The manufacturing industry is facing a number of challenges when it comes to employee retention and recruitment. With the current shortage of workers interested in “blue-collar” jobs, and the increasing skills gap, finding and keeping qualified employees is becoming increasingly difficult. This is especially true in light of the “Great Resignation” of the past year, which has led to a higher turnover rate.
A 2018 report by Deloitte and The Manufacturing Institute estimated that between 2018 and 2028, there could be as many as 2.4 million unfilled manufacturing jobs in the U.S. This labor shortage would have a significant negative economic impact, with the report estimating that it could cost the U.S. economy $2.5 trillion (source).
According to a recent Vistage CEO Confidence Index survey, 73% of CEOs in the manufacturing industry feel that recruitment challenges are affecting their business’s ability to function at maximum capacity.
Challenges for HR in the Manufacturing Industry
Industry perception:
Let’s face it; the manufacturing industry has an image problem. Young people think it’s dirty, dangerous, and boring. But the truth is, it’s none of those things. So, what’s the deal? Why is the manufacturing workforce shrinking?
Well, there are a few reasons. For one, not enough people are graduating with STEM degrees. And let’s be real, the perception of the industry is stuck in the past. And that’s where HR comes in.
Despite offering salaries that are higher than those found in most other industries, the manufacturing sector is struggling to attract and retain workers as pay alone is not enough to make it the attractive industry it once was.
So, HR departments in the manufacturing industry, it’s time to get creative. It’s time to break the stereotypes and find the workers you need to keep your companies running smoothly.
Decentralized nature of workforce:
HR departments within the manufacturing sector often face unique challenges when it comes to communication and feedback. One of the main challenges is the decentralized nature of the workforce.
Due to the nature of the industry, many manufacturing companies have employees spread out across multiple locations and across great geographical distances. This can make it difficult for management and HR to connect with employees and keep them informed about company policies, procedures, and decisions. It also makes it difficult for employees to voice their concerns and provide feedback to management.
Aging workforce:
An aging workforce in the manufacturing industry presents a number of challenges for HR professionals. One of the most significant challenges is the loss of experienced and skilled workers as they reach retirement age.
These workers often have a wealth of knowledge and expertise that is vital to the success of manufacturing companies. As they leave the workforce, it becomes increasingly difficult for companies to find and train new employees to replace them, which can lead to a gap in expertise and knowledge.
Difficulty in finding talent:
Another major factor is the impact of digital transformation on the manufacturing industry. Advances in technology have led to an increased demand for workers with specialized skills, such as expertise in automation, robotics, and data analysis. This has made it difficult for companies to find employees with the right mix of traditional manufacturing skills and digital expertise.
Additionally, the tight labor market is making it difficult for companies to attract and retain employees. With unemployment rates at historic lows, workers have more job options to choose from, making it harder for companies to compete for top talent.
4 Strategies to Attract and Retain Employees in the Manufacturing Sector
Invest in Employee Training and Development Programs:
One of the best ways to attract and retain employees in the manufacturing sector is to invest in employee training and development programs. These programs can help to bridge the skills gap and keep employees up-to-date with the latest technologies and trends. This can include things like on-the-job training, mentoring, and opportunities for advancement. For example, a manufacturing company might offer its employees the opportunity to attend industry conferences, take classes or earn certifications, or move up the ranks to take on more responsibility and higher-paying roles.
Emphasize Safety and Wellness Programs:
Safety and wellness programs are becoming increasingly important in the manufacturing industry. Employees are more likely to stay with a company that prioritizes their safety and well-being. For example, a manufacturing company can offer employee assistance programs, mental health resources, and ergonomic training to promote employee well-being. This not only helps to attract new employees but also helps to retain current employees by promoting a positive and supportive work environment.
Promote Flexibility and Work-Life Balance:
Flexibility and work-life balance are becoming increasingly important in the manufacturing sector. Employees are more likely to stay with a company that values their personal life and offers flexible working options. For example, a manufacturing company can offer flexible working hours, remote working options, and paid time off to promote a positive work-life balance. Or you can offer employees the option to work four 10-hour days each week or to take a paid sabbatical after five years of service.
Implement a referral program:
A referral bonus program is an effective way for manufacturing companies to attract and retain employees. The program incentivizes current employees to refer their friends, family members, and professional contacts to the company, which can help to increase the pool of qualified candidates for open positions. Additionally, by rewarding employees for referring new hires, the program helps to create a sense of ownership and investment among current employees in the success of the company.
When designing a referral bonus program, it’s important to set clear guidelines and criteria for eligibility. For example, a manufacturing company might only offer a bonus to employees who have been with the company for at least six months or who have referred a specific number of candidates in a given time period. Additionally, it’s important to set clear criteria for when and how the bonus will be paid out, such as when the referred candidate has completed a certain number of days or months of service.
Another key consideration when implementing a referral bonus program is to communicate the program effectively to employees. For example, a manufacturing company might hold an informational meeting for all employees to explain the program and answer any questions, or create a dedicated page on the company’s intranet or website to provide information about the program. Additionally, it’s important to recognize and acknowledge employees who have successfully referred new hires, such as by announcing the names of successful referrers in company-wide communications or by displaying a “wall of fame” in the office.
Conclusion
In short, the manufacturing industry is facing a number of challenges when it comes to attracting and retaining employees. From an aging workforce to a shortage of skilled workers and an outdated perception of the industry, companies must find new and innovative ways to attract and retain top talent.
But with the right strategies in place and the use of the right tools, such as Ripplehire, companies can overcome these challenges and build the skilled and experienced workforce they need to stay competitive in the industry. Ripplehire is a talent acquisition system that helps companies to identify and engage with the right candidates and streamlines the recruitment process to make it more efficient and effective. With Ripplehire, companies can identify the best candidates, track their progress and engagement, and make more informed hiring decisions, all through an easy-to-use platform.
