Forget the skills gap. It’s time to address the perception gap.
The time is now for a manufacturing makeover. Faced with a dire labor shortage, an aging workforce and the need to digitally transform in order to compete, today’s manufacturing companies must focus on closing the perception gap, not just the skills gap. Doing so involves reimagining its organizational culture.
While the U.S. manufacturing industry has experienced tremendous net growth over the last couple of decades, it is now challenged to face a serious workforce shortage which can impede continued growth. Consider that a National Association of Manufacturing study revealed that 2.4 million manufacturing jobs could go unfilled between now and 2028. Manufacturers are feeling the pinch more than most as they also face the consequences of an aging workforce. A Society of Human Resource Management report reveals that 27% of manufacturing workers are set to retire over the next ten years, taking their specialized skills and institutional knowledge with them.
Moreover, the manufacturing industry still struggles with an image problem. Too often, the very talent it is trying to attract has a negative perception of working in the industry. A study by the Fabricators and Manufacturers Association found that among U.S. teens, 52% expressed little or no interest in a manufacturing career. When asked why, the respondents said, “Manufacturing was a declining field, with unprofessional, dead-end jobs, dirty factories and frequent layoffs.”
Even parents take a less-than-optimal view of the industry as a career choice for their kids. As reported by the National Association of Manufacturers and the Manufacturing Institute, “only 3 in 10 parents would consider guiding their child toward a career in the field.”
To address these challenges, manufacturing companies are investing more in their organizational culture, allocating more resources to worker engagement and development. Doing so requires manufacturers to move behind their traditional mindset and understand the value of worker-friendly concepts.
“Overall, the industry needs to change the perception of manufacturing,” said Jeff French, Grant Thornton National Managing Partner, Consumer and Industrial Products. “There has to be a big change in that area. Companies need to create an environment that looks and feels like what they are talking about.”
Grant Thornton’s Return on Culture research found that indeed there is work to be done when it comes to organizational culture. Manufacturing executives are least likely to say that their culture is healthy or facilitates innovation.
“The industry needs to change the perception of manufacturing. Companies need to create an environment that looks and feels like what they are talking about.”
The industry, however, is working to make inroads in transforming its culture. The National Association of Manufacturers is focusing on initiatives that would facilitate gender diversity in the workforce and transition individuals out of the military into manufacturing jobs. Broadening the traditional workforce will serve to make the manufacturing industry more inclusive and representative of the population.
According to a recent Gallup survey, the State of the American Workplace, workers at manufacturing companies are the least engaged in their work — a full 8 percentage points behind all other industry sectors. Manufacturing workers want what they perceive their friends and family working in other industries have: more empowerment and flexibility at work, including the ability to set flex-time hours and customize their job role to better fit their needs.
One of the ways that manufacturers are working to change the negative perception among both prospective job candidates and the existing workforce is to transform the physical working environment beyond the stereotype of the typical gloomy factory floor. Increased investments in this area include not just the actual physical space but also the tools, equipment and safety measures that are part of the work environment.
Revamping recruitment strategies
One critical way that manufacturers are overcoming the stigma of factory workplaces is by focusing on the importance of technology in recruitment pitches. Communicating a commitment to digital transformation that includes a focus on automation and robotics can help to recruit needed talent.
According to a Microsoft and SurveyMonkey poll, 93% of millennials consider having up-to-date technology an important factor when choosing a job. That’s why it’s critical that manufacturers transform not only their manufacturing processes but their recruitment efforts with technology.
General Mills, for example, uses a virtual reality experience to give candidates a realistic look at what it would be like to live in Minneapolis and work at the company headquarters. Recruiting strategies like this demonstrates a commitment to digital transformation and creates opportunities to share more about your company’s use of technology.
Saint-Gobain, a manufacturer of innovative building material solutions, has had to adopt proactive approaches to recruit talent, particularly in rural locations. Its recruitment strategy focuses on touting positions in which employees can design their own career and taking advantage of pilot programs that incorporates a holistic approach to people and families.
Recent ad campaigns from Caterpillar Inc. and Koch Industries are solid examples of manufacturers investing in their brands in order to change perception. While Caterpillar’s “Let’s Do The Work” campaign helps bring a human face to the company, Koch’s ad campaigns “Challenge Accepted” seeks to explain what the huge conglomerate does while differentiating the company from its founders’ political views.
Boosting benefits of aging boomers
Cultivating a healthy culture that will help to both recruit and retain employees doesn’t just involve a focus on Millennials and Gen X talent. With many employees in the manufacturing sector aged 45-65, companies need to implement strategies that connect and empower all generations of workers.
To address worker shortages, more manufacturers are encouraging potential retirees to stay on, enticing them with flexible schedules, job sharing, short work weeks, and work-from-home opportunities.
As part of its “Today for Tomorrow” project, BMW began retrofitting sections of its factories in Germany, installing flooring that is easier on the joints, and purchasing ergonomic chairs that telescope (an alternative to standing all day). They even provided orthopedic shoes to older workers. The company also brought physiotherapists into the factories to advise workers on stretching, ergonomics, and nutrition.
In addition, BMW paired old and young workers alike on the assembly line. According to the BBC, BMW initially invested about $45K in the program and experienced a 7% increase in worker productivity. Since then, BMW has implemented the program in factories around the world.
Fostering a more progressive culture:
Manufacturers can revitalize and reimagine its organizational culture to better recruit and retain critical talent. Following are some incremental changes traditional manufacturers can implement to foster a more future ready culture:
Re-evaluate recruitment strategies:
- Proactively highlight the benefits of a manufacturing career.
In recruitment materials, incorporate stats that indicate the stability and growth potential a manufacturing career offers. For example, manufacturing has the highest average wages of private sector industries ($81,289) and the highest tenure for workers (9.7 years).
- Highlight the role of technology in manufacturing.
Communicate the array of new technologies being adopted in the industry including advanced robotics, AI and AR/VR devices. Generating awareness around the state-of-the-art technologies and innovation upon which manufacturing relies can serve as a compelling recruitment strategy.
- Re-evaluate your approach to job postings.
Carefully craft job descriptions. Include specific language that communicates an evolving career with room for growth. Other key benefits like work-life balance and flexible work arrangements can also help to attract talent.
- Provide opportunities for learning.
Today’s emerging workforce is laser focused on developing skills in their jobs. Invest in internships, apprenticeships and certification programs to help recruit and develop early career employees. Consider partnership with schools to educate students about manufacturing careers, emphasizing the opportunity to produce products and be innovative through the use of advanced technologies. Additionally, seek out untapped, nontraditional or underutilized labor pools like veterans, individuals with disabilities or dislocated workers. Remember to focus on both technical and soft skills and develop competency-based training programs to enable creation of a roadmap for cultivating the next generation of manufacturing workers.
Ways to improve retention:
- Implement mentorship and rotational programs.
Consider offering mentorship programs which can be conducted one-on-one, with group classes, or online. Boeing’s mentorship rotational program allows young engineers to develop their skills by working with new teams every six months on projects at different points in the product lifecycle. Participants may have the chance to complete assignments in technology development, product definition, hardware/software support, and more. Other companies are developing cross-functional mentorship programs to provide workers with opportunities to gain experience of key business areas like sales, commercial operations, product management or application engineering.
- Skip the traditional annual review.
Instead, promote a culture of engagement by providing regular feedback, both formal and informal. Consider video calls for remote employees or to connect with divisions in other locations. As the number of direct reports per supervisor increases, communicating regularly through multiple means is critical to fostering employee engagement.
- Facilitate idea sharing among all levels of workers.
Identify mechanisms for sharing ideas to improve the business. Online forums or other tech-based platforms provide a way to communicate ideas, crowdsource suggestions and prioritize ideas to revisit later. Such mechanisms are especially important for the industry that is challenged by cultivating a healthy culture in a highly decentralized environment. “Manufacturing companies have a lot of part-time and temporary employees,” French said. “It’s a challenge to effectively communicate and facilitate improvements in culture with a broad mix of workers.”
- Invest in health and wellness.
Increasingly, leading manufacturing companies are incorporating a focus on health and wellness programs into their benefits packages. Arthrex, a $1.5B maker of surgical products covers 100% of worker health and dental benefits, reimburses gym memberships and provides on-site medical facilities. EOG Resources, a $144B oil exploration company offers fitness reimbursements of up to $300 a year. Still other companies invest in ergonomic furniture or work stations to help prevent injury on the job.
Engaging the aging workforce:
- Launch a co-mentoring program.
Match an employee from an older generation with a younger team member to understand work culture and processes. The younger employee can help his/her partner manage technology and new tools at work. This can help improve communication and training for all ages of the workforce.
- Focus on capturing tribal knowledge.
Consider implementing standard work instruction software to create training materials quickly, capture tribal knowledge, and distribute revisions without delay. Such systems enhance learning through the inclusion of photo, videos and other instruction allowing for easy communication of complex procedures.
- Incentivize participation of senior staff.
Consider incentivizing senior workers to participate in cross-generational mentorship programs. Financial or intrinsic rewards such as recognition awards can help increase participation and engagement.
“Manufacturers are very good at setting goals such as safety, quality, efficiency, on-time delivery and measuring against those,” Grant Thornton’s French explained. “They do that really well but need to focus on communicating to workers how their roles impact the big picture. Employees need to understand how their role helps in achieving increased quality and linking operational KPIs with the overall business strategy.”
Ultimately, reimagining manufacturing with a culture transformation takes time. But many manufacturers are benefitting from taking a long, hard look at how their cultures are positioning them for growth—now and in the future.
Jeff T. French
Partner, Audit Services
Jeff T. French is an audit partner in the Dallas office and former national managing partner of the Consumer and Industrial Products practice.
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