It’s a pretty good time to be in manufacturing. Overall industry output is up, the economy is strong, there’s a renewed consumer interest in domestically produced products, and experts forecast even faster growth in 2019. The problem? Manufacturing companies can’t find enough skilled workers to fill the open positions they have now, let alone the estimated 1.96 million new manufacturing jobs that will be created by 2028.
G&A Partners was delighted to host a panel discussion at HOUSTEX, the industry-leading Southwest manufacturing trade show, in February. Our panelists, which included several of G&A’s own HR and recruitment experts, came together to discuss the challenges manufacturing companies – both in Houston and across the country – are facing when it comes to recruiting, retaining and engaging skilled workers in today’s tight talent market, as well as how partnering with experts in HR, human capital, and other areas of workforce development can help manufacturing companies overcome these challenges.
Below are a few of the other key insights and observations our panel discussed. If you want to hear directly from the experts themselves, scroll down to the bottom of this article to find the full recording of the discussion.
With older workers rapidly approaching retirement and not enough younger workers with the skills or interest to replace them, many manufacturing companies are struggling to maintain a large enough workforce to keep up with their current workloads — much less add more staff in anticipation of future growth within the manufacturing industry.
Even manufacturers that have been able to keep their companies staffed up are struggling to adapt and change to what it means to have such wide generational diversity in their workforces. The truth is, what workers in each generation expect from their career and employer are drastically different: Younger workers are more likely to want (and be swayed by) company culture-related perks — everything from big screens in the break room to wellness initiatives to child care — while older workers are more likely to be happy to maintain the status quo but may lack the technical skills required for more innovative processes and advanced machinery.
While compensation (salary, wages, etc.) is always going to be essential when workers are evaluating job offers or opportunities, it’s not the only factor today’s workers are taking into consideration. Workers across all generations are placing more emphasis on perks and benefits related to work-life balance, career development, and company culture.
Instead of trying to compete for dollar-for-dollar with offers from larger firms that are often able to afford higher wages, smaller manufacturers can instead emphasize perks or benefits their workers receive outside the paycheck, like more flexible scheduling, a more engaging or fun atmosphere or environment, a focus on career development, etc. The key to winning the war for talent isn’t paying more – it’s turning your company into one that people want to work for.
The single best way to permanently close the skills gap is to close the “awareness gap” that exists among younger generations. Simply put, there’s a lack of education for young people about the benefits a career in manufacturing offers. Think about when you were young: what did you want to be when you grew up? The answer to this question is largely influenced by the careers children can see around them, which is why so many people grow up wanting to be doctors, firefighters, etc.
The task for today’s manufacturing companies is to ensure that future generations of workers are as aware of manufacturing as they are of these other jobs by making manufacturing careers visible and appealing early on. That means investing in and partnering with schools at all levels to educate students about what a career in manufacturing really looks like now, emphasizing the opportunity to actually create and produce things and to be innovative as technologies like AI and robotics continue to transform the industry. Getting plugged into the education system not only helps manufacturing companies build a pipeline of workers to fill future staffing needs for decades to come.
Education – or more specifically, training – is also the answer to closing the skills gap in the short term and can take many forms, such as:
The key to making sure training efforts are effective, however, is to make sure that they are covering the key competencies the company needs. To do this, however, companies have to think in terms of both technical skills and soft skills to develop a holistic understanding of the skills and abilities workers need to have to be successful. Developing competency-based training programs allows employers to develop a roadmap for developing the next generation of manufacturing workers.
The cost (in terms of both actual dollars and time) it takes to hire and train a new employee is considerable, which is why it’s incredibly disappointing when a new hire doesn’t work out. (And downright aggravating when they don’t show up at all.) The reality is, however, that about half of new hires leave within just four months – and that figure is likely to be even higher in today’s tight talent market. Moreover, it can cost between 30 to 150 percent (depending on the position) of a worker’s salary to replace them when they walk out the door.
Manufacturers that don’t place (at least) equal emphasis on retaining their current workforce as they do on recruiting new workers are simply setting their companies up for failure in the long run. The good news is that any programs or initiatives a company invests in to improve retention will naturally help improve recruitment efforts, as well, by giving the company a reputation as an employer of choice within the industry.
If you’re interested in watching the full discussion, check out the video below: