The manufacturing industry contributed $2.18 trillion to the U.S. economy in 2016 and accounted for 11.7% of its GDP. On its own, U.S. manufacturing is considered the 10th largest economy—in the world. It’s also one of the largest U.S. employment sectors, accounting for 9% of the workforce and 12.3 million employees. With such a heavily populated workforce—many of whom are hourly employees, union members, or scattered throughout the country—it’s not surprising that manufacturing HR leaders face a variety of complex, industry-specific challenges. Thankfully, today’s technology solutions are increasingly alleviating these challenges.
To compete in today’s global economy, manufacturing companies must find innovative ways to strategically manage their human capital, streamline procedures, and attract investors. Fortunately, just as manufacturers are taking advantage of technology to improve their development and production, today’s HR solutions optimize the latest technological advancements to help manufacturing HR leaders recruit, train, and manage their employees.
Here’s an overview of some of the most common challenges in HR for manufacturing companies.
The sheer number of positions to be filled often poses challenges for manufacturing recruiters, and this problem is expounded by the industry’s widening skills gap. Deloitte predicts that from 2015 to 2025, nearly 3.5 million manufacturing jobs will be needed, but 2 million of these will go unfilled due to a serious shortage of qualified applicants for skilled and highly skilled production positions. Already, 40% of manufacturers are citing the lack of skilled talent as a primary roadblock to investing in technology that could improve their businesses and products.
With talent shortage comes steep competition. Traditional recruiting systems can be tedious, repetitive, and complex, making it difficult for candidates to engage and often causing frustration and dropout. Many companies lose candidates during the process without even realizing it. But by making it easy for candidates to provide information and actually interact with prospective employers, manufacturers can attract the best talent and encourage them to apply—especially younger workers, who are sorely needed in manufacturing. As an added bonus, innovative recruiting strategies can have a positive impact on retention.
With an abundance of shift and union workers, overtime, and geographically dispersed employees, manufacturing payroll can be highly nuanced and brimming with complexities. Employers must consider shift premiums, overtime, and union membership while keeping track of constantly changing federal, state, and local taxes for each employee.
Seasonal work and turnover
Transitions in HR for manufacturing companies occur frequently due to seasonal changes, acquisitions, and mergers. The industry is also experiencing a significant increase in turnover as talent shortage provides more competition and opportunities for skilled workers.
Proactively managing talent with meaningful and unbiased metrics is crucial for manufacturers, as is identifying top performers and potential flight risks. By utilizing a variety of reporting, analytics, and business intelligence tools, managers can gain complete insight into headcount, turnover, and recruitment to make the most informed and strategic workforce decisions.
Click on the links below for some examples of how manufacturing companies have overcome their HR challenges: