Executive Summary

The labor shortage in U.S. manufacturing is not the kind that fixes itself when the economy turns. Deloitte and The Manufacturing Institute estimate that 2.1 million manufacturing jobs could sit unfilled by 2030. What's behind that number isn't a soft hiring market — it's demographics. The people who run these plants are retiring, and there aren't enough workers coming up behind them to take their place.

For most OEM machine builders in packaging, food processing, and pharmaceutical manufacturing, the shortage shows up first at home, as your own hiring problem. Its real commercial weight, though, sits on the other side of the sale — with the customers who buy your machines.

Those customers are running short-handed. The operators and quality people they count on are aging out faster than anyone can replace them, and the open positions are starting to stay open. When a job can't be filled, the math on a plant floor changes. A machine used to be judged on speed and price. Now it's also judged on whether it takes a position off the board that nobody can hire for anyway, and that's a number that lands directly in the buying decision.

This paper lays out where the shortage comes from, how it reaches your customers' purchasing decisions, why it speeds up capital spending on automation, and what you can do now to be part of that conversation instead of watching it happen without you.

1. What Is Actually Happening

A Structural Shortage, Not a Cyclical One

For years, a labor shortage was something you waited out. Hiring got tight, you paid a little more or ran a little lean, and eventually the market loosened and the openings filled. That's not what's happening now.

This time the workforce is shrinking for reasons that don't turn around with the business cycle. The skilled people are getting old and retiring, and not enough younger workers went into the trades over the last thirty years to replace them. Those are slow-moving facts, and economic recovery doesn't undo them.

The Deloitte and Manufacturing Institute figure — 2.1 million unfilled jobs by 2030 — matters less for its size than for the fact that it doesn't blink. A shortage that holds through good years and bad forces a plant to rethink every job on the floor that depends on a person showing up.

Competing Demand for the Same Workers

It's getting harder from the outside, too. The trades that keep a plant — and a panel shop — running are already stretched thin. The country has about 818,700 electricians, and the Bureau of Labor Statistics expects demand to grow 9 percent through 2034, which works out to roughly 81,000 openings a year that somebody has to fill. At the same time, close to a third of the current electricians are at or near retirement, and about 20,000 leave the trade every year. The pipeline behind them isn't keeping pace.

And everyone is fishing the same water. Data centers, the power grid, and the wave of reshored production are all pulling hard on that pool. Data center construction alone is expected to need more than 300,000 additional electricians over the next decade, at wages an industrial shop has a hard time matching. Every one of those jobs competes with manufacturing plants — and with your own controls bench — for people who are already scarce.

The question is quietly changing. It used to be what a worker costs. More and more, it's whether you can find one at all.

2. Who Feels It — and How It Reaches OEM Procurement

The Shortage on Your Customer's Floor

Your customers feel this first at the jobs that were always hard to keep filled. Manual handling, end-of-line packing, palletizing, inspection — high-turnover work in the best of times. In a real shortage those turn into permanent holes. A line that needs a full crew to run at rate simply doesn't run at rate when you can't hire the crew.

This isn't theoretical. Food and packaging plants across the Pacific Northwest are already absorbing the cost of it, in missed shifts, slower lines, and a rotating cast of temps who bring their own quality and turnover problems.

The Cascade Effect

What matters for you is where that pressure goes, and it doesn't stay in HR. It moves into how the plant plans its capital. Teams that used to weigh a new machine on throughput and price now ask a second question: does this get us off a position we can't staff? A machine that clears even one or two impossible-to-fill jobs carries a value the old spreadsheet never captured, because it solves something money alone can't.

The builders who see this and can talk about it fluently will win specs that the ones still selling on cycle time won't.

The table below traces how that pressure moves from the labor market down to the plant floor and into machinery procurement.

3. How Labor Scarcity Changes Capital Decisions

From Cost Savings to Production Continuity

For a long time, automating a manual station was a labor-cost argument. The machine replaced so many hours at so many dollars, finance ran the payback, and that was the pitch. Framed that way, automation was just another payback project competing for money, and it usually lost to something more urgent.

Take away the ability to hire and the argument changes shape. When a position can't be filled at any wage, nobody's really asking how fast the machine pays back against labor. They're asking whether the line runs at all. “We can't staff this, and this machine keeps it running” lands very differently in an approval meeting than “this trims some labor cost.”

Why Permanent Scarcity Pulls Spending Forward

This is the part that matters most. When plants figured the shortage was temporary, they held off — why automate when you can just hire again next year? Once it's clear the people aren't coming back, waiting stops being a strategy. Work that was parked in the someday pile moves up, and the whole upgrade cycle pulls forward.

Projects that used to sit right on the might-pencil line now clear approval. Not because the machine got better, but because the alternative to buying it quietly went away.

4. Where the Pressure Lands on the Plant Floor

Manual Handling and End-of-Line

The obvious targets are the jobs plants already can't keep staffed: case packing and pack-out, palletizing, material handling. Highest turnover, longest-open requisitions — so they're the first place a plant looks to shed a dependence on labor it can't find. For you, they're also the easiest automation case to make, because the customer is living the problem every shift.

Quality and Inspection

Quality is the next one. When an inspection seat goes empty, the line slows to whatever staffing is left, and the odds of a defect getting through climb. Automated inspection turns a hard-to-fill human job into a machine function — a trade the customer's operations and quality people will both take.

The Maintenance Tradeoff

Here's the part worth being straight about. Automation doesn't make labor disappear; it changes which labor you need. A more automated line runs with fewer operators but leans harder on skilled maintenance and controls techs, and those people are caught in the exact same shortage. That's not a detail to bury at the bottom of a quote. It shapes how the machine ought to be built.

The machines that hold up are the ones that lighten a plant's dependence on scarce skilled labor instead of just moving it downstream — proven control architecture, real diagnostics, remote support, and serviceability designed in from the start rather than bolted on later. This is where the controls decisions actually decide the outcome. Clean Allen-Bradley architecture, diagnostics that tell a tech what's wrong, and panel work someone can actually open up and troubleshoot are what let a short-staffed plant keep an automated line running. A builder who can show a genuinely low maintenance burden is handing operations, maintenance, and finance something they all want at the same time.

The table below outlines the plant-floor functions where labor-driven capital decisions are most likely to shape OEM procurement criteria.

5. How to Get Ahead of It

None of this is a wait-and-see situation. The shortage is the environment now, and it opens a door into a conversation your customers are already having, with you or without you.

1. Understand Your Customers' Labor Exposure

Start by knowing which of their processes the shortage hits hardest. Which lines are running short, which jobs have gone unfilled the longest, what a missed shift actually costs them in output. That's the ground a real conversation stands on — a problem they can't solve on their own.

2. Map Your Product Lines to the Jobs They Remove

Walk your own catalog and mark, line by line, where a machine takes over work that's hard to staff and how many positions that is on the customer's floor. This isn't a labor study. It's knowing your equipment well enough to say plainly which hiring problems it makes go away.

3. Change How You Frame the Quote

Look at how your proposals read. A machine sold on labor savings competes as a payback project. The same machine sold as the answer to a job the customer can't fill is answering a problem instead. And build for the maintenance reality — spec the controls and diagnostics that let a thin crew keep the line up, so you're solving the labor problem rather than quietly handing it to the maintenance department.

4. Pick Partners Who Can Actually Deliver

Your integrator and panel shop are living the same shortage you and your customers are. Good panel builders are retiring and getting poached, and a controls partner without the people or the capacity to hit a schedule becomes the reason your own ship dates slip. Look for a UL-certified shop with real Allen-Bradley depth and enough capacity to take your overflow when the orders spike. Dual UL certification, AB fluency, documented quality, and room to build — that mix is rarer than it should be, and it's what lets you say yes to the work this market is throwing off without gambling a delivery date on a hire you can't count on.

6. Three Takeaways and Next Steps

The manufacturing labor shortage is a lasting change in the ground your customers stand on, not a rough patch to get through. For machine builders the effect is mostly indirect, but it's real, and the time to get positioned for it is now.

You'll feel the shortage first as your own hiring headache. Your customers are feeling it as something worse — a question of whether the line runs at all — and the cost of those empty positions is working its way straight into how they buy equipment. More and more, the machine that gets approved is the one that erases a job nobody can fill.

Because everyone now assumes the shortage is here to stay, the deliberation over automation spending is getting shorter. Projects that sat waiting on a hire that never showed up are moving. That's the opening.

The builders who win this stretch will be the ones who can tie their machines to the labor problem their customers actually have — and who can deliver without getting choked by the same shortage in their own controls and panel capacity. Being fluent in that conversation, with the capacity to back it up, sets you apart right now. Give it a couple of years and it will just be the price of admission.

References

[1] Deloitte and The Manufacturing Institute. Creating Pathways for Tomorrow's Workforce Today: Beyond Reskilling in Manufacturing. 2021. Projects that as many as 2.1 million U.S. manufacturing jobs could go unfilled by 2030. themanufacturinginstitute.org

[2] U.S. Bureau of Labor Statistics. Occupational Outlook Handbook: Electricians. 2024 data. 818,700 electricians employed (2024); employment projected to grow 9 percent from 2024 to 2034; about 81,000 openings projected each year, on average, over the decade. bls.gov/ooh/construction-and-extraction/electricians.htm

[3] BuildForce. The Electrician Shortage in 2026. Reports that roughly 20,000 workers leave the electrical trade each year and nearly 30 percent of the current workforce is at or near retirement, while data center construction alone could require more than 300,000 additional electricians over the coming decade. buildforce.com