A decade ago, McKinsey predicted that the Internet of Things would be worth $11 trillion annually by this year, driving enormous reductions in downtime and industrial maintenance costs. Six years later, however, the firm sharply lowered its forecast, warning that talent shortages were holding back the sector’s growth.
Today, the industrial IoT revolution remains underway, but talent shortages remain a major challenge. Researchers say that almost 2 million new manufacturing jobs will go unfilled by 2033, and 40% of advanced manufacturers say skills shortages are holding back their industry. Even in the face of current economic turbulence, one-fifth of manufacturers say skills shortages remain their biggest single challenge.
With IoT projects 20% more likely to fail when companies lack skilled workers, this is an existential problem for industrial organizations. On the one hand, labor shortages mean we’ll need IIoT more than ever to optimize for resilience and productivity. On the other, the transition to IIoT demands new skills, potentially exacerbating talent shortages and constraining IIoT adoption.
Understanding the skills gap
To overcome the skills gap, we must first acknowledge that IoT places important new demands on modern manufacturers. After all, IoT represents the convergence of many different disciplines—from hardware and software, to connectivity, data management, cybersecurity, analytics, and more.
To leverage IoT effectively, manufacturers need “Swiss Army knife” workers capable of confidently navigating all these different areas. They must be empowered with access to contextual guidance in the flow of work, so they can solve problems quickly and consistently—without waiting on specialized support.
That doesn’t just apply to engineers—it applies to frontline teams, too. To thrive, technicians and machine operators must work effectively alongside smart equipment and cobots; diagnose issues in connected systems; and interpret sensor data and analytics dashboards in real time.
They must also learn to recognize vulnerabilities in connected industrial systems, and anticipate the ways that changes in a single area can impact the entire connected operation.
Building those capabilities isn’t easy, in part because manufacturing now increasingly competes with other sectors—including tech giants—for skilled talent. It’s especially tough for smaller manufacturers, who have been slow to adopt IIoT in part because they lack the resources for recruitment and training.
Evolving the workforce
This makes it mission-critical that manufacturers evolve their workforce, and secure reliable access to the skills needed to unlock IIoT’s full potential. Here are 4 key strategies every organization should deploy:
Get creative about recruitment
Manufacturers need to find their place within regional talent ecosystems. Local colleges and trade schools are an obvious place to look for skilled workers, but there are other options: one flooring manufacturer recently hired over 50 new workers after partnering with local high schools on work-based learning programs, for instance.
At the same time, it’s important to evolve the narrative around industrial careers. Today’s connected factories offer opportunities to work with cutting-edge technologies, solve meaningful problems, and build skills that transfer across industries.
Frame and build your manufacturing operations as forward-looking, tech-enabled, and transformative career paths. Dispelling the myth around manufacturing being just a blue collar, 3D (dirty, dull, & dangerous) job can help attract the next generation of builders, thinkers, and problem-solvers.
Invest in existing workers
In addition to hiring IoT-ready workers, manufacturers will need to upskill existing teams, and integrate on-the-job training into frontline employees’ daily workflows. Digitizing standard operating procedures (SOPs) and converting institutional knowledge into mobile-accessible formats ensures that critical insights are preserved and available anytime, anywhere.
Using AI co-pilots to support real-time learning can help to preserve and transmit institutional knowledge, while also ensuring that veteran employees are able to adapt to the changing needs of a new era.
Importantly, by prioritizing upskilling industrial leaders can also help to boost retention. Today’s workers want to learn and grow, and find meaningful advancement opportunities. Real-time coaching and context-sensitive guidance can help frontline workers gain confidence in new technologies without interrupting production workflows, reducing downtime and frustration.
By helping teams acquire the skills and core competency roadmaps needed to succeed in the factory of the future, employers can boost job satisfaction and increase the likelihood that skilled workers will stick around in years to come.
Use IoT to drive efficiency
Mitigating skills shortages starts with IoT procurement: organizations choosing connected tools based partly on their ease of adoption. It’s also important to select IIoT tools that balance automation and augmentation, helping workers to do more with less, and saving them time that can be reinvested in work requiring creativity and human judgement.
One German manufacturer, for instance, gave maintenance crews access to IoT data, enabling them to check malfunctions remotely. Now, before going to a worksite, crews can determine what’s wrong and source the exact parts or tools they need, saving them time (and reducing downtime for their employer) even in the face of labor shortages.
Integrating Total Productive Maintenance programs provides training and autonomy for operators to participate in asset performance optimization and problem solving.
The most successful IoT implementations prioritize user experience at every level, especially on the shop floor. By removing friction from everyday tasks and giving workers real-time visibility into operations, manufacturers can turn efficiency gains into real productivity gains.
Upgrade your learning processes
Advanced technologies can open the door to new kinds of skill acquisition and continuous improvement.
Some manufacturers are already using IIoT and augmented reality to guide maintenance professionals during complex procedures, effectively “lending” workers the expertise needed for a given task. Other organizations use micro-lessons and gamification to make learning frictionless, engaging, and rewarding rather than intimidating and boring.
Context-aware learning tools that provide just-in-time support empower workers to troubleshoot, follow SOPs, or escalate issues with confidence. These tools are especially valuable for new hires or reskilled employees navigating unfamiliar processes.
New AI technologies will play a key role in this process, redistributing knowledge from retiring workers to new employees, and delivering contextually aware guidance exactly when it’s most needed.
With predictive systems transforming maintenance workflows, businesses have an important opportunity to integrate data and human insights to elevate performance—and unlock human potential—across their operations.
Overcoming the skills gap
The IoT skills gap is real, but the same technologies creating this challenge can help solve it. Smart factories urgently need skilled workers, but AI and connected technologies can support both the recruitment of talented workers, and the upskilling and retention of existing workers.
Companies that embrace this transition are seeing positive results. When Spanish manufacturer Campofrio rebuilt its flagship factory as an IIoT-enabled facility, workers leaned in to acquire the new skills they needed.
“We transformed from an old-fashioned hierarchy where everyone had a siloed job to a more interactive culture,” CIO Javier Alvarez said. “In exchange for retaining jobs in a new state-of-the-art facility, we asked our employees to take advantage of training, and refresh and stretch their talents.”
Manufacturers need to bring that same “growth mindset” to their operations in order to build future-ready workforces. By using technology to support rather than replace workers, companies can meet their immediate labor needs—while building a skilled, resilient, and IoT-ready workforce that’s fully prepared for the future of manufacturing.
And by removing friction, digitizing know-how, and enabling smarter workflows, they can transform workforce challenges into opportunities for lasting operational advantage.