After enduring a protracted downturn and shedding 5.7 million jobs, 33 percent of their workforce, American manufacturers are leaving money on the table — and it’s ironic that a labor shortage would force them to do that.
A recent study from Accenture and The Manufacturing Institute reveals that companies may be losing up to 11 percent of annual earnings due to rising production costs stemming from a dearth of skilled workers.
Engineers, IT professionals and skilled tradespeople such as mechatronics technicians are hardest to find says Amy Cell, senior vice president of Talent Enhancement for the Michigan Economic Development Corp.
“We’re seeing rising wages and overtime and a potential impact on quality due to increasing turnover as new hires struggle to assimilate into the manufacturing environment,” she says.
An archaic image and outdated talent management practices are just some of the reasons why manufacturers are behind the eight ball when it comes to recruiting a new breed of factory worker who possesses technical, communication and math skills.
Nearly 75 percent of companies are reporting a moderate to severe shortage of skilled resources, and unless rectifying steps are taken, millennials will continue to seek greener pasture in places like Wall Street and Silicon Valley.
Here are several proven short-term strategies for closing manufacturing’s talent gaps.
Win head-to-head recruiting battles
In a competitive marketplace, it’s imperative to win direct competitions for available talent. Science and engineering degrees in the U.S. have increased by 19 percent since 2009, which should be good news for manufacturers.
Unfortunately, midsize manufacturers are getting outhustled by large companies and high-tech firms who dangle sexy projects, internships and job offers in front of science, technology, engineering and mathematics majors during their sophomore and junior years.
“Midsize manufacturers start too late,” says Jim Adams, vice president and partner of the Engineered Products and Services Practice at Strategy&. “By the time they get to campus in February or March, the top seniors are taken and they’re fighting over the leftovers.”
Providing guest lecturers, hosting student projects and networking with professors are low-cost ways to build relationships with budding professionals and preview their potential.
Manufacturers need to re-engineer their career track, professional development programs and communications strategy if they want to attract millennials, says Matt Mani, vice president and partner with Strategy&.
“Manufacturers take a fragmented approach to career development and that’s hurting their ability to compete for younger workers,” he says. “It’s not just an HR problem; it’s holistic.”
For instance, manufacturers are having a hard time attracting finance majors Adams says. Meanwhile, G.E. Capital is touting rotational training programs, lateral moves, stretch assignments and promotions based on performance instead of time and grade. Consequently, the financial powerhouse has no problem attracting the best and the brightest.
Manufacturers need to involve younger professionals in campus recruiting, update their image and shift their engineering model to attract and develop STEM graduates, Mani says.
Since millennials are more likely to hunt for work on social media, communicate by text message and are drawn to socially responsible employers, manufacturers need to implement some major shifts in their recruiting strategies to appeal to this idealistic segment of the labor market.
Younger workers are looking for more than a paycheck, they want to make a difference, and most importantly, they want to work for a company whose values match their own. Involving young, energetic professionals in campus recruiting can help to change manufacturing’s staid, dated image.