The next decade is primed to see a monumental shift in the world of manufacturing, and experts warn that the skills gap will cause an incredible shift in the workplace.
According to a report from The Manufacturing Institute and Deloitte, over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled, but 2 million of those jobs face remaining vacant, a potentially industry-changing shift.
There are a handful of major contributing factors to this gap, the report finds:
- Baby boomers (born between 1946 and 1964) are retiring rapidly
- Industry-wide economic expansion
- Shortage of skilled workforce
- Loss of embedded knowledge from retiring workers
- A negative image of the manufacturing industry among younger generations
- Lack of STEM (science, technology, engineering and mathematics) skills among workers
- A gradual decline of technical education programs in public high schools
Today, employee retention programs need a multi-faceted approach to keep team members engaged and involved. As the skills gap grows, that retention is more important than ever. Losing a team member to the competition could potentially mean a niche expertise goes out the door along with them.
However, as a Deloitte University Press study finds, a focus solely on retaining those employees may be misplaced. Companies should shift from strategies that merely “hold” people in place to strategies that attract and engage people through measures that provide a work culture of development and growth.
Appreciating the Whole Employee
A study by the Association for Psychological Science found that happiness is not just a self-centered pursuit—it’s tightly correlated with other benefits that can help close the skills gap.
According to the study, happiness has been associated with numerous positive outcomes, such as relatively more pro-social behavior, productivity and cooperation at work. Thus, happiness not only feels good, it is good—both for the individual and his or her employer.
They’re not the only group who notes the correlation between engagement and retention. According to a Gallup article, research shows that concentrating on employee engagement can help companies withstand—and possibly even thrive—in tough economic times.
While an employee engagement program is designed to keep your people engaged and retained, it also has a secondary benefit: attracting people to your company.
When you build a company culture and appreciate the whole employee, you not only keep key employees at your company, but you attract others to your company as well.
Your people are more likely to submit employee referrals if they like where they work. When quality applicants are finding you—not the other way around—recruitment costs stay low. And, research shows, employees that come from referrals tend to be of a higher quality.
On top of cutting recruitment costs, keeping employees in place provides huge savings on employee replacement. According to research from the Society for Human Resource Management, turnover costs are estimated to be 100%–300% of the base salary of replaced employee.
Manufacturers simply can’t afford these costs on top of other economic pressures.
The statistics don’t lie: company culture is important for the younger demographic you need to attract and for the overall health of your company.
- 94% of executives and 88% of employees believe a distinct workplace culture is important to business success.
- The likelihood of job turnover at an organization with rich company culture is a mere 13.9 percent, whereas the probability of job turnover in poor company cultures is 48.4 percent.
For a positive, vibrant culture, companies must take into account varied perspectives and interests. Offering your people holistic solutions will drive measurable impact throughout your company. An effective engagement solution should be able to target a number of key areas that affect the health and wellbeing of your employees, all while capturing the attention of your people.
To best motivate and engage with their employees—and keep retention levels high—employers must focus on a holistic solution that rewards top performance.
Finding the Right Solution
So, what exactly is a holistic solution? And how does a holistic solution drive measurable impact throughout a company?
A holistic solution is one that embraces the whole employee, both on and off the clock. To create a holistic solution, employers need to look at ways to incentivize performance metrics parts of a whole.
Statistics show that the more employee programs a company offers—and the more varied they are—the higher the perceived rate of employee engagement, motivation and satisfaction. When manufacturers combine an appreciation for the whole employee and embraces culture with a powerful, holistic engagement solution, they’ll reap the rewards—and better jump the skills gap.
To get the best results, employers should offer a solution that focuses on five key areas:
- Performance. Incentivize sales goals, productivity goals and whatever else your teams do on the job to perform.
- Career. If performance looks at the immediate, career rewards performance in the long term: tenure awards, training, safety courses or anything else that celebrates deep-rooted efficacy.
- Wellness. It’s the way your employees create a secure and well-balanced life—physical, financial, spiritual, and emotional balance.
- Social. It’s great to get noticed by your manager for your hard work, but being recognized by your peers is key, too. Think peer-to-peer awards, spot nomination, above-and-beyond recognition and more.
- Community. Your company is a part of your community. Appreciate your employees for the ways they improve it—employee referral, volunteerism, eco groups and more.
Employers should consider a consolidated technology platform that addresses these areas of focus in a strategic way, streamlines administrative expenses and improves financial results—and gets the most out of their people.
“Embracing the diverse makeup of their ever-evolving employee base is rapidly growing more important for manufacturers,” said Victor Hailey, automotive sector vice president for ITA Group. “They must implement solutions to address the diverse needs of their cultures, and companies that do will benefit from a retained, engaged and high-performing audience.”
About Maggie Wenthe
Maggie has spent more than 15 years in incentives, recognition, marketing and merchandising. As the Incentive and Recognition Solution Manager at ITA Group, she analyzes market trends to develop world-class solutions that help Fortune 1000 companies motivate and engage their employees and channel partners. In addition to having achieved the Incentive Professional designation from the Incentive Marketing Association, she has designed high-performing incentive and recognition program strategies for many ITA Group clients.