3 tips on how to overcome labor challenges in the Manufacturing Sector

Along with price increases, supply chain issues, ongoing conflict overseas amongst other post-pandemic issues, the manufacturing sector is facing more challenges than ever. One challenge in particular is the labor and skills shortage having a large impact. According to Forbes, demand for manufacturing workers in the U.S. is 53% greater today than it was in December of 2019, and 42% of the manufacturing workforce has been absorbed by warehouse and distribution center jobs. One possible reason for the lack of available workers is that much fewer younger people are going into manufacturing roles from education; posing a problem in the education system itself. Are we pushing knowledge into these roles enough in schools? As well as this, is the knowledge up-to-date with the latest manufacturing technologies and methods?

Retaining talent is also becoming more of a challenge for the sector, as it requires not only fresh talent but skilled workers who are often spread out in different geographies.

There are many reasons that play a part in the challenge; let’s look at 3 tips on how to overcome labor challenges:

1. Be flexible in what your workers need

There are many workers in the manufacturing sector that may need to move around, work more than one job or place for many reasons. As well as this, the ongoing living crisis means that workers are struggling with living paycheck to paycheck. To alleviate this and provide more stability for your workers, you could be more flexible in your payroll methods. By showing your workforce that as an employer you truly care about the wellbeing this will build better relationships and retain staff. Providing more flexible methods of working as well as non-wage related incentives also shows that you as an employer reward good work and showcasing appreciation goes a long way.

2. Make sure you are staying up-to-date with the labor market and remain competitive

In relation to the above point, it’s key that you’re staying up-to-date with current pay rates, as many manufacturing businesses tend to fall behind. This can be a costly mistake to make, as workers will of course go to the company that is offering the best pay rate. “Global demand for manufacturing workers is 94% greater today than it was in December 2019, 73% of workers also cite higher pay as a factor for turnover as well.” - Forbes

Not only is it key to stay up-to-date with local pay rates, but global too. As many workers are commonly known to relocate countries for a better option. Many factors contribute to rising wages in the market such as the demand for skilled workers. However, don’t let this deter you from the need to recruit, as not investing in workers will only lead to higher workloads for current workers.

3. Improve staff turnover and stay modernized

High turnover for roles is becoming a challenge for the manufacturing sector, especially for contingent workers, as businesses are utilizing contract workers more than ever before. “According to Magnit research, 46% of voluntary terms before their scheduled end date occur within the first month of assignment.” - Forbes

To reduce early staff turnover, businesses should be making sure they keep communication open with their talent, checking in on current assignments. Another vital factor is to invest in modern technology such as pay intelligence and workforce management systems. These allow businesses to gain visibility on the current state of the workforce, predict upcoming needs and much more. By showing potential workforces that you are up-to-date and responsive to modern technology proves that you’re an innovative business able to open up new conversations, thus encouraging new and current staff that it’s the place to be.

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Source: Forbes