August 13, 2018 Winning the war for talent

Manufacturers must prioritize recruitment and workforce development to compete effectively in the ongoing war for talent.

By Joy Duce, Sikich

Manufacturers’ ongoing struggle to fill open positions is starting to impact their ability to service their customers effectively. Manufacturers cited a lack of qualified workers as the top barrier to growth in 2018, according to Sikich’s 2018 Manufacturing Report. And there are no signs the talent gap will shrink any time soon.

Manufacturers must respond to this challenge. The companies that fail to attract skilled workers and develop talent internally will struggle to remain competitive. Now, more than ever, companies must consider workforce development a top business priority and proactively work to attract and retain talent. Fortunately, there are several key strategies manufacturers can deploy to build a strong team of employees for years to come.

Put the resources in place

To improve recruitment and workforce development efforts, a manufacturer needs to put in place a strong human resource team. An adequately staffed team should include one human resource professional per every 50 employees. If a manufacturer cannot afford a full in-house team, it can outsource its HR functions. HR consultants can handle everything from recruitment to management of compensation and benefits. This model allows manufacturers to have access to senior level human resource expertise without the cost of a full-time salary and benefits.

Without a robust HR team in place, a manufacturer will not have the time or resources to effectively conduct talent searches. Sikich’s Manufacturing Report found that 77 percent of respondents require three to eight-plus weeks to fill an hourly position. While some of this delay can be attributed to the talent shortage, it could also be the result of inefficient HR practices. A fully staffed team that recruits on an ongoing and proactive basis will be able to fill open roles quicker and more effectively.

Manufacturers should also work to build relationships with high schools and trade schools. In the Sikich report, only 3 percent of respondents said they recruit at the high school level. By exposing prospective recruits to the industry early in their careers, manufacturers can reach the next generation of talent and highlight the benefits of a manufacturing career.

Focus on current employees

Along with proactively recruiting new talent, it is important for manufacturers to develop skills in current employees. Sikich’s survey found less than a fifth of manufacturers are growing talent from within with training and development programs. A lack of internal training often leads to increased turnover – employees who do not see an opportunity for growth will look for career development at competing companies that offer advancement opportunities.

Manufacturers should prioritize skill development and ensure employees have a clear understanding of their career paths. Internal training can help soften the blow of a senior employee leaving or retiring, as junior employees will have many of the skills required to take over the job.

While a training and development program requires investment, it is much more cost-effective than having to replace highly-skilled members of the workforce through lengthy job searches. These programs also often boost employee morale and create excitement for potential growth.

Get creative to retain experienced employees

Manufacturers willing to get creative in their talent management efforts will see long-term results in retention and ensure a smoother transition from one generation of employees to the next.

Manufacturers often find themselves in crises when multiple senior workers retire at the same time. They not only have to fill numerous roles, but also lose the knowledge and skills that these employees have acquired over the years. A program that allows these valuable employees to transition to “semi-retirement” with a part-time work schedule can help bridge the gap between generations and allow them to pass on their extensive knowledge to younger workers.

As part of this flexible scheduling, manufacturers can incentivize these experienced employees to train new hires. For example, a senior employee may receive a bonus if a younger employee assigned to her passes a key skills assessment test.

It’s also important that manufacturers value former employees. These alumni can be a company’s best cheerleaders or worst critics to individuals looking to join the organization. A company should do its best to ensure an employee’s exit is as courteous and smooth as possible. A negative exit experience could give the employer a bad reputation in the recruitment marketplace.

Manufacturers should perform exit interviews to understand why employees are leaving. Exit interviews can help the employer identify and address any operational or management deficiencies. For example, if several employees who worked under a particular manager departed, the manufacturer may need to implement leadership training for that manager. Or, if the departing employees worked on the same machine on the plant floor, the company should consider maintenance or an upgrade. Backed with information from exit interviews, manufacturers can make necessary changes to help them retain current key employees.

With the war for talent only getting more competitive, manufacturers can’t afford to be passive when it comes to talent recruitment and development. A company that makes improving its workforce a corporate priority and devotes necessary resources to it will build the strong team of employees it needs to succeed.

About the author
Joy Duce is partner-in-charge of Sikich’s human resources consulting services practice. Contact her at joy.duce@sikich.com.

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