Investigating the effects of skills gap and skill shortages on the local manufacturing industry

Abstract

Purpose: The aim of this study is to analyse and determine the effects of skills gap and skill shortages on the local manufacturing industry and as such obtain a better understanding of the areas directly affected. Design: The methodology is of a positivist, quantitative nature, and consisted of a questionnaire purposely designed for this research as it delves into both descriptive and exploratory analysis. Findings: Results of this research revealed that ‘QQ3 - Strategic Recruitment Planning’ was the variable with the strongest significant positive relationship to the dependent variable ‘Organisational Performance related to Skilling’ (Beta value 0.413, sig .073). The items constituting this variable were related to responsibility of proper recruitment, adequate workforce planning affecting skilling decisions, the importance of matching skills and jobs. Recruitment strategies and the ability to map business objectives are also critical themes that emerged through the literature review as important attributes to this variable. The variable ‘Awareness of company skilling needs’ also showed a strong, highly significant positive relationship with the dependent variable, ‘Organisational Performance related to Skilling’ (Beta value 0.270, sig 0.036). The multiple items constituting this variable were qualification mismatch affecting individual firms and understanding company job roles affecting performance. The descriptive analysis in this research also revealed some interesting patterns, amongst which is that training of existing employees to take on hard-to-fill positions (56.5%) and collaborating with educational institutions (45%) were two of the most important recruiting strategies that local manufacturing firms are adopting as an effort to deal with their respective recruiting challenges. Conclusions: Several studies in the literature review bring to light the need for alignment between businesses, education and the labour market. A collective effort among educational institutions, business players and government agencies must identify these emerging trends in skills mismatches. Striking the right balance between over-education and under-education should mean a lot if the local manufacturing community wants to attain its desired level of competitive advantage in the global market. All this finally ties up to the central role of Strategic Talent Management, as it creates the ideal synergy between business strategic intent and talent requirements. This is crucial if local manufacturing firms want to incite a talented workforce that is aligned with company strategies, or vice versa. Value: It is predicted that this study will increase awareness on how local manufacturing firms are transmuting their short and long term decisions in order to mitigate the impact of these gaps. It also provides statistical evidence and recommendations on the factors which have a direct impact on operational performance related to skilling. Thus this research presents to local business players, leaders in the public and social sector with valuable information and insights on which to support their management and policy decisions.