The Midwest is a manufacturing powerhouse, with states like Minnesota, Wisconsin, Indiana, Illinois, and Michigan showing higher manufacturing employment than the national average. This sector generates $2.64 for every dollar spent in manufacturing and supports 4.8 additional jobs for every manufacturing worker.

However, the metal fabrication industry in the Midwest continues to face a critical challenge: the persistent labor shortage. This has become a growing national concern with significant economic implications and, with the current administration's focus on domestic production growth, tariff policy changes, this trend is likely to continue.

This blogs explores the causes of this shortage and outlines practical strategies, from smart design and advanced automation to effective hiring and retention, to help your business thrive.

The Labor Shortage: What's Happening and Why

The U.S. manufacturing industry continues to struggle with talent. In the second quarter of 2025, over 48% of manufacturers cited attracting and retaining employees as their top business challenge. Projections indicate that of the 3.8 million manufacturing jobs needed over the next decade, 2.1 million could go unfilled. This skills gap could cost the U.S. economy $1 trillion by 2030.

The Midwest is particularly affected. States like Wisconsin face a 75.70% manufacturing job deficit. This shortage leads to reduced production, higher costs, and frequent delays, with 45% of manufacturers reporting weekly production delays.

Key Causes:

Aging Workforce: Over 25% of the manufacturing workforce in major economies is over 55, leading to a significant loss of expertise as experienced workers retire.
Skills Gap: Modern manufacturing demands specialized skills, but the current educational system struggles to meet demand.
High Turnover: Manufacturing sees high turnover rates, sometimes exceeding 40% annually. Replacing a skilled worker can cost $20,000 to $40,000.
Economic Shifts & Rural Migration: Economic disruptions and the shifting job preferences of younger, educated individuals from rural areas further deplete the labor pool in manufacturing hubs.

These factors create a cycle: labor shortages hinder technology adoption, which keeps jobs less appealing, making it harder to attract new talent.

Strategic Solutions for Midwest Manufacturers

Navigating this landscape requires a multi-pronged approach.

1. Design Smarter with Design for Manufacturing (DFM)

Optimizing product design is a powerful strategy. Design for Manufacturing (DFM) focuses on increasing manufacturing efficiency and reducing costs without compromising quality.

HPM's team of 5 full-time engineers specializes in DFM. We work with clients early in the design process to optimize parts for manufacturability, remove unnecessary costs, ensure product integrity, and shorten development time.

How DFM Helps:

Simplifies Designs: Reduces part count and standardizes components, streamlining production.
Minimizes Secondary Operations: Designs can reduce or eliminate post-processing steps that often require manual labor.
Optimizes for Automation: Designs optimized for production allow automated systems to work more consistently and precisely, reducing rework.

By simplifying designs, HPM helps clients maximize output and quality from their existing workforce and optimizing processes.

2. Embrace Automation Where It Matters

Automation is a strategic necessity for Midwest manufacturers. It frees human workers from repetitive tasks, allowing them to focus on higher-value roles. Implementing automation directly addresses the labor shortage by compensating for fewer available workers, boosting overall output, and making manufacturing jobs more appealing to a modern, tech-savvy workforce.

Key Technologies:

Advanced Laser Cutting: Laser cutting offers precision, speed, and efficiency, reducing costs and enhancing safety.
Robotic Welding, Punching, & Forming: Robots and automation technology deliver consistent quality at a faster pace, reduce waste, and improve workplace safety by handling hazardous tasks.
Intelligent Automation & AI: AI-powered inspection and vision systems identify defects human inspectors might miss, increasing accuracy and speeding up quality control. Digital twin technology simulates production to minimize errors.
Automated Storage & Retrieval Systems (ASRS): ASRS reduce manual labor in warehouses by bringing goods directly to workers, improving ergonomics, preventing errors, and boosting productivity.

3. Rethink Hiring and Retention

Addressing the manufacturing skills gap requires more than just recruitment. It demands a proactive and sustained commitment to workforce development that attracts new talent and keeps existing employees engaged. By modernizing recruitment strategies and investing in employee growth, manufacturers can build a stable, skilled workforce that mitigates the impact of labor shortages.

Invest in Training: Prioritize continuous learning, including technical and soft skills. Cross-training programs broaden employee skill sets, enhancing operational resilience.
Leverage Partnerships & Apprenticeships: Collaborate with trade schools and community colleges to build a talent pipeline. Apprenticeship programs offer hands-on learning and high employment rates (sometimes as much as 90% upon graduation).
Proactive Talent Attraction: Modernize manufacturing's image by highlighting technology and career advancement. Streamline hiring processes, as 60% of job seekers abandon long applications. Use social media (73% of 18-34 year olds find jobs there) and employee referral programs.

4. Foster a Culture of Retention and Engagement

Retaining talent is the most important part for sustained success. Beyond competitive pay and benefits, cultivating a positive, safe, and transparent work environment is key for keeping skilled workers. An engaged workforce is more productive, innovative, and less likely to leave, directly addressing the high turnover rates exacerbated by the labor shortage.

Competitive Compensation: Offer competitive base salaries, performance bonuses, and robust benefits like health insurance, PTO, and 401(k) with employer matching (averaging 4.3%). Tuition reimbursement is also valued.
Work-Life Balance: Flexible scheduling options, like compressed workweeks, improve employee satisfaction and reduce turnover.
Positive Work Environment: Prioritize safety (manufacturing is a high-injury sector) , foster open communication, and empower employees. Recognition and a clean, organized workspace boost morale.
Process Standardization: Standardized processes ensure consistency, reduce errors, and simplify onboarding, enhancing efficiency and resilience.

The Way Forward for Midwest Fabricators

The labor shortage is a significant challenge, but it's also an opportunity for transformation. By strategically investing in advanced automation, embracing Design for Manufacturing, developing a future-ready workforce, and fostering a culture of retention, Midwest manufacturers can build resilience and ensure continued leadership in the global market.

Herold Precision Metals is built on a "Quality Heritage" of accuracy, quality, and consistency. We provide precision at scale, ensuring high quality and high quantity. By partnering with us, you gain an extension of your team that helps troubleshoot, innovate, and grow your business, directly addressing the impacts of the labor shortage on your operations.

Ready to strengthen your production capacity? Request a quote with your needs today.

Navigating the Labor Shortage in Metal Fabrication: Strategies for Midwest Manufacturers