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Property Casualty

Addressing the Workforce Shortage in Manufacturing

Nick Kohlhof
Nick Kohlhof
Client Executive, Property Casualty

A study by the Manufacturing Institute stated that there would be 2.1 million unfulfilled manufacturing jobs by 2030 resulting from a lack of skilled labor. Here’s the good news: Recently there has been a record number of new hires into manufacturing jobs.

The bad news: job openings in the industry are still near an all-time high (around 800,000), and employees quitting outweighs layoffs and terminations. With the baby boomers retiring in droves and fewer young potential employees pursuing the trades, this trend likely won’t end soon.

There is a real workforce shortage. The question is, what are manufacturers doing to adapt?

Alternative Work Schedules

Traditionally, manufacturing hasn’t been known for flexible work schedules. Even smaller businesses have seen success moving to 4×10 or 3×12 work weeks. This can help make a position more attractive, grant flexibility, and benefit employees with families by decreasing their childcare cost throughout the week.

Part-time work and shift swapping options have also been utilized to help employees maintain a more desirable work/life balance.

Focus on DE&I

Males ages 25-35 years old are leaving the workforce and not coming back. Traditionally, this has been one of the most targeted demographics for manufacturing employees. Many manufacturing jobs are not as manual and hazardous as they used to be. Automation advances and necessity have influenced businesses to look outside of their usual suspects.

There has been progress closing the gender gap for manufacturers, but the drive for more women in manufacturing is a priority. Immigration and fertility rates among ethnic groups have shifted the make up in manufacturing significantly over the past 30 years as well. It is important to keep this in mind when recruiting.

During a recent conversation, one Iowa manufacturer explained they’ve found success focusing on non-English speaking candidates by using digital work instructions and job postings in other languages. Using local resources to hire veterans is also a great avenue to explore for skilled workers coming out of the military.

Embracing Automation and Technology

Robots are not stealing people’s jobs. Humans are still essential to manufacturing, and if anything, these machines are necessary to keep up with customer demands. Automation is everywhere, and it is making processes more efficient.

While terms like manufacturing 4.0 and “smart factories” may sound intimidating, the digitization of the industry is not as big and cumbersome as it sounds. In many cases, robotics for simple/manual tasks are safer, faster, and creating less product quality issues. The technology is more affordable than it has ever been. This does come with a need for increased training and skillset from certain employees, which can be a positive spin. A survey by ABB Robotics found that 62% of US businesses plan to invest in robotic automation in the next 3 years.

Wages and Employee Benefits

Sometimes the dollars just make sense. Although many manufacturing floors don’t meet the old stereotype of a dirty and sweaty environment, they are still competing with retail and the service industry for employees.

Much of the world is increasing wages and frankly, a small increase in pay/hour is enough to entice an employee away from your facility. Manufacturers are taking a hard look at wages, and most have adjusted stay competitive. Other aspects of total compensation are also being evaluated. Employers are constantly considering alternative employee benefit plans to help decrease healthcare costs and add or restructure offerings such as childcare support, mental health access, and vacation time. These benefits are crucial considering the more diverse employee base for the industry and a generation of employees considering their long-term financial plans.

Upskilling and Reskilling

Over and over, we hear how the cost of investing in your current employee base pales in comparison to the cost of recruiting, hiring, and training new talent. Reskilling is training current employees with new skills for lateral positions, so they are competent at multiple skills. This increases the efficiency of your production and minimizes downtime. It can also help immensely if companies are considering alternative work schedules.

Upskilling moves an employee vertically by learning new skills to advance their career path. Both are extremely important. Many manufacturers are partnering with community colleges and other training facilities to invest in their employees’ futures, as well as their own.

You Don’t Have to Innovate or Adapt Alone

Manufacturers have always been resilient due to their ability to innovate in times of adversity. While supply chain challenges, technology and automation, and sustainability efforts are key discussion points, the battle of the workforce shortage and finding talent is constant.

Many of the businesses that I talk with say that their biggest concerns are finding the people and materials to make their products. If they can do that, they will be successful. What is your business doing to address hiring and retention?

If you’re ready to learn more, Holmes Murphy can help. Reach out today and let’s get started!

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