Thank you to the experts across the MEP National Network whose work inspired this document.
As part of the annual NIST MEP survey, we ask clients from the 51 MEP Centers to identify the top three challenges their companies will face over the next three years. We use a predetermined list of challenges, which allows us to track responses over time. We've asked this question for over a decade and thousands of clients have taken the time to give us their thoughts.
Not surprisingly, manufacturers continue to report that employee recruitment and retention are their greatest challenges. In fact, these concerns have heightened during the COVID-19 pandemic and subsequent workforce disruptions. The market forces driving these challenges are not likely to improve soon. Based on a Manufacturing Institute and Deloitte study, the National Association of Manufacturers estimates that manufacturers will need to fill 4.6 million jobs by 2028.
In this guide, we outline steps that will help you improve and enhance your employee recruitment, retention and engagement. We’ll look at:
Manufacturers are experiencing incredible workforce disruptions – some unthinkable just a couple years ago.
Some manufacturers have seen a brand new employee fail to return from their first meal break on their very first day on the job. If this happens, you have to ask yourself how your hiring process resulted in someone who was such a poor fit. Besides figuring out what went wrong when someone leaves unexpectedly, it's important to consider the other side of the equation – what about your firm makes people stay.
This guide will show you how to become an employer of choice that lives up to the adage that your people are your most important asset. Introduction
Your shop had to become more adaptive and responsive in operations during the pandemic. Take a similar approach to hiring and developing your people. The principles that apply to lean manufacturing and continuous improvement in production processes also apply to recruiting, managing and assessing your employees' performance.
Systems thinking focuses on how different parts interrelate and how systems interact through various connections and feedback. Systems thinking helps you see connections holistically through:
Barry Richmond, a leader in systems thinking and system dynamics, emphasized that people embracing systems thinking will position themselves so they can see both the forest and the trees – and keep an eye on each. What does this look like? Let's consider a common example: when a manufacturer experiences a higher attrition rate in one department than others. You might naturally assign blame to the hiring process or failure of the talent pipeline. You might look at what's different about the front-line oversight or working conditions. But there could be many other factors that influence the negative outcomes, such as:
The reality is that people working within systems frequently miss the signals these systems rely upon. They may not be as apparent as one machine's impact in a production line. Look at how people and systems communicate with each other. What signals does training send to recruiting – and vice versa?
More questions to consider:
Systems thinking and culture change are long-term commitments. Systems thinking helps you grapple with both operational and strategic challenges. Here are some persistent challenges facing many small and medium-sized manufacturers:
If a culture of continuous improvement exists in your company's operational side, it should be easier to break down the silos and look at your employee development as a system as well. Just as you collect data on the operational side, you can identify feedback loops and system structures, and begin collecting data to improve your employee development system. There are five interdependent functional areas to consider:
For example, a well-structured training program will allow you to generate development pathways. If you give your people – both new recruits and seasoned staff – clearly articulated development pathways and career ladders, they'll have a common understanding, which ties into performance management and retention. This will drive demand and expectations in many areas, such as:
If dozens of job seekers viewed your most recent job listing but few applied, it means either your listing wasn’t attractive to them or you didn’t reach a broad enough audience.
Every job posting and interview is a chance to tell prospective employees why they should want to work at your company. Every step from the way you post open positions to how you conduct exit interviews presents an opportunity to cultivate your company’s reputation as a great place to work – a place that attracts and retains employees. With a shrinking talent pool and more competition for skilled workers, how your company is perceived by job seekers is more important than ever.
Diversity, equity and inclusion play a critical role in attracting and retaining employees. Diversity takes many forms – race, ability, age, gender, nationality, socioeconomic status and more. The case for increasing diversity in every industry is clear. As McKinsey has written extensively, "Companies in the top quartile of gender and ethnic diversity were 25% and 36% more likely to financially outperform those in the bottom quartile, respectively." Moreover, the pandemic has disproportionately displaced workers of color, and connecting displaced workers to higher paying job opportunities in advanced manufacturing is a win for the worker, for the company, for our economy and for our society overall.
Potential employees need to know why your company is a great place to work. Don't simply list position requirements on a job posting. Instead, describe your company's culture. Describe why a potential job seeker will find meaningful employment with your firm while becoming part of an engaged and mission-driven team. Conduct an objective assessment of how your company is described on websites such as Firsthand, Glassdoor and LinkedIn. It is important to update and refine how your company appears to applicants.
When writing job descriptions and spreading awareness of career opportunities, companies must articulate the potential for career advancement. Candidates are more engaged when they see their career path provides room for growth and consistent improvement.
Even when companies are not searching for new employees, hiring managers should always keep an eye out for new recruits. This should be an ongoing process for companies looking to attract prospective candidates.
The major talent gap in the industry exists because most college students and young professionals are unaware of attractive career paths in manufacturing. Many college graduates don't realize the opportunities that exist and what today's manufacturing jobs pay.
To overcome the shortage of qualified workers, companies should promote manufacturing career opportunities throughout their community. Manufacturing Day, the first Friday in October, is a great way to showcase the reality of modern manufacturing careers by opening doors to students, parents, teachers and community leaders – to give a glimpse at what today's manufacturing really looks like and inspire the next generation of skilled workers.
It's natural to hire people you think will be a good fit based on procedures, environments and cultural norms. Unfortunately, this often ends up excluding good people. For example, do you eliminate prospects who rely on public transportation or have child care needs? Do you require new hires to be fluent in English? If they can be trained to do the job, should it matter? Do you exclude applicants who were previously incarcerated? Many people turn their lives around and become contributors to society when given the chance.
Sometimes companies abide by outdated policies or rules that have unintended consequences. For example, some manufacturers check applicants’ credit to reduce the risk of theft. However, job seekers may think their poor credit disqualifies them for the job – so they don't even apply.
Rethinking "good fit" through the lens of inclusion and access will expand your potential employee pipeline. It opens up more places for you to look for employees.
Remember the other side of the coin – a good fit is also important to prospective employees. If they don't see people like themselves, will they be comfortable sharing their ideas or concerns? If management lacks diversity, will they see a viable career path?
Ask yourself if those credentials are really needed. Many of today’s excellent job training programs teach career based skills such as CNC machining in as little as 16 weeks. Higher education institutions offer programs for career paths in marketing, analytics, IT and cybersecurity with similar timeframes. If employees can learn these skills in the equivalent of a college semester, why limit your prospect pool from the start with an education requirement?
Similarly, requiring related experience can be extremely limiting in today’s job environment. Instead, look for transferable skills and what can be taught in-house.
Research shows people are not just looking for a job – they want a career. Companies that offer training and professional development during work time send a clear message that they value their employees' futures.
Research also shows that employees value flexibility. Consider offering remote opportunities when possible and options like four-day work weeks. Offer shorter work days that accommodate your employees' child care – a common employment hurdle for many parents.
Employees value incentives and perks that help subsidize their personal expenses such as transportation, food and tools. Consider providing:
Employee turnover is a reality for every business. However, intentional employee training and development practices help minimize the impact of turnover. At the same time, these practices help make your company more profitable and your managers less stressed.
Why is this so important? Numerous studies document the cost of employee turnover – as much as 50-150% of base salary, depending on the level of the position in the organization! Consider this:
The first 90 days are the most vulnerable period of the employer/employee relationship. Effective onboarding of new employees helps create an engaged workforce from day one. Give your onboarding program a structure that provides useful milestones, mentoring and maybe even wage progression. Once you have hired people, it’s important to work hard to keep them.
To create a successful onboarding program or enhance your existing program, examine how new employees are trained when they join the company. Identify 5-7 new hires who have at least 6-9 months experience with you. Ask them to identify things that were the most difficult to learn. Ask for ideas about how to make the training less complex so they could achieve higher productivity levels sooner.
Create a mentoring program. Mentoring is a proven approach that enhances learning and development for both mentees and mentors. Make sure each new employee is teamed up with a more experienced person in the same department – someone who is a strong supporter of the organizational culture.
Investing in your workers' professional and personal growth demonstrates that you genuinely care about their future. From certification programs to associate degrees, there are many affordable options for providing educational opportunities for your employees.
Other keys to a successful training and development environment include:
Align existing skills in your workplace with skills needed for current and future business growth. By mapping operations to the workforce, and then to your business plans, your company will have a clearer understanding of the investments you need to make in your workforce. There are proven workforce training programs to do this, including:
The best path to process optimization for a group of new employees who have never been in a manufacturing environment may be a program that covers the fundamentals of lean manufacturing and workplace organization.
A TWI program will not only provide the efficiency and speed required to get people into the right job roles and adopt new technology, but will also help top performers grow into supervisory roles.
The big wins in improving processes will come from a program that guides people through a problem-solving process to discover root causes of issues and stop the cycle of putting out fires with quick fixes. Grow your team while you grow the business.
An employer of choice is a company that candidates seek out for employment opportunities.
The defining characteristics of an employer of choice are:
Creating a positive workplace culture that successfully attracts and retains talented people will not happen by chance. The best employers truly believe that employees ARE their number one asset – without exception. Local workers choose to work there over other options.
How do you know if you are an employer of choice? Your employees tell you through their loyalty, high retention rates, and especially when they encourage others to work for your company.
You are competing with many industries and companies to fill entry-level positions. How are you positioning yourself? How does your entry-level pay compare to other industries? How often do you measure employee morale or satisfaction?
Here are five best practices for becoming an employer of choice (you'll recognize many of these tips from other sections in this guide).
Gathering the information to build a great company culture involves collecting both quantitative and qualitative data.
You can use a third-party survey to collect quantitative data. Survey topics can give you a wider company perspective – for example, whether people are held accountable for low performance. Surveys can also give you insight into your employees' personal views – for example, whether they find personal meaning and fulfillment in their work.
Employers of choice tend to take these follow-up actions after conducting surveys and focus groups:
Here are five key principles to meeting your employees' personal needs, according to Development Dimensions International:
Two other considerations:
When you travel to work each day, what things do you look forward to?
What are you learning here?
Why do you stay here?
When was the last time you thought about leaving our team? What prompted it?
What can I do to make your experience at work better for you?
Many manufacturers don't realize how important the wording of each job posting is for attracting applicants. Research competing job postings, not just in manufacturing but in other industries competing for the same people. Ask your marketing team to help with the postings.
Employers of choice often include these elements in their job postings:
And by all means emphasize continuous improvement in job postings. How do these two examples sound to you? Where would you rather work?
"Setting objectives and reviewing shift's performance versus objectives" or "Fostering an environment of continuous improvement by inspiring employees to problem solve within their work cell."
Things like the local labor market are out of your control. But other employers are dealing with the same challenges.
What's in your control? Create a culture of learning where training is foundational. Create development pathways so employees see themselves on a journey and feel confident that there is a role for them.
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