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The Future of Manufacturing Relies on Engaging Today’s Workforce

Kylene Zenk
By Kylene Zenk Director, Manufacturing Practice Group, Kronos Inc.

A number of dynamic factors directly influence what the future of work will hold for employers, particularly in what’s described as an “employee-choice economy.” Topping that list for two out of five manufacturers is a troubling 20 percent-plus annual turnover rate, per Mercer, the workforce strategy and analytics company. The industry already faces a skilled talent shortage, and as the current workforce ages into retirement—taking decades of knowledge with them—few among the newest generation are lining up to take their place.

With this in mind, retaining skilled workers should be a strategic business initiative for all manufacturers. But where to start? According to a 2019 survey by Employbridge, blue collar workers identify work culture as the greatest factor in retention, suggesting that if manufacturers can find a way to engage their current workforce and arm employees with the skills they need to work in a modern manufacturing environment, they may be able to taper industry predictions of a massive, two-million-job shortage.

Emphasize upskilling in every corner of the business.

The cost of employee turnover is extremely high, including both direct (e.g. recruiting, training new hires, overtime compensation to replace missing workers) and indirect costs (e.g. lost productivity, quality issues). At the same time, potential employees have more choices today than ever before, such as the manufacturer down the road, gig work, or flexible employment in retail.

Dealing with record-high employee turnover and the rise of advanced technologies amid a competitive job market, manufacturers simply can’t ignore the urging of today’s human capital management (HCM) experts to invest in reskilling and upskilling current workers to fill critical labor gaps.

In addition to providing robust leadership training, manufacturers should consider establishing mentorship programs to transfer knowledge from experienced workers to younger employees. Encourage managers to understand their employees’ development goals and communicate the steps it will take for them to get where they want to be in their careers. Effective communication and change management will be critical to this endeavor; it’s been shown time and time again that employees feel more engaged when they understand how their job connects to their company’s higher strategy.

Some manufacturing organizations tend to overlook the importance of development programs designed to upskill or cross-train the hourly worker, yet these employees desperately crave opportunities to evolve their skillset—and many are willing to jump ship and work for a company that does invest in training its people.

Prioritize work culture, the greatest factor in retention.

To prepare for the future of work—a future characterized by the crucial balance of people and technology—manufacturing leaders must look inward at their corporate culture to determine what changes are necessary to adapt. After all, organizations with a non-inclusive company culture are often plagued by low employee engagement, which increases turnover risk.

It’s time to place a greater emphasis on the moments that matter to the workforce by fostering a people-centric culture. To improve retention, manufacturers must focus on creating an environment where employees are treated fairly, feel valued, can grow professionally, and feel they can make an impact.

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