How Tacit Knowledge Can Fix the U.S. Labor Shortage in Manufacturing

The U.S. manufacturing industry is under pressure. The skilled labor shortage intensifies, with companies struggling with production delays, rising costs, and a growing innovation bottleneck.

"We are in the early stages of the largest retirement-driven, workforce turnover in our nation's history" 

Jason Fichtner, Alliance for Lifetime Income's Retirement Income Institute, 2024

This month, a report from Deloitte and the Manufacturing Institute claims that manufacturers could need as many as 3.8 million new workers by 2033. Roughly 1.9 million of these roles could go unfilled if current labor gaps remain unsolved.

But why is this happening, and what solutions are available? This article explores the causes of the labor shortage, its impact on the manufacturing industry, and why the combination of technology and human intelligence might hold the key to overcoming this crisis.

What is driving the skilled labor shortage?

1. Demographic shift

When looking at the U.S., a significant portion of the population is aging. Many skilled workers in the manufacturing sector will retire in the coming years, and there aren’t enough young professionals to fill their positions. According to current studies, about 3 million skilled workers will be lacking by 2030. And if this weren’t enough, Gen Z and Millennial workers are more likely to switch jobs than previous generations (Deloitte).

 2. Education system lagging behind

While the industry becomes increasingly digital, the education system seems unable to keep pace. Schools and training institutions often fail to adequately prepare young people for the technical demands of modern manufacturing processes. Moreover, companies frequently lack the resources to offer further training to keep their workforce up to date.

The consequences for U.S. manufacturing companies

The skilled labor shortage has significant repercussions for the U.S. economy. Companies report the following challenges:

• Production delays: When machines break down or processes stall, experts are often missing to provide quick solutions.
• Rising costs: Competition for skilled workers drives up wages while efficiency losses grow.
• Innovation bottleneck: Without experienced professionals, new technologies are introduced more slowly, weakening competitiveness.

The situation is serious, but there is hope – and it lies in leveraging technology.Why tacit knowledge is so valuable

A term often overlooked in this discussion is tacit knowledge. This is the expertise employees acquire throughout their careers – through experiences, mistakes, and successes. It is rarely documented in manuals or databases, but it is crucial for a company’s success.

When knowledge is lost

When an employee leaves a company, they often take their tacit knowledge with them. This can be catastrophic for businesses. It takes months to onboard new hires, and processes often need to be rebuilt from scratch.

The challenge of knowledge transfer

Many companies rely on traditional knowledge management tools, but these are often insufficient. While they capture data, they cannot replicate the problem-solving skills or intuition of an experienced employee. This is where technology comes into play.

"Tacit knowledge is personal, context-specific, and therefore hard to formalize and communicate" 

Ikujiro Nonaka, Forbes, 2024

Starmind: The connection between technology and human intelligence

One of the greatest challenges in addressing the skilled labor shortage is the loss of knowledge when employees leave. Traditional knowledge management tools often fail to proactively secure and make this knowledge accessible. This is where the Starmind comes in. 

Starmind connects your people to the trusted expertise they need but can’t always find. It identifies who knows what across your organization and delivers those hard-earned insights instantly, inside the tools your teams already use. So you stop guessing, and start executing with the human intelligence GenAI can’t provide.

How Starmind identifies and uses knowledge

Starmind goes beyond conventional Q&A systems by dynamically building and maintaining a living map of knowledge within the company. Here’s how it works:

1. Expertise recognition:

• Our Knowledge Engine “learns” which employees are experts in specific fields. It learns from how people collaborate inside of every day tools, such as SharePoint, Microsoft Teams, or Slack.
• This automated expertise recognition creates an accurate map of the company’s internal knowledge landscape.

2. Automatic updates:

• Knowledge within companies is never static. The Starmind Knowledge Engine is automatically updated as employees acquire new skills, complete projects, or explore new topics.
• This keeps the system consistently current, reflecting the company’s latest expertise.

3. Linking and contextualizing:

• Starmind not only connects people with knowledge but also places this information in context. When a specific issue arises, it identifies not just the right expert but also relevant information, past solutions, or best practices.

Preserving knowledge – even during employee transitions

One of Starmind’s greatest strengths is its ability to secure knowledge over the long term. When an employee leaves, their knowledge does not disappear. Instead, it is retained within the our Knowledge Suite and can be accessed by others.

• Effective succession planning: Even if an expert is no longer available, Starmind identifies the next best point of contact based on their proximity to the topic and experience.
• Protection against knowledge Loss: Critical information that often resides only in employees’ minds is safeguarded through continuous networking and analysis.

Dynamic adaptation to organizational changes

Starmind is flexible and adapts to changes within an organization. New employees, projects, or technologies are automatically integrated into the system, ensuring that the company always has an up-to-date and comprehensive view of its knowledge.

Security and efficiency: The perfect combination for the manufacturing industry

Starmind offers companies not just a powerful tool to address the skilled labor shortage but also the assurance that their data is processed securely and in compliance with GDPR. As a Swiss company with a strong focus on security and privacy, Starmind is suited to the needs of manufacturing firms. It combines technological innovation with the highest standards of data protection – a winning formula for a sustainable future.

By Rosie Perkins, Felix Mitrovics