By Stephen Nellis

(Reuters) – Nearly four in five electronics manufacturers say that it has become harder to find qualified workers, compounding problems from an ongoing chip shortage and causing delays in shipping products, a trade group representing them said on Thursday.

IPC, which represents contract manufacturers such Foxconn, chipmakers such as Intel Corp (NASDAQ:), circuit board makers and other industry players, said about 80% of respondents in its most recent survey said they were having trouble finding workers. Over two-thirds (63%) of companies polled said their labor costs are rising.

This comes at a moment when there is a growing global chip shortage. Over half of respondents didn’t think the chip shortage would end by the end of the 2022. Ninety percent of those surveyed said that their overall material costs (which include other non-chip items) were on the rise.

According to the survey, this result was increased delays and shrinking profits margins. Nearly a quarter (25%) of companies polled said that their profit margins were increasing, while a third expected them to lose. A total of 88% said that their lead time – which is the amount of time it takes to fulfill an order and receive payment – was increasing, with some saying as much as two months.

Shawn DuBravac is chief economist of IPC, as well as the lead researcher in the study. He said that the worst labor shortages are occurring in North America, Europe and Asia. Electronic manufacturers will likely need to do more than raise wages (which 44% stated they did), to retain workers. Over a third said that they offer more flexibility or provide additional training.

Manufacturing sectors are a prime example of this. This will not be about higher wages. We’ll train you. DuBravac added that there are other goals you may have in education and that we can help with them.