Insights

Taking the Sting Out of a Tight Labor Market

Taking the Sting Out of a Tight Labor Market


Dec 16, 2016
Manufacturing and Distribution

Tight Labor Market 
What’s the most urgent issue facing today’s manufacturers? Whether you ask large discrete manufacturers, contract manufacturers or job shops, the answer is the same: the growing economy. This might sound counterintuitive, but the “downside” to prosperity is that as our economy grows and businesses expand to meet the demand, there will be a shortage of workers to fill the jobs that result.
 
It’s expected that over the next decade nearly 3.5 million manufacturing jobs will be created; it’s also expected that 2 million will go unfilled. There are a couple reasons for this: First, the baby boomers (men and women born between 1946 and 1964) who now fill a sizable portion of those jobs are will continue to retire. Not only will they leave the workforce, they’ll take valuable skills and knowledge with them, too. Before the latest recession, the number of retirees increased by about 400,000 each year; in the past four years, that figure has surged to more than 1.2 million annually.
 
This loss of know-how is formally known as “the knowledge gap,” and it sends shivers down the spine of many manufacturing organizations. Upper management is kept awake at night wondering, “Who will fill these jobs so we can fill our orders?”
 
To absorb sales growth you don’t always need to hire more people, if the people you have are given the skills, technology and opportunities to help them “do more with less.” Here are some of the ways manufacturers can combat the lack of qualified workers—because without a steady stream of capable people, profitable growth and ongoing innovation are nearly impossible.
 
1. Differentiate Your Organization—Brag About Your Company Culture!
Millennials don’t just want a paycheck; they want to enjoy their work. A big part of that contentment is realized through an organization’s culture, so promoting your culture is as important—if not more—than the job postings you share. Millennials will look for a job and workplace that align with what’s important to them (good benefits, a positive atmosphere, advancement opportunities), so if you don’t already have a document describing the basic features of your culture, create one that speaks to their needs. Videos featuring workers in this age group talking about what you offer could be the most effective way to attract Millennials.
 
2. Train, and Train Often
The best way to offset the skills gap is to give current and new employees the training they need. The right technologies will reduce the overall learning curve; rather than job shadowing—a watch-and-learn approach—you make training more efficient and effective when you give workers the tools to learn, such as iPads with interactive programs that simulate machinery and processes, for example.
 
3. Provide Opportunities to Grow
In a “buyer’s job market,” in which job seekers place a premium on job satisfaction, you can’t simply stick a person in front of a drill press and expect him or her to be fulfilled at the end of the day. Rather, you need to give people opportunities to learn new things and develop their skills. There are several ways to do this: internal job postings that encourage employees to pursue other roles within the company that might interest them; lunch-and-learn sessions where the latest technologies and tools are demonstrated; and company-sponsored education and training that give workers a chance to earn relevant industry certifications to name just a few. 
 
4. Eliminate Rework
When organizations operate in silos there’s a very real chance that lack of integration will cause significant rework. Examples of situations that cause rework include using unskilled or untrained workers, production line bottlenecks, lost or misplaced material or equipment, poor communication, and improper planning.
 
In a tight labor market you can’t afford to have people working on anything but activities that contribute to the bottom line. Manufacturing business software eliminates the silos that stand in the way of a highly productive and efficient job shop by giving you a 360 degree view of your entire supply chain so you can to evaluate each task (in real time) to understand where improvements can be made. This software can even apply best practices to your workflows to help you achieve industry benchmark levels of efficiency and productivity. 
 
5. Take Advantage of New Technologies to Eliminate Manual Tasks
Organizations that perform repetitive tasks manually are wasting time—time that could be spent on more productive, revenue-generating work. New technologies automate a number of a job shop’s repetitive tasks, like posting transactions to the general ledger, preparing financial statements, managing receivables, billing and collections, managing compliance, preparing financial statements and many more. Automation will make your workflows more efficient, help drive down costs, and allow you to focus on work that contributes to profitability.
 
Culture, training and growth opportunities are becoming increasingly important as manufacturers compete for workers and struggle to keep up with demand; each acts as a powerful employee attraction device—and helps ensure retention.
 
To learn more about combatting the effects of today’s knowledge gap, reach out to one of Wipfli’s manufacturing experts. We “get” job shops and contract manufacturing because we’ve been helping businesses like yours for decades; many of our consultants actually started their careers in manufacturing. 

 

Author(s)

Mark Stevens
Mark Stevens
Partner
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