In the digital age, semiconductor chips have been popping up all around us, from connected cars, to smart home lightbulbs, to robotic vacuum cleaners. In the past year, a perfect storm of factors – from COVID-induced disruptions to fragile supply chains, to geopolitical tensions – has sent demand for semiconductors surging far beyond current supply capacity. The resulting shortage, which was being felt as early as in the April jobs report, has been peaking in recent weeks. Facing a throughput time of three months or longer, many industries are waiting until supply and demand are back in sync.
If employers are to build the resilience needed to navigate – and thrive – in this tricky reality, they will need to start building more adaptive business strategies. Below, better understand the impact this could have on your workforce planning and how working with agile, experienced staffing partners can help.
Automotive sector is hardest hit
Although the impact is being felt across all verticals of the US economy, the automotive sector remains the hardest hit, with a ‘severe decline’ in automotive production – and employment. Automakers are hemorrhaging profits, with the sector expected to produce four million fewer cars this year than last. (This comes on the heels of a modest recovery in the industry after car sales fell off a cliff at the height of the pandemic last year.)
Many automotive manufacturers must reduce production. From a jobs perspective, employment in the sector continues to fall to way below 2020 levels, and employers are adopting a range of measures from extended summer shutdowns, to cutting out overtime, to reduced shift rotations.
This means that many find themselves needing new workforce solutions to navigate this tumultuous time and prepare themselves for when production cranks back up again.
Dearth of skilled engineering talent is compounding the impact
The talent shortfall in the semiconductor industry, and tech industry more generally, is nothing new. For years, American employers have battled with a lack of qualified engineering talent. Recently the problem has intensified as the electronics sector has grown. In fact, 30% of CEOs surveyed in KPMG’s Technology CEO Outlook identified a lack of talent as a top risk for the industry.
If the semiconductor crisis teaches us anything, it should be that – in this age of rapid digital transformation – employers should continually educate, train, and upskill existing workforces in key digital technologies, now and in the future.
Flexible staffing is key
A flexible staffing model is the core of the flexible, agile supply chains that companies need to cope with the relentless changes of today’s business landscape. Biden’s jobs plan is looming, wages keep rising, and COVID-19 cases continue to rise across America. Companies need to be ready to flex their production model to scale up and down as the market dictates.
At Adecco, we are working with our clients across multiple industries who are being impacted by the semiconductor shortage. While the manufacturers also struggle with a worker shortage and the automotive industry maps a new future, we partner with them to make sure they’ll have the right people lined up to deploy as soon as the shortage is resolved.
To meet every client challenge, we’ve gone a step further and partnered with Modis, a branch of The Adecco Group focused on technology and digital engineering consulting, talent services and skilling. This allows us to develop workforce and technology solutions on a global scale and for you to find the best candidates for your office, industrial and service sector positions.
So, as the U.S. economy continues its twists and turns amid surging demand and an ever-tighter jobs market, will your supply chain be staffed with the people it needs to thrive?
To learn more about how we can help you develop a flexible and resilient workforce that’s ready for whatever the future holds, learn more about our partnership with Modis. We’re experts in staffing and workforce solutions with global and local expertise that has helped thousands of companies just like yours thrive, even in times of uncertainty.