For the past few years, the topic of the microchip shortage dominated media headlines and planning meetings for all stakeholders within the semiconductor supply chain. Now, another shortage is creating obstacles on the path to equilibrium in the supply chain: talent.

Emerging from a stressful pandemic work environment exacerbated by the chaos of the chip shortage, many supply chain professionals and managers are retiring early — leaving job vacancies open as companies search for the skilled talent to fill the gaps.

While headlines claim that the chip shortage is over, the impact is still being felt in many industries. Some components have lead times of 50-60 weeks, and in extreme cases, up to two years. Now, contrast, parts of the industry are in an oversupply, where companies ordered massive quantities to protect themselves, only for demand to fall. The situation demonstrates that many organizations lack the infrastructure, knowledge or preparation to manage the impacts of semiconductor supply and demand imbalances. 

Deloitte recently predicted that by 2030, more than one million skilled workers will be needed globally to meet demand in the semiconductor industry. That figure continues to grow yearly, with the number of college graduates entering related fields being significantly less than the job openings available. Beyond supply chain managers and buyers, skilled tradespeople are needed to build and maintain new plants; software and hardware engineers are needed to design the chips themselves; and structural engineers and contractors are needed to build the buildings. 

Simultaneously, fatigue from the chip shortage and the continued pandemic propelled many senior leaders to leave the industry for something less stressful or, in many cases, early retirement. It’s common to see turnover after a shortage, but according to data from LinkedIn, in 2021, supply chain and procurement managers quit their jobs at the highest rates in years. 

When an industry experiences a mass exodus of professionals, especially in leadership and executive roles, there’s a knowledge drain that comes with it. Some companies throughout the industry are experiencing this, especially those that were unprepared for the shortage. For some, when equipment is broken or malfunctioning, they lack the people with the knowledge or skills to repair it. Often, technology equipment is kept running with quick fixes. Doing so, however, often limits the knowledge of how to  maintain the equipment to those with the experience of fixing it. Twitter, for example, has had numerous outages from the loss of knowledge due to multiple rounds of layoffs.  Not only is that knowledge gone when those people leave, but the continued impact of the shortage makes replacing the technology even more expensive.

There are some key ways to ensure that your company can upskill staff to fill your talent gap, while preparing your team to be ready for the next inevitable shortage. To reduce the loss of legacy knowledge with the departure of seasoned supply chain leaders, create training and mentorship programs that provide opportunities for sharing institutionalized information. 

Mentorship programs create an environment where more seasoned supply chain professionals continuously share their expertise with junior staff, which helps prevent “brain drain” and ensures business continuity. Additionally, such programs provide a transparent look at the growth path through your organization, helping young people stay motivated to take on more experience and responsibility within the company.

Learning and development programs encourage growth and increase employee skill sets. They give employees the opportunity to learn about best practices in critical business areas, such as quality control, and can be expanded to softer skills like conflict resolution or formalized training for those entering leadership positions. Additional development programs can include education on industry certifications, meeting increasing customer demands regarding security, and updates on newly expanded technologies like artificial intelligence.

Additionally, partnering with universities can help develop a pipeline of talent with the knowledge and skills to take on the engineering and supply chain management roles of the future. Some colleges have already created majors more specific to the semiconductor supply chain, and as the U.S. works to increase its presence as a chipmaker, more might also follow suit.

While there’s no replacement for experience, investing in these opportunities provides younger workers with the ability to gain quality experience. Global companies might also find that working with overseas colleges and universities can bear similar results. The semiconductor supply chain may appear at times to be fracturing, but it is — and for some time will remain — a global network, so success in its balancing will continue to require communication and cooperation from far-flung people and entities.

There will always be a need for assistance through the ebbs and flows of the semiconductor industry. Investments in recruiting, training and technology can substantially bolster the semiconductor supply chain to prepare for what comes next, with the right talent to keep it running smoothly through the inevitable ups and downs. Bringing the supply chain fully up to speed will take action from everyone involved in it.

Matt Hartzell is chief administrative officer at Smith.