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Strategies for Overcoming the Skilled Labor Shortage in Manufacturing

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Skilled labor is critical for manufacturing.

Manufacturing, especially manufacturing at scale or complexity, is a complicated process. That widget can’t be built by anyone, otherwise there wouldn’t be a market for it. To build it correctly and for a reasonable cost, you need to have specialized skills on hand. You need skilled labor.

We’ve addressed the skilled labor shortage issue in the past. Manufacturers have long struggled with attracting, retaining, and hiring new workers. Today, with the current labor problems and work environment, the shortage has become an even bigger challenge. Even with the supply chain concerns and continuing pandemic-related disruptions, it has become the leading concern for many manufacturers.

The Current State of Skilled Labor in Manufacturing

Since the massive dip in orders due to COVID-19 and quarantine restrictions, new orders for manufacturing have skyrocketed. Orders are now higher than they were in 2018 and 2019, with many manufacturers struggling to keep up with the demand.

Some industries are struggling with a tremendous backlog. Consumers are hungry for new products, and in the wake of a rapid vaccine rollout, this has given way to more opportunities and expanding markets.

As orders and demands surge, businesses are also dealing with workforce changes. In April 2021, more than 4 million workers resigned from their job according to the U.S. Department of Labor. Burnout, a reassessment of priorities during a global pandemic, shifting values between work and home, and the continual downplay of health risks by employers who demand workers return to the office are cited as reasons for employee resignations.

The Changing Dynamics of Employment and Skilled Labor

This has become known as the “Great Resignation.” The dynamics between employer and employee have changed. Employees, especially skilled employees, recognize that they have options and choices when it comes to their career. They no longer feel locked into a single employer, and many are prioritizing their personal lives, mental health, and overall well-being over their job.

For manufacturers struggling to attract new graduates and young workers, the Great Resignation has exacerbated an already challenging problem.

The Struggle to Find Skilled Labor for Manufacturers

When it comes to hiring, employers have come to the realization that finding a new employee isn’t as simple as posting a job. There’s competition for talent and skilled labor, especially in manufacturing. The employer needs to attract and convince a potential employee much more than they did in the past. No longer can a manufacturer expect to quickly find and hire the right person to fill a gap. More than ever, manufacturers need to secure and protect two of their most valuable assets – information and workers.

Steps need to be taken to secure expertise and collect and manage critical information for production. You need to streamline the onboarding process for new employees to minimize disruption when skilled labor is lost. You need to better support your current workforce to reduce the need for new hiring. You need to recognize and address the need to attract and retain skilled labor.

It may seem daunting, but there are steps you can take to protect your business right now.

Tips for Overcoming the Skilled Labor Gap in Manufacturing

Over-hiring skilled labor is a sign of a deeper problem in manufacturing processes. Continually hiring additional team members rather than addressing the underlying problems is ultimately self-defeating. Instead, look at increasing efficiency, eliminating problems with the data and information used in production, and document best practices for skilled labor.

Let’s look at a few actionable steps you can take to overcome the challenges of the skilled labor shortage.

Eliminate Information Silos and Protect Your Data

In manufacturing, data is valuable. Your ability to complete work, manufacture efficiently, and optimize production depends on accurate and timely data and information. Often, critical data is stored only in the mind and memory of a single employee, or it’s kept on a single computer desktop or in a problematic data base.See How You Can  Access and Search Critical Data

Take control and protect your data and information. Document your production processes to identify what information is necessary to complete work. Who has that information? Where is it needed? Are there gaps when information from a single employee or system could bottleneck production? Build or implement a system for storing, managing, and accessing data to strengthen production and protect your business.

Support Your Current Employees

Do your employees have everything they need to complete work and execute efficiently? Sometimes the best thing you can do to increase productivity isn’t hiring a new employee but helping current employees work smarter. Eliminate the challenges and problems holding them back so they can do more, then watch as productivity increases without increasing the payroll.

Often, it takes only a few small steps to unlock that hidden productivity. For example, with a more accessible digital system managing production, you can ensure your employees are working from the latest, most accurate information. Rather than looking for measurements in a paper build book, they have the files and instructions when and where they need it.

Identify and Solve Current Challenges

Companies will wait to address and solve problems thinking that there will be a better time to handle it in the future. Often, it’s the skilled labor tasked with “handling” the problems, leading to employee frustration and a management team that seems oblivious or uncaring.

By addressing the problems now, you are likely to see a quick boost to production capacity and an increase in employee engagement. It can also protect your business from the skilled labor gap by reducing your reliance on undocumented (or tribal) knowledge. For example, once you have visibility into your manufacturing processes and access to production data you can trust, you can identify bottlenecks in your workflow, or the machine causing quality escapes. Find those problems and implement solutions that make a real difference in employee satisfaction.

Leverage the Latest Manufacturing Technology

As an industry, manufacturing is struggling to attract young workers and new graduates. As the current work force ages, manufacturers simply don’t have younger workers to replace them. There isn’t an adequate pipeline or an effective way to transfer knowledge to new workers.Learn How You Can Better Control and Predict Production

A large part of the difficulty in attracting new workers and transferring knowledge is linked to dated manufacturing processes. The younger generations are used to working with technology. They’re comfortable with mobile devices, communicating via a digital landscape, and leveraging technology to make work easier. Receiving a paper build book and trying to work from a white board or spread sheet is not only inefficient in their eyes, but frustrating. Training and transferring knowledge become problematic, with many younger workers choosing a career that better suits how they work. Give your employees modern, efficient tools to do their work.

Streamline and Manage your Workflow

Work smarter, not harder. It sounds simple, but when you have scheduling information and real-time production data, you can make your schedule work better. You can make it work for you. You can optimize for the labor force you have.Learn More About  Digital Production Scheduling

With better schedule control and visibility, you can better leverage your current labor force. Process enforcement ensure employees read and follow work instructions, so they aren’t relying on past work or experience. Digital data collection can let skilled labor remotely review the work done, saving time and energy. With accurate scheduling, you can ensure your team is focused on the highest priorities and most critical work. This will also make it easier to onboard and train new employees, letting them focus on the work you hired them for rather than learning everything at once. It’s been proven that with the right technology a work force can double their output, eliminating some of the need for additional staff.

Turn the Labor Shortage into a Competitive Advantage

There is no quick fix or single solution to the skilled labor shortage facing manufacturing, but there are steps you can take to mitigate the challenge and continue to add value to your customers.

It starts with better managing your production data and information. You need to eliminate the undocumented knowledge, information silos and data bottlenecks that have long been endemic in manufacturing but are now creating the skilled labor problem a crisis.

Checklist for Protecting your Manufacturing Business from the Labor Shortage

Use this checklist to evaluate and consider the next steps for your business

  • Do I have a written onboarding process for new employees?

Document your onboarding process, including training. Plan how you will transfer critical information and training. The document should also include how and where necessary information can be accessed by new employees.

  • What undocumented knowledge, expertise, or siloed information could potentially impact production if I lose a skilled employee?

Start by looking at the entire production process to identify where critical information or expertise is used. Once you identify those points, see where and how the information is accessed. Look at ways to better record, manage, and share the information.

  • How quickly and easily can I shift human resources? How flexible and agile is my team, or am I limited by expertise bottlenecks in production?

One way to answer this question is to consider the “back-ups” you have in place if an employee is out for an extended period. Cross-training is one solution, but not optimal as it can leave the expertise and information inaccessible if you’ve lost multiple employees. With process enforcement through a digital production system or MES you can easily shift and move work with all the information an employee will need. Companies have proven how easily employees can move between tasks when they have complete and accurate information.

  • What systems do I have in place to support employees?

If hiring new employees rapidly isn’t an option, then you need to consider and implement other tools to handle additional work. Look at ways you can increase productivity without adding employees, including increasing individual productivity, or managing production schedules. With the right system in place, you can better manage additional work with the current workforce.

  • Do I have a talent pipeline or hiring process in place? How can I market my company to potential new employees?

It used to be hiring was as simple as posting the job. Now, you’re competing with other manufacturers and industries for talent. You need to “sell” your company to potential new hires, especially younger generations. Look at strategies that increase employee engagement. Consider building your pitch in job postings around the “mission” of your company. Look at implementing modern, digital systems that will appeal and support new employees.

The Future of Manufacturing and the Labor Shortage

The faster you can act on the ideas we’ve covered here, the better positioned your business will be to capitalize on future opportunity. Manufacturing is facing a labor crisis, but it’s not a crisis without a solution. Companies need to embrace solutions and innovation immediately. Rather than the crisis fading over time, events have made action and planning on hiring skilled workers even more paramount.

Contact CIMx Software today to explore the possibilities for your shop floor with our Quantum platform, and steps you can take to modernize and future proof your production capability.