4 Challenges Affecting Hiring In The Manufacturing Industry

It’s no secret there is a shortage of skilled workers in the manufacturing industry. In fact that is the number one challenge manufacturing industry employers continue to face in 2018. There are 12.5 million manufacturing jobs in the U.S. with an average salary of just over $82,000 per year, according to The Balance. Despite this opportunity and good pay, over 600,000 jobs still remain open. In fact, according to the 2016 Global manufacturing Index by Deloitte, 3.5 million manufacturing jobs will open up in the next 10 years – but 2 million of those may go unfilled.

That presents several hiring challenges for employers. Here is a look at some of those challenges:

1. Manufacturing industry labor shortage

There are many reasons employers face hiring challenges, but the most obvious is lack of skilled workers. At some point, and for some reason – mostly because of unfair/incorrect stereotypes that working in a factory or manufacturing jobs meant working in a dirty factory with poor working conditions. Due to this, today’s high school student, college student, college grad and millennial just isn’t interested in working in the manufacturing industry. It’s not nearly as cool as the high-tech sector and doesn’t give the chance to create the next great thing like Google, or an app.

But that’s what frustrates manufacturing employers: Manufacturing and technology go hand-in-hand – and manufacturing companies across the country are creating some of the most innovative products in the world – using the latest and greatest in technology.

Yet, despite good pay, a good job outlook and good working conditions in state-of the-art facilities, jobs remain open.

So what can employers do? Many have created partnerships with local high schools, colleges, and trade schools to showcase manufacturing careers – showing just how much technology is impacting and creating opportunities in manufacturing. In addition, employers can invest more in training. As the Deloitte report pointed out, areas such as cyber security and robotics are growing, and more job opportunities are opening up in these areas within the manufacturing industry. Training current employees or developing training programs in these areas can help recruit new workers to manufacturing.

Attitudes towards manufacturing are shifting but it’s going to take even more time to get more people interested in manufacturing careers. When that happens, it will only benefit both employers and employees. But for employers, it needs to happen now.

2. Role of technology affecting recruiters and HR

Another challenge is that manufacturing companies need to hire not just people, but the right people. Small manufacturers with small HR departments can’t always keep up with an industry changing so fast. What’s more, these same HR departments may not be skilled or trained in hiring for new technology and manufacturing jobs. So they may make the costly mistake of hiring the wrong person, someone with the wrong skill set, or someone who doesn’t fit the company culture.

The solution?

Partner with a staffing firm to do the recruiting and hiring. Staffing firms have a pipeline of skilled candidates they can choose from, and recruiters from these firms have the industry expertise and knowledge to hire the right person the first time. They get to know the employers they work with, their needs, and the type of employee that would be successful with each company. They understand the specific skills needed for each job, the personality or type of person that fits, and can then recruit or search for candidates with those skills.

This saves money on bad hires (which can exceed $240,000 according to the SHRM), and keep in-house HR staff focused on the HR side of the business. This lessens their workload, helps them get more done, and helps the company find the right hire. Since the staffing firm can conduct a solid search, find skilled talent, and make the right hire. In fact, making that right hire in the manufacturing industry can actually help your company make money by staying ahead of the competition. One annual manufacturing survey of 650 manufacturing professionals said 39 percent of manufacturing companies expected to hire a staffing agency to assist with recruiting and hiring needs in 2018. It would not be a surprise to see that number grow in the coming years, starting now.

3. Analytics and big data

Like it has in every industry, analytics and big data continues to play a role in manufacturing. Employers are using analytics to capture data and drive decisions. Again – another area where technology is playing a key role in manufacturing.

Many manufacturing companies are advanced in using data-driven intelligence, while others simply are not, or simply can’t make the transition to analytics-driven focus because of lack of skilled workers to fill these positions. So they stick with old models that work, but don’t perhaps help the company become as efficient and productive as they could be.

As Manufacturing Business Technology magazine pointed out “Done right, analytics yields insights to improve every aspect of manufacturing, from engineering and design to production, machine utilization, workforce productivity, supplier performance and demand forecasting. It can mean better products, lower costs and faster time to market.”

4. Tax reform and tariffs

In September, President Trump told the National Association of Manufacturers that tax reform would help manufacturers produce more, invest more, and create more jobs. But in March, President Trump also announced tariffs would be implemented on imported steel and aluminum, leaving many manufacturers in those industries perplexed at just how this would affect business, and ultimately, hiring.

So, decisions made in Washington are creating a trickle down affect, and no one quite knows how this will affect hiring now, and in the future. Because of this, some employers may take a wait-and-see approach before kicking off new initiatives. Bottom line: Since companies aren’t sure on how tax reform will help, and how steel and aluminum tariffs could affect (read between the lines: hurt) business, they may choose not to focus on hiring.

There are many challenges affecting hiring in the manufacturing industry. These above are making an impact in 2018, and will continue to in the coming years ahead.

Is your manufacturing company needing the right talent? Contact Reliable Resources today to see what roles we can help you fill!

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