Asset Performance Management
Closing the Aging Workforce Gap
White Paper
Asset Performance Management: Closing the Aging Workforce Gap
As the baby boomer generation ages and subsequently retires, skilled labor gaps are popping up across
the globe. The experience and knowledge leaving with these retired professionals is creating an industrial
vulnerability that impacts productivity, safety and profits. The problem is only compounded when the assets
themselves begin to age.
The retirement of skilled baby boomers will create a workforce shortage of
10 million additional workers by 20201.
Global population trends predict decades of impact as the over-sixty annual growth rate peaks in 2025, and
sustains a gap for decades afterwards. This is not a theoretical threat but one the industry should already
be addressing. The most difficult jobs to staff are those that have the largest impact on productivity. With
80% of manufacturers reporting a shortage of qualified applicants for skilled production positions, the
consequences of this skills gap are significant. In fact, the total cost of skills shortages has been reported
as much as 11% of net earnings3.
The aging workforce will impact skilled labor for decades if not mitigated by better
knowledge transfer and analytic solutions2.
Your Operational Intelligence Is Retiring
The skilled labor gap, or brain drain, has an immediate and long-term impact on any organizations
ability to reach optimum productivity levels. Those retiring are the people that understand how
equipment works, when it is going to fail and how to prevent it, when it needs help and attention, and
how to respond when something goes wrong.
This unique intelligence about how the plant operates and how it is maintained is at risk of being lost.
And if lost en masse, negative consequences will ensue, including:
Workforce expenses To maintain experienced oversight of production, plants will incur over
time costs while younger, less practiced employees are being trained.
http://blog.industrysoftware.automation.siemens.com/blog/tag/global-aging-workforce/
http://www.un.org/esa/population/publications/worldageing19502050/pdf/80chapterii.pdf
Asset Performance Management: Closing the Aging Workforce Gap
The skilled labor gap is growing faster than new employees can be recruited and trained.
For example in the mining industry a survey by Schlumberger Business Consulting finds
that 22,000 experienced geoscientists and engineers will leave the field by 2015.
Safety concerns When staff are new to their roles, they may miss subtle signals that equipment
needs attention. If or when disaster strikes, they dont have the experience upon which to respond
in an optimal manner.
Lost productivity Inexperienced staff can slow production and take longer to recover from
system failures. In fact, nearly two-thirds of manufacturers report at least a 5% increase in
production downtime and production cycle time as a result of a skills gap3.
More than 70% of manufacturers report at least a 5% increase in overtime costs and
nearly one-third report a greater than 10% increase in overtime costs3.
Shutting Down the Brain Drain
Despite significant risk, there is good news. With careful planning, you can mitigate consequences of the
skills gap can be mitigated by stemming the tide of lost knowledge.
Entice younger workers by digitizing and automating.
Millennial workers want to engage careers that are technologically advanced and secure long-
term earning potential. By automating and building a strong digital foundation, industrial
environments can be very attractive. Combined with solid training programs that reach out to
talented young professionals, organizations can lessen the impact of retiring employees.
Preserve critical information before its lost.
In a structured fashion, document the knowledge resident in the minds of your aging workforce
through the use of tools that record, verify and update best practices, workflows, and strategies.
Improve collaboration.
By better integrating information and communication across sites and facilities, your less
experienced staff can tap into the resources of seasoned workers and documented knowledge
even when geographically dispersed.
Give data a voice.
Using technology to consolidate and analyze big data and best practices from across the
enterprise, you can replace the in their head knowledge of retiring professionals.
Crew turn over was a contributing factor in the 2010 Deepwater Horizon disaster that
killed 11 men and spewed 210 million gallons of oil into the Gulf of Mexico4.
2014 Manufacturing Skills & Training Study published by The Manufacturing Institute
http://www.npr.org/2012/04/20/150871935/as-workers-age-oil-industry-braces-for-skills-gap
Asset Performance Management: Closing the Aging Workforce Gap
Meridium Can Help
By leveraging Meridiums leading Asset Performance Management (APM) solution you can reduce
the risk associated with an aging workforce with confidence. Meridium will improve accessibility,
standardization and communications between departments and sites, helping even the newest staff
members to achieve financial, operational and production objectives. APM combines structured
processes and analytics in order to identify critical assets and failure modes, calculate equipment
reliability and determine downtime impacts; in turn, that drives insights that enable operational
excellence.
About Meridium
Meridium is the global leader in asset performance management (APM) software and services for assetintensive industries. Meridium increases the availability of assets, improves safety, optimizes cost and lowers
risk for our global clients in more than 80 countries with more than 1,200 licensed sites around the world.
Through our unique software developed in collaboration with our clients, we predict and prevent asset failures
with intelligent asset strategies. Founded in 1993 and headquartered in Roanoke, VA (USA), with offices
around the world, Meridium is the pioneer of APM and continues to drive innovation, leveraging the data
from sensors, devices, systems and smart equipment to minimize unplanned events, incidents and downtime.
Copyright 2015 All rights reserved
Asset Performance Management: Closing the Aging Workforce Gap
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