Manufacturing represents 11.4 percent of the nation’s GDP and contributes more than $6 trillion in annual revenue. However, manufacturing is facing a talent shortage that, if not addressed, could undermine the industry.
Over the next decade, nearly 4.5 million manufacturing jobs will need to be filled in the U.S. Ensuring we have enough workers to accommodate the growth demands innovative solutions, according to Aerotek experts, who offer recommendations on how employers can recruit and retain a qualified workforce.
“There are three major trends driving employment in the manufacturing industry today,” notes Lindsay Green, director of strategic sales for Aerotek. “‘Job openings have increased, pay rates are going up, and the number of people looking for jobs in manufacturing has decreased.”
“Competition has always been a crucial factor in determining what manufacturing employers are paying their workforce,” she explains. “But more recently, new employers to the marketplace are offering significantly more to recruit workers and it’s changing the industry landscape. In a market traditionally paying $11/hour, for instance, employers are competing with newcomers paying $16/hour.”
That dynamic is creating an extra level of tension. “Employers are responding by increasing wages— 10 percent, 20 percent… but it can’t happen overnight,” Green says.
“In this era of record-low unemployment, I’ve found that manufacturers are much more invested today in learning what factors will influence workers in deciding to take one offer over another and it often involves compensation,” agrees Sammy Schurr, a strategic account executive who specializes in the industry. “Location is another consideration… people won’t drive further for a job that pays the same. Facilities that have access to public transportation can have a significant hiring advantage.” However, she notes, manufacturers that are further away or who lack access to public transportation can level the playing field by offering incentives.
Green counsels her clients on how to improve their “pitch” to potential employees by developing and communicating a compelling employee value proposition (EVP). “Candidates want to know why they should choose you instead of your competitors,” she says. Make sure your EVP is authentic and compelling — clearly articulating your mission, culture, benefits and future opportunities.
Offering career and skill development opportunities for new and existing employees can help boost a company’s visibility, value and reputation, notes Schurr. Some manufacturers are investing in paid training to create their own qualified candidates, she adds. “They hire people with great potential instead of insisting on only candidates with the perfect skills or experience, then they provide training to bring them up to full speed.”
“Retention is the flip side of recruiting — and one that’s nearly as important to the bottom line,” Green notes. “If employers are hiring workers but not keeping them, they’re doing a lot of work to stay in the same place,” she says. “An employee base that’s constantly churning is never up to full productivity, and the costs of replacing a leaving worker average up to 33 percent of a worker’s annual salary,” according to HR Dive.
Green also addresses these issues in the strategic business reviews she holds regularly with her manufacturing clients. “Some employers don’t always see how attrition, productivity and total cost relate to each other,” she says, “so we share a broad range of data — from industry trends to specific statistics on their workforce in particular. We also urge them to look at their production output to see the impact understaffing, continuous onboarding and churn can cause.”
Workforce planning plays a huge part in managing costs while maintaining productivity. “Manufacturers that have a variable workload may choose to hire contingent employees so they have flexibility,” Schurr says, “instead of hiring when business is up and laying off when business is down.” Recently, she says, she has seen an uptick in manufacturers converting more contract employees to permanent status, possibly in response to the low unemployment rate.
Manufacturers have their work cut out for them, accommodating a competitive employment environment and rising labor costs. However, by implementing strategies like managing attrition and offering paid training, they can keep their business well-staffed and growing.