Solving the Manufacturing Talent Crisis
This is article is part of a series of monthly articles produced by Harbour Results for PMA’s MetalForming Business Edge e-newsletter. Click here to view the full collection of articles.
The Manufacturing Talent Crisis Will Not Fix Itself. Are You Taking Action?
As we transition into the second half of 2021, the manufacturing industry continues to face challenges as a result of the COVID-19 pandemic. When asked about their greatest areas of concern, metal formers responded with raw material availability and price and access to labor. Talent attraction and retention have been a concern across all manufacturing sectors since 2019 and have only been exacerbated by the pandemic.
Currently, there are more jobs than people who want to work – 1.8 million people have turned down jobs to stay unemployed for one reason or another. And, although the U.S. is down 7.6M jobs, new jobs are being added every day, which is good for the economy, but companies - specifically manufacturers -are still struggling to fill open positions due to competition with unemployment and poaching from other industries.
So, what are you doing to be a more attractive employer? What are your strategies to attract and retain the right employees? Based on the recent PMA Metalforming Insight survey approximately 50% of metalformers have an HR professional and of those 60% have a seat at the leadership table. Although that is better than many other industries, it is not good enough to address the talent crisis. If talent is an issue, you need to have the right HR professionals in place, and they need to be directly connected to the top leaders.
The cards are stacked against the industry and will likely not change soon, so it will be critical for companies to address this issue as they would other issues that threaten the business. Because the truth is, employee turnover is costly – approximately 50% of the employee’s salary and it directly impacts shop efficiency – because you are losing a trained employee and taking the time to train a new employee.
Culture is Your Competitive Advantage
A company’s culture impacts its ability to attract new talent and employee turnover. Every company has a culture – there is no such thing as a “culture-less” organization. The next-generation workforce has clearly stated that they will not tolerate a bad workplace culture – 70% said they would take lower pay rather than deal with a bad workplace environment.
So, the first step companies can take to mitigate the talent crisis is to conduct a culture assessment to understand who the company is and if you are stable or unstable. The assessment will look at your data in the following areas:
Employee Turnover Rate
Length of Job Opening(s)
Employee Performance Metrics (efficiency, quality, etc)
Absenteeism
Participation (training, special programs, activities)
We also recommend conducting an employee satisfaction survey to better understand if your team feels engaged; if they can provide feedback; if they are working as a team; and, they understand and support your company’s mission and values.
It’s been our experience that those with an unstable culture will have high turnover, low-performance scores, little participation and overall a disengaged workforce. This is a red flag that indicates the leadership team needs to act. Culture starts at the top – it is the leader’s vision for the organization. Standout companies are proactive about building a culture that delivers on business strategy, wins against the competition, and remains steady in turbulence. In other words, they’re intentional about culture and it is clearly communicated throughout the organization and executed by the leadership team.
Establishing an employee-centric culture will help you get a leg up on other companies that you are competing against for talent.
Putting a Plan in Place
Would you add equipment or automation to your shop without a clear plan in place? Talent is no different. Companies need to put a hiring and retention strategy in place. Talent acquisition is a long-term strategic effort to seek out qualified candidates, cultivate relationships, and ultimately convince those candidates to bring their skills and expertise to your company. What is your succession plan? Where are your gaps? What does the ideal team member look like? Is my workforce diverse?
Your strategy needs to address all facets of talent – your number one resource. And, for manufacturers, this can be more difficult because you will likely need two strategies – one for hourly employees and another for salaried staff.
Leadership working with HR needs to determine what talent resources are needed to meet business goals and how it’s going to take care of those employees – what tactics are needed to accomplish this, who is responsible for implementation and what are the success metrics.
Connect HR and Marketing
It seems logical, but very few manufactures connect the relationship between HR and marketing. The two job functions share similar objectives targeted toward different audiences. Marketing is accountable for the branding of the company and communicating it to customers. HR is responsible for employment branding; ensuring the organization is perceived properly by internal employees and external candidates.
The lines between these two areas are becoming blurred as both marketing and HR share the responsibility of ensuring the employment brand is strong, and that employees are sending out the right brand message to their customers. Both departments are incredibly valuable to any organization and collaboratively they can help improve the employment brand, drive the culture and identify and attract needed talent.
Companies need to leverage their website, social media, community engagement and visibility, advertising, job sites, career fairs and other means of marketing to increase the awareness of your business and create a desire for people to want to work at your organization.
Listen
Finally, it is critically important for your leadership team to listen to employees, peers and experts. What are people sharing with you and what does it mean for your organization. Labor has been a challenge for the past several years and will only get more difficult as baby boomers retire and Generation Z enters the workforce. By actively listening and taking action your shop will be better positioned to address the talent crisis to profitably deliver high-quality parts.
As an industry talent has been and continues to be one of your biggest challenges. The talent crisis will not fix itself, and we can only expect it to get worse. They say “doing the same thing over and over again and expecting different results” is the definition of insanity. The time is now to address this issue; to take action; to put the right people and a plan in place.
About the author:
This article was written in collaboration with Marion Wells, founder and managing partner of Human Asset Management (HAM), a human capital firm helping organizations re-ignite employees’ passions, talents and sense of purpose.
