How HVAC OEMs Can Scale Engineering and Production Without Adding Headcount

Your product roadmap includes smart thermostats and heat pump controls. The engineering team is already at capacity. On the production side, the same constraint shows up as open roles, overtime, and delayed launches.

Hiring looks like the direct fix. In practice it’s slow, expensive, and a poor match for skills you need for one program and not the next. The HVAC industry is short of skilled engineers, in part because of an aging workforce and the pace of new technology. Across U.S. manufacturing, the workforce shortfall has been estimated at 622,000 open positions. Rockwell Automation’s 2025 State of Smart Manufacturing report found that 41% of manufacturers are using AI or automation to close skills gaps and labor shortages.

The work is not getting simpler while you wait to hire. Sustainability targets and connected controls are pushing sensors, connectivity, and control algorithms into products that used to be mostly mechanical. Those products still have to meet safety and efficiency rules.

Factories face a parallel shift: more data, more automation, and tighter expectations on quality and energy use.

Two ways to scale engineering capacity

OEMs are using two responses; they aren’t substitutes.

Smart manufacturing on the line

Connect machines, capture operating data, and use that data to cut downtime and scrap. North America’s smart manufacturing market was about $58.4 billion in 2024 and is forecast to reach about $141.4 billion by 2031, an 11.7% compound annual growth rate, according to Verified Market Research. IIoT connects the equipment. AI is being applied to process control, quality, and maintenance decisions. Collaborative robots take repetitive or physically demanding tasks so people can move to higher-value work. Deloitte has reported that smart factory programs can raise production capacity by up to 20% and cut manufacturing costs by as much as 15%.

An engineering or EMS partner for product work

When the gap is firmware, power electronics, PCB layout, wireless design, or compliance testing, a partner can extend the team for the length of the program. Engineering firms design. EMS providers design and manufacture. That line matters if the same group has to take a control board from schematic to production.

Where hiring stops working

Recruiting, onboarding, and training take months. Salary and benefits stay on the books after the program ends. The specialist you need, such as an embedded firmware or power electronics engineer, may not be available locally. If you do hire, you can be left with idle capacity or a gap in a different skill.

Automation covers repeatable production work. A partner covers specialized design work that doesn’t justify a permanent seat.

What changes on the factory floor

Labor is the most cited reason, but it’s not the only one.

• Output and cost. Predictive maintenance and better use of energy and materials show up as less downtime and less scrap. The Deloitte range above is a ceiling from reported programs, not a guarantee for every line.
• Connected process data gives engineers a record to work from instead of a post-failure guess. Rockwell’s 2025 survey found that 50% of manufacturers expected to apply AI or machine learning to product quality that year.
• Energy and compliance. Efficiency is a top reason manufacturers give for sustainability programs. Smart systems show energy use, material consumption, and emissions. On the product side, the same pressure shows up as safety and efficiency rules the control design has to meet before release.
• Response time. Digital tools make it easier to change rate, mix, or a supply path. That only helps if the control design can change at a similar pace.

What a partner changes in the engineering group

An external team doesn’t replace the OEM’s engineers. It takes work outside their core skill set or current bandwidth.

• Specialists and lab tools you would not buy for one program: wireless design, compliance engineering, simulation, and test equipment.
• Capacity that can rise for a new product introduction and drop when that work ends, without a hiring cycle or a layoff.
• Cost tied to the program. You pay for the work while it’s active. A design-for-manufacturing review at the start cuts rework that later shows up as a respin or a line stop.
• Parallel work. A partner that already runs prototyping, test, and compliance can move those tasks while your team stays on system architecture and performance.
• A clean split of ownership. If your edge is HVAC system architecture, the partner can own PCB design or control-board firmware, with the handoff defined up front.

Outside engineering fails when scope, design ownership, and the path into manufacturing are vague.

Putting both in one plan

If the constraint is open production roles and repetitive tasks, start with the line: what data you already collect, where downtime and scrap occur, and which tasks a cobot or a closed-loop control can take. If the constraint is a control design your team cannot staff, decide early whether you need design only or design plus manufacturing.

The join point is the electronic control. A heat pump or air handler control that your team architectures, a partner lays out and builds, and a connected line then assembles and tests, is one capacity plan. Splitting those decisions across unrelated vendors is how schedules slip twice.

Avnan’s work sits on that join: control design, compliance testing, prototyping, and production for HVAC and appliance OEMs, with design, manufacturing, and supply chain in one organization.

Key Takeaways

• Hiring will not close a skills gap that is temporary or highly specialized. Scale engineering capacity with a partner, and scale repeatable production work with automation.
• Smart factory tools and an EMS or engineering partner solve different constraints. One does not replace the other.
• North American smart manufacturing is forecast to grow from about $58.4 billion in 2024 to about $141.4 billion by 2031. That spend follows labor, quality, and cost pressure.
• Keep in-house engineers on system architecture and performance. Hand off PCB design, firmware, or compliance work only with a written scope.
• Connect the two plans at the control board so design capacity and line capacity move on the same schedule.