Manufacturers play a vital role in the U.S economy. According to Deloitte:
- 83% of Americans believe manufacturing is extremely important,
- Manufacturers contribute over $2 trillion to the economy every year, and
- The sector employs over 12 million workers.
But despite this tremendous contribution, manufacturers face numerous challenges. Some of the most pressing concerns right now include:
- An aging workforce,
- Attracting and retaining younger employees, and
- Using workforce metrics to make informed decisions.
In this blog post, we look at how these challenges are costing manufacturers hundreds of thousands, if not millions of dollars every year. We also offer tools that you can use to mitigate these concerns in your manufacturing firm.
The aging of the U.S. workforce has often been described as the “silver tsunami.” And no industry is feeling its impact more than the manufacturing sector.
According to a survey conducted by the Manufacturing Institute:
- The median age of a manufacturing worker increased to 44.2 between 2000 and 2018.
- Over 90% of industry leaders say they’re aware of the issue, and
- Close to 80% mentioned that they were very concerned about it.
Manufacturing companies are particularly concerned about the loss of institutional and technical knowledge (brain drain). This is because the population of younger workers with education, skills, and experience to replace the aging workforce isn’t large enough to replace the departures.
Attracting Younger Generation Of Employees
Apart from having a significant portion of employees nearing retirement, manufacturers are struggling to attract younger workers. Deloitte reports that 5 out of 10 open positions remain unfulfilled in the manufacturing industry.
And over 40% of younger generations are shunning these jobs because of negative perceptions. Industry experts, including, SHRM warn that unless HRs change tact, manufacturers stand to lose $3,000 per existing employee or 11% of their annual revenues due to the talent shortage.
The manufacturing industry has one of the highest rates of employee turnover. A recent study found that 2 in 5 manufacturing firms (40%) report an average of more than 20% annual turnover.
Considering that the industry is already grappling with labor shortages, company leaders need to up their game to boost employee retention. According to Gallup, the cost of replacing one employee can range between one-half to two times their annual salary.
For manufacturers with more than 100 employees and average salaries of $50,000, that number can easily surpass a million-dollar mark every year.
Now that you know how these problems are costing your company an arm and a leg, here are some tools that you can use to evade the downward trajectory:
Learning Management System
According to a recent study from the Manufacturing Institute’s Center for Manufacturing Research, over 50% of employees below the age of 25 remained with their employers because of training and career opportunities. This means companies offering these perks have a lower turnover than those that don’t.
The good news is that you don’t have to take your employees to college to offer these benefits. A learning management system tool is all you need. You just need to pick a system that is flexible, social, and can be customized to suit your business.
The Learning Management System on our platform, isolved has been tested and proven for years. We ranked as a leader in 2021’s learning and development statistics from Software Review. The system can help you:
- Customize content
- Engage with employees (learners)
- Pre-build courses
- Generate reports
With a Learning Management System like this, you are guaranteed a seamless modern learning experience to offer the employees flexible, social, and custom-designed learning opportunities. It helps to achieve business success by enhancing employee performance and engagement. Employees also get effective consumable content from the pre-built courses for further learning and business operations training.
As mentioned earlier, the manufacturing sector is struggling to attract a younger generation of employees. And that has been greatly attributed to negative perceptions.
For many of us, the word “factory” creates a Dickensian dystopia of dirt, smoke, greasy machinery, and risky working conditions. And millennials are no exception. But that’s slowly changing.
Penn Foster reports that a growing number of millennials (37%) are seeing manufacturing as high-tech career choices as compared to baby boomers (23%). And companies who don’t market themselves as such are less likely to attract younger generations.
So take a closer look at your hiring process. Is it offering your current and potential employees great experiences? Is it capturing the interests of younger employees? What about automation?
The reality is that every manufacturing company needs a great talent acquisition tool to attract and retain younger employees. Today’s employees, for example, expect their employers to have an electronic interface that welcomes them. And that’s not all. You also need a great …
After attracting the right talent, never underestimate the importance of providing top-notch onboarding. Research shows that:
- 69% of employees are likely to stay with their employers for 3 years if they experienced great onboarding,
- New hires who go through structured onboarding programs are close to 60% more likely to remain with their employers after 3 years, and
- Companies with standard onboarding processes witness 50% greater new hire productivity.
Therefore, it pays to create a better experience for new hires. And nothing does that more than this powerful onboarding wizard. With this tool, your company can:
- Go paperless
- Become more efficient
- Store forms electronically for easy accessibility
- Remains compliant
- Engage with your employees in real-time
The Onboarding solution enables employers to offer excellent employee experience through automated workflow, seamless training, paperless processes, fast verification, compliance, and stored forms. A perfect onboarding solution reduces stress, improves performance, enhances employee satisfaction, and better retention to keep the best team working for you. You can update all your company’s critical information using one single database to enable fast communications.
HR And Payroll
Manufacturing companies are finding it difficult to manage their payrolls and other incentives. New complexities are often added into the mix and HR teams have to perform extra contortions in their calculations.
For instance, HR teams have to deal with varying job rates, offer unique incentives to attract and retain employees, comply with the Fair Labor Standards Act (FLSA) and incorporate production into employee compensation.
All these figures must be accurately entered. A slight mistake can result in employee disputes or FLSA violations. But that shouldn’t occur at your company when you can leverage the right payroll and HR tools.
The isolved Payroll platform offered by Platinum Group provides:
- The power to use the system anywhere since it’s cloud-based,
- Automate tax filing,
- Generate reports, and
- Employee self-service.
With these tools, you get accurate insights into your workforce to expand and drive employee performance. They also help to simplify workflow and processes while enhancing the employee experience.
TIME & ATTENDANCE
One of the most challenging tasks for employees is to track employee attendance. It is time-consuming and prone to human errors. Therefore, Time & Attendance modules for employers help to combat this problem. The best systems allow time entry data that records accurately on a single database to keep track of employees effortlessly. Employers save on costs while reducing their time to keep their employees’ schedule documents in place. There is also a reduction in paperwork, and the data is accessible anytime, anywhere.
The manufacturing industry has a fair share of challenges. But plugging into the younger generation of employees, retaining high-quality talent, and leveraging workforce metrics to make informed decisions are perhaps the most pressing concerns right now.
At Platinum Group, we pride ourselves on helping you overcome these challenges. With our learning management system, onboarding, talent acquisition, and human resource tools, you can take your manufacturing company to the next level. Contact us today to speak with one of our friendly experts and schedule a demo.