The U.S. manufacturing industry is currently experiencing a resurgence as both domestic and international companies are investing in new facilities.
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While the near-shoring trend provides a positive impact on business growth and recruitment across the United States, organizations need to be ready to revamp their human capital planning. In this article Geddings Roche, Industrial Market Leader for North America at Futurestep, looks at the changing landscape across the manufacturing sector and outlines the steps organizations should take to make the most of this opportunity to boost productivity.
Over the past twenty-five years, the greater Asia region, particularly China, has been at the center point of the global manufacturing industry. Due to increasing levels of competition, producing and exporting a wide range of goods on a huge scale and at low cost became the priority. This made it common practice for the West to outsource operations to keep costs down and maintain overall growth objectives. However, of late, global companies have again been investing in the United States – $14 billion according to the Rhodium Group research firm. This investment from Asia, alongside America’s increase in re-shoring, is creating an impact on the U.S. economy and labor force.
There are several reasons for the reshoring of U.S manufacturing. These include decreasing energy costs and more competitive labor rates compared to China. Additionally, the United States remains the largest consumer of goods in the world, so producing goods nearer to customers helps to meet demand quickly while lowering transportation costs. Individual states are also helping hugely towards reshoring by offering incentives and tax breaks. Most recently, the car manufacturer Tesla Motors was wooed by a number of states, each offering lucrative incentives to win the investment of a new $5.5 billion manufacturing plant in their region. Motivated by Nevada’s investment-friendly policy framework, the state will now benefit from a boost in employment and a stronger local economy for residents.
While the benefits to an organization investing in U.S. manufacturing are clear, there are talent implications that now have to be considered. The number of manufacturing-related jobs has started to rise after plunging for decades, edging up by about 600,000 over the past four years to more than 12 million(1). As such, this increase in demand for skilled labor is reinforcing the importance of implementing a strategic talent management plan that includes recruiting, retaining, and developing highly skilled talent.
Businesses are feeling the pressure in the short term to recruit best-in-class talent quickly and efficiently to fill current openings. There are simple steps that can be taken to create a sustainable pipeline of talent that can support the stretched workforce:
- Establish your talent acquisition strategy – In the increasingly competitive world of manufacturing, there is one constant: talent is essential to business success. The right talent acquisition strategy and process – the ability to identify, assess, attract, and retain the best talent – can significantly impact a company’s competitive advantage. A strong talent acquisition strategy needs to focus on five key aspects: sourcing candidates effectively, providing a first rate candidate experience, monitoring recruitment data, communicating the company’s brand and value proposition effectively, and investing in an appropriate applicant tracking system to streamline the process. For example, we recently partnered with a Fortune500 company in a remote part of the Southeast United States to build out its manufacturing leadership team. As is often the case with manufacturing, the local market was very limited in terms of supporting well-qualified candidates that would not require relocation. As such, a strategic talent acquisition strategy that particularly emphasized identification planning was critical to this effort.
- Leverage data to ease the recruitment process – The amount of candidate information involved in the recruitment process is rising exponentially, ranging from skill sets and industry experience to personal/cultural attributes. Each time a new role needs to be filled, the recruitment process does not need to start from scratch. Manufacturing organizations can harness this data through an applicant tracking system to keep information on file to make the process more efficient going forward. Data can also be helpful by identifying inefficiencies in the recruitment process to reduce the hiring cycle time. This averages 90 days for experienced-level talent, but can be shortened by consolidating the number of interview rounds for a candidate.
It is important to strengthen and develop the existing talent already present within an organization, using specific tools to both identify high-potential individuals and develop them further. Here are the mid-term actions that should be taken:
- Refresh job profiles – It is important to ensure that mid-level job role profiles are updated as the business continues to develop. Modern manufacturing is evolving quickly and so are the skills required to effectively lead these sites. The HR department must assess candidates for the core technical skills needed, as well as the cultural fit, to ensure that the most qualified talent is a fit for both the position in question and also for the organization as a whole.
- Prioritize developing talent – Often the leaders of tomorrow already exist within rganizations. Manufacturing businesses must also invest in developing its own talent in order to retain its high potentials that might otherwise be approached by competitors. The first step in developing these future leaders is to identify them by the qualities and traits that are ‘mission critical’ to move into the next level, and encourage their progression within the organization. It is also important to track where high potential candidates are exceeding, meeting, and missing expectations in order to provide a robust development plan that puts these individuals on a path for growth. There are career development tools and technologies available that help to support each step of this process.
Long term planning
Aligning internal talent strategies with longer-term business objectives is paramount for any organization. There are several points to consider to plan for long-term success:
- Increase recruitment agility – As the manufacturing industry continues to evolve by forces such as automation, so should internal talent strategies in order to continually align with the overall business strategy. A dynamic talent strategy includes developing new training schemes, keeping an eye on the latest job advertisement methods, and adapting HR technology to better serve the business;
- Reduce staff turnover – Once top tier talent is on board, it is important to retain these individuals for continuity to drive the business forward. There are many ways to ensure the retention of new hires. For example, businesses should continually establish and communicate key performance indicators which can help employees to focus on both personal and enterprise goals. While maintaining a competitive compensation plan is imperative, there are other non-monitory benefits which can also boost morale.
Grab this opportunity with both hands
America currently produces 18.2 percent of the world’s manufactured goods compared to China‘s 17.6 percent(2), highlighting that the U.S’s manufacturing potential is not to be ignored. There is a huge opportunity currently for businesses and employees to harness the investments being made by international companies, along with the growing near-shoring trends. By viewing talent as the linchpin to success and taking the critical steps to strengthen short, mid, and long-term recruitment planning, organizations will enjoy a competitive advantage and brighten their outlook for the future, while enhancing the business climate for the region as a whole.
Mr. Roche is the Sector Leader for Futurestep’s Industrial Markets for North America. Based in the Atlanta office of Korn Ferry International and a member of the firm’s Industrial Products & Services Practice, he has conducted senior-level executive search assignments for both privately held and publicly traded industrial products companies, in roles ranging from President to Operations and Supply Chain. Mr. Roche has also worked extensively with private equity firms to upgrade talent for both portfolio companies and operating partner roles. Prior to joining Korn Ferry, Mr. Roche served as Project Manager for SteelFab, Inc., one of the nation’s largest structural steel fabricators. His responsibilities included overseeing the financial management for the structural steel scope of large commercial projects including P&L, schedule concerns and design elements. At SteelFab, Mr. Roche worked closely with many of the Southeast’s largest developers on office, mixed use, retail, medical, and municipal projects. Mr. Roche served three years as a legislative assistant for a United States Senator. A native of Charlotte, North Carolina, Mr. Roche graduated cum laude from North Carolina State University.
 Is US Manufacturing Making a Comeback? worldtonyc.com/us-manufacturing-making-comeback/
 National Association of Manufacturers and World Bank. www.nam.org/Statistics-And-Data/