New research conducted by Visual Components has found that four out of ten organizations (39%) have reported revenue losses as a significant long-term effect of the labor shortage. This study focused on decision-makers in the U.S. manufacturing sector.
Mikko Urho, CEO of Visual Components, stated, “The labor shortage is a major factor in the escalating costs for U.S. manufacturers. Simulation software presents an opportunity to enhance the skills of existing staff and decrease dependence on costly skilled personnel from outside sources. This can enable factory floor employees to meet customer demands and revenue objectives in a persistently challenging economic environment.”
Key Findings
The research further revealed that increased labor costs (53%) are the primary short-term consequence, along with project delays (32%), inability to meet customer demand and production targets (34%), and declines in profit or revenue (27%).
In the face of a talent shortage, organizations have been compelled to allocate more of their strained budgets to new hires. A staggering 93% of U.S. businesses have had to delve deeper into company reserves to offer higher salaries to attract sought-after talent.
The necessity to offer higher salaries is only adding to the overall wage bill as overtime becomes essential to maintain productivity. Rising costs and inflation (58%) continue to exert additional pressure on budgets.
