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There’s no question about it: Today’s manufacturers are being hit particularly hard with workforce challenges, many of which stem from an ongoing manufacturing labor shortage.
As a wave of experienced experts are retiring, a new workforce is entering the scene — one that is more tech-savvy (and prone to stay at jobs for a shorter period of time).
Meanwhile, the way people work is changing. As digital transformation initiatives and an increasingly hybrid work environment become the norm, organizations must be agile and willing to adapt in order to remain competitive.
Workplace expectations have changed, and manufacturers need to change, as well.
The Current State of the Global Manufacturing Labor Shortage — and Ongoing Workforce Challenges
The manufacturing industry faces a variety of hiring challenges today, the most pressing of which is the competition for talent. According to the U.S. Bureau of Labor Statistics, the manufacturing unemployment rate hit a historic low of 1.8% in December 2022. These conditions have introduced a shift in power: Workers have the upper hand as manufacturers have to compete with each other (and in some cases, other industries) to attract and retain the top talent.
Skilled workers who know the ins and outs of the industry are retiring — leaving knowledge and process gaps. At the same time, high turnover rates and shorter job tenures are becoming the norm. According to the U.S. Bureau of Labor Statistics, “the median tenure of workers ages 55 to 64 (9.8 years) was more than three times that of workers ages 25 to 34 years (2.8 years)” in 2022.
These conditions introduce a cycle in which manufacturers constantly have to recruit and train new talent. By leveraging digital augmentation, organizations can begin to break this cycle.
The Need to Shift From a Process-Centric to Human-Centric Approach
In light of the ongoing manufacturing labor shortage and increasingly competitive talent landscape, driving and maintaining worker engagement is critical to your long-term success. By shifting from a process-centric to human-centric approach to manufacturing, you can leverage digital tools to augment workers’ capabilities, empower informed decision-making, and continuously improve the worker experience.
Start by considering the types of conditions and opportunities different workers within your organization seek. For instance, you may want to evaluate the needs of salaried workers versus hourly workers.
Salaried workers often want to be able to take things to the next level. They want to be able to innovate and drive creative solutions to potential issues, implement changes quickly, and embrace digital tools to scale up across factories.
Meanwhile, hourly workers often want to be able to provide business value. They want to know the expectations for the job they are assigned, understand how success is defined, and have reward structures that highlight the value of their work. These workers may also want to be able to rotate through jobs via a flex workforce approach.
Once you understand the type of environment your team seeks, you can begin to identify opportunities to improve worker engagement. Start by evaluating your shop floor operations as they stand today. Consider the following questions when it comes to targets, feedback loops, and recognition:
If you go out to speak to a worker on the shop floor, do you think they’ll know their goals for the day?
When was the last time a worker’s feedback was implemented? How long did it take to implement?
Do you have a way to recognize employees who make process improvements?
By answering these questions, you’ll be able to identify ways in which you can leverage modern tools and technologies to adapt processes so that workers feel informed and engaged on a day-to-day basis. Ultimately, this type of environment will have a positive impact on both your employee retention rate and your bottom line.
How to Develop a Culture of Continuous Improvement That Drives Engagement
As workers want to see the impact and value of their work, developing a continuous improvement culture is critical to engagement. But what does a continuous improvement culture actually look like? Essentially, it’s an environment in which employees understand what’s expected of them — and then feel empowered, able, and willing to innovate and suggest how to improve specific processes and initiatives.
Here are some specific steps you can take to establish this kind of culture:
Update training processes on a regular basis to account for any new or evolving learnings.
Build out quality and compliance documentation so that all workers are aligned on specific requirements.
Establish a skills matrix to set goals and track progress.
Define standard work process and feedback loops so that workers know how and when to make suggestions for improvement.
Create an infrastructure that highlights how and when employee feedback is implemented. A reward system or gamification could be worth exploring here.
When it comes to training management specifically, there is a standard, basic workflow that involves defining skills, tracking training status, defining refresher requirements, having training content for workers new to a process, and establishing just-in-time trainings. While these steps can technically be done on paper, digitizing this workflow can drive valuable new efficiencies by increasing the speed and consistency of training.
For instance, you can use digital work instructions apps to provide visual guidance on how to perform tasks — ultimately leading to fewer errors. As these types of apps are easy to update, you can ensure your frontline workers always have the latest instructions at their fingertips. This type of digital infrastructure provides real-time visibility across the shop floor — allowing you to eliminate potential bottlenecks and more easily track process and cycle time, which helps drive continuous improvement.
Build the Foundation to Attract and Retain Talent
In the current manufacturing landscape, winning the ongoing battle for top talent often comes down to your organization's ability to develop a workplace culture and operational infrastructure that values (and rewards!) innovation — and provides workers with the desired opportunities to grow.
When thinking about where to start, consider the following high-level steps for moving this type of initiative forward:
Performance management: Empower workers to reach their full potential with clear goals and real-time visibility into their performance against those goals.
Continuous improvement culture: Define feedback loops — and recognize employees who make process improvements.
Employee engagement: Enable workers to innovate through creative solutions — and focus their time and energy on critical, high-value tasks.
Retaining and attracting talent: Create a desirable work environment that enables employees to see the value in their work and achieve career growth.
More competitive business: Increase productivity and improve product quality — ultimately improving the bottom line and making your company more attractive.
By creating this type of environment in which team members see the impact and value of their work, you’ll be one step closer to tackling the ongoing manufacturing labor shortage — and breaking the cycle of constantly recruiting and training new frontline workers.
Turning Your Workforce into Your Competitive Advantage
Read our ebook for insights on how a shift from a process-centric to a human-centric mindset can help you solve your most pressing operational challenges.