years, heightening the need for talent upskilling, knowledge retention, and employee retention strategies.

Key areas where technology can make an impact include:

• Production efficiency through the application of real-time analytics and IoT sensors streamline processes.
• Quality management, using automated systems maintain production standards.
• Machine maintenance leveraging predictive analytics to reduces costly downtime.
• Safety gains by applying enhanced tools to mitigate risks, promote a safety culture, and ensure compliance.

“The labor shortage and growing skills gap is not something new for manufacturers,” said Josh Cranfill, GM Manufacturing for Quickbase. “What is new is both the urgency for change that these two factors have created, as well as the embrace of technology and automation to solve them. Technology can be a game-changer in improving the transfer of critical operational and industry knowledge, while providing advantages in training, production, efficiency, and safety. Change is here, and manufacturers have a once in a generation opportunity to seize the moment to meet today’s industry mandate while laying the groundwork to meet the talent, skills, and technology challenges to come.”