How do you find the balance between niche industry and specialized skillset employees?

January 10, 2026

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in West Palm Beach, FL, USA

Hey everyone, I'm currently looking at a company that manufactures metal fixtures with less than common raw materials. The employees have a relatively specialized skillset in the industry. The company has limited competition and services a niche area, but in the event a technician/employee leaves, replacing that individual could be challenging. How have you all thought about striking the right balance between niche product and specialized labor? Do you shy away from those types of businesses because your revenue generators are going to be harder to replace? Or do you welcome that characteristic because it makes you harder to compete with?

Reply by a searcher
from Massachusetts Institute of Technology in Dallas, TX, USA

I would find the balance by making sure specialized knowledge belongs to the company, not just a few employees. A niche product with skilled workers can be a strength, but only if the work is documented, processes are repeatable, and more than one person can do the job. If losing one employee seriously hurts revenue, that’s a risk, not a competitive advantage. The smart approach is to keep the niche but reduce dependency by cross-training, standardizing work, and retaining key talent. Businesses that do this well don’t avoid specialization. They build systems around it so the company stays strong even when people leave.

Reply by a professional-advisory
in Haifa, Israel

That's a great question, Mohamed. In niche manufacturing, the toughest specialized skill to replace is usually the person who understands the 15-year-old SQL database. Make sure you audit not only the shop floor but also the digital side of your operations. If only one person knows how the ERP works, you already have a retention problem.

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