Manufacturing’s talent shortage in the age of automation 

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As robots and automation transform the modern factory floor, manufacturers are facing a growing labour challenge. Machines can increase productivity and reduce human error, but they also demand new skills that many workforces do not currently possess. This shift is creating a manufacturing talent shortage that impacts efficiency, operational costs, project delivery, and long-term workforce planning.

As manufacturers grapple with a chronic shortage of skilled labour, many are turning to external partners and service-based models to fill critical gaps. While automation plays a key role, flexible workforce solutions—such as outsourced services and leveraging contingent talent—are becoming essential to maintain productivity and competitiveness. Strategic MSPs, offering AI-enabled labour planning and predictive workforce analytics, help companies maintain operational continuity while bridging critical talent gaps.

Automation is widening skills gaps in manufacturing

Automation is no longer a future concept. It is a current reality for small and medium sized businesses as well as global manufacturing operations. Smart systems, robotics, and real-time data applications require workers who can manage complex technologies, interpret data, and maintain machinery. However, these skills are in short supply.

Several factors are driving this talent shortage:

  • Retiring employees are leaving gaps in institutional knowledge

  • Younger workers are choosing careers in other industries

  • Digital transformation is outpacing the rate of workforce training

  • Many companies lack the tools to execute effective reskilling programmes

The result is a wide range of skills gaps across production lines, maintenance roles, and technical project management functions. Manufacturers must gain visibility into where these gaps exist—and use real-time insights to guide upskilling, hiring, or external sourcing.

How MSPs help close the manufacturing talent gap

To remain competitive, manufacturing companies need cost-effective ways to access qualified talent. Traditional hiring models are too slow and inflexible for today’s demands. Instead, many organisations are turning to Managed Service Providers (MSPs) to integrate more of contingent talent into their workforce strategies.

The key benefits of this approach include:

  • Gaining real-time visibility into talent availability

  • Scaling labour resources quickly without increasing permanent headcount

  • Aligning hiring with defined scope of work and project goals

  • Improving service level agreements and delivery timelines

  • Maintaining compliance with master services agreements and final contract terms

A Managed Service Provider (MSP) acts as a strategic partner, helping manufacturing companies manage their contingent workforce and reduce complexity across talent operations. MSPs help manufacturers improve hiring speed, lower costs, and manage supplier performance with accountability. MSPs support businesses of all sizes in delivering consistent results through scalable service delivery, regardless of their operational scale.

Pontoon’s MSP integrates direct sourcing, real-time analytics, and access to a wide range of global suppliers. Predictive dashboards and performance data help identify talent bottlenecks, optimise workforce mix, and track supplier delivery trends. This approach not only fills roles faster but also ensures alignment with service level agreements (SLAs) and master services agreements (MSAs)—critical for maintaining operational efficiency.

How SOW-based resources are adding value

With rising demand for precision and accountability in labour sourcing, organisations across industries—including manufacturing—are embracing services procurement to gain a competitive edge.

In today’s evolving business landscape, services procurement has become a strategic lever for controlling costs, improving compliance, gaining spend visibility, and optimising external workforce operations.. By using Statements of Work (SOWs) to define project deliverables, timelines, and outcomes, manufacturers can measure success by results—not hours worked. This shift from input-based to outcome-based work allows for smarter workforce investment and clearer accountability. Explore our Services Procurement (SOW) solutions or download our Service Procurement Guide to learn the specifics of services procurement, where it differs from staff augmentation—and how it can improve delivery, boost compliance, and enhance results. 

Final takeaways: Future-proofing your workforce

Manufacturing labour future depends on smart planning and adaptable solutions. The talent shortage is real, but with the right combination of managed service providers, statement of work contracts, and performance-based strategies, companies can close the gap reduce workforce spend, and scale operations efficiently. These tools do more than fill roles. They ensure efficiency, optimise service offerings, and position manufacturing leaders for long-term success. By partnering with an MSP, manufacturers can close the skills gap, reduce costs, and stay competitive in a rapidly evolving industry. Advanced analytics, real-time workforce visibility, and AI-supported sourcing decisions are essential components of a future-ready strategy. 

The shift toward automation requires a new mindset for workforce strategy. Manufacturers must think beyond full-time employees and consider flexible, project-based labour models. MSPs offer the visibility and agility needed to adapt in real time, align labour with scope of work, and protect operations from disruption.

FAQ: Contingent Workforce in manufacturing

What is causing the manufacturing talent shortage?

A combination of retirements, evolving technical demands, and a shrinking interest in industrial careers.

How do MSPs address this skills gap?

By managing a network of suppliers and talent pools, enforcing SLAs, and using performance-driven SOWs to ensure the right expertise is available on-demand.

How is this relevant to Small and Medium Businesses (SMBs)?

MSPs aren’t just for enterprises. Modular solutions now offer small and medium-sized businesses access to the same efficiency and scalability.

How does Pontoon deliver value?

Through global reach, direct sourcing, compliance expertise, and data-backed workforce insights—all aligned to your business and automation strategy.