Challenges Facing HR in Manufacturing—and what you can do about it.

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FACT: In 2013, manufacturers contributed $2.08 trillion to the economy; this was 12.5% of the GDP

FACT: Last year, the average manufacturing worker in the US earned $77,506.

FACT: Currently, about one in six American jobs are in manufacturing.

FACT: HR in Manufacturing needs some focused attention.

This year manufacturers are already enjoying strong sales and increased attention from the investment community. The industry needs more staff than ever, and they project themselves to grow faster than any other service sector.

With expected staff increases across the country of 2.4%, and a 4.6% revenue surplus by the end of this year, HR departments of manufacturing plants should see the applications pouring in.

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The problem is, applications are barely trickling in.

Even if you work in a corporate recruiting function with low resources or minimal expectations for change, every recruiter still has a professional obligation to maintain their awareness of the latest trends and predictions in their field.

Especially now as twenty something’s rise into the workforce, the manufacturing sector is often viewed as old-fashioned and dated.

Something needs to be done to fix this dated system. Something—as Karin Lindiner of KATRICO Performance Solutions puts it—sexy has to be done.

Before we jump head first into the solutions to these serious issues, let’s try and get more specific with the problems themselves.

Table of Contents

The 9 Challenges You Face in HR in Manufacturing.................4

What You Can Do to Confront These Challenges.....................10

What The Experts Are Doing to Get, and Retain Talent.........15

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9 Challenges You Face in HR in Manufacturing

1. Manufacturing workforce is shrinking

“If you come across any service technicians that know what they’re doing – send them in here. We have a standing order for service technicians around here.”

This is what a business owner told me while he was considering selling his industrial heat exchanger manufacturing and repair business.

What I’ve come to learn about his manufacturing business and others over the last three years is while demand is growing, their workforces are shrinking at alarming rates.

The average age of a highly skilled U.S. manufacturing worker is 56.

As in born around 1957-58.

As in “about to retire.”

As in they’re not making them anymore.

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2. An overlooked employment sector

Manufacturing is a seriously overlooked sector in our industry, yet it’s very lively.

Manufacturing is always looking for skilled labor.

Because of the aging workforce and the fact that companies haven’t made the leap to investing in training (yet), talent is especially scarce and the smart money noses around inside other companies for workers already trained and ready to start the first day on the job.

One of the answers to increasing employment (and rising wages) in this country is to put unemployed and underemployed college graduates to work in skilled manufacturing positions; this idea hasn’t taken hold yet, but sooner or later it will as Baby Boomers get sick and tired of having their boomerang children living in their basements.

According to this interesting interactive map provided by the Brookings Institution, there were 11,499,905 manufacturing jobs in the United States in 2010.

The map is fascinating because it breaks manufacturing by large and small city by total number of manufacturing jobs; by the percentage share manufacturing holds of all jobs in that city; by the share considered high tech and by the share considered moderately high-tech.

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3. LOTS of jobs to fill

In many of the cities moderately tech and high tech manufacturing clearly hold more than one-third (and in some more than one half) of all manufacturing jobs in those cities but look at what is left for the low-tech sector!

That’s a lot of what my dear friend Steve Levy likes to call shekels being paid for wages across a lot of different industries, and that’s a lot of jobs!

4. The Recruiting Audience Is a Tough One

An Accenture report found 55 percent of manufacturers says they have or will have a shortage of people with the right skills in research and development. Half the surveyed manufacturers say they are facing a similar shortage in marketing.

Hiring in the manufacturing sector has been rising steadily. Wanted Analytics noted in July that the online job postings for jobs in manufacturing companies rose to a four-year high in May. It dipped slightly the following month, when the firm’s analysis of online listings found 259,000 jobs.

Industrial engineers are the most in-demand occupation in the manufacturing sector,” Wanted said on its blog. “First-line supervisors of production workers, marketing managers, applications software developers, and sales representatives (wholesale and manufacturing) filled out the top five manufacturing occupations.”

From November 2012 to November 2013 manufacturers added 76,000 new jobs, not a big number, but more than the information sector and just 7,000 jobs fewer than in the financial sector and a third that of the fast-growing temp sector.

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5. Retention problems will increasingly impact recruiting

As more employees become comfortable shifting away from security needs and toward more exciting job opportunities, turnover rates will increase by over 25 percent.

This dramatic increase in turnover will create many new “sudden openings” which will put an added strain on already stressed recruiting systems. In order to help reduce future turnover, the “potential for early turnover” will have to be included in the assessment criteria for all finalists.

This month, the LINE prediction from the Society for Human Resource Management says manufacturer hiring will accelerate compared to December of last year, while the normally expanding services sector will decline in its hiring rate.

According to SHRM: “A net of 31.6 percent of manufacturers will add jobs in December (40.9 percent will hire, 9.3 percent will cut jobs). The sector’s hiring index will increase by 6.3 points compared with a year ago.”

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7. College recruiting must be reengineered if manufacturing recruitment it is to succeed

The demand for college talent in key majors will continue to increase dramatically. Unfortunately, corporate college recruiting budgets and processes have been mostly stagnant over the last few years, even though colleges themselves and the expectations of their students have changed dramatically.

A reengineered college recruiting model must move beyond a focus on career centers and increase its capabilities in the areas of global college recruiting, remote college recruiting, recruiting students from online universities, recruiting “passive” students, and the use of market research to completely understand the job search process and the expectations of this new generation of grads.

6. Speed of hire will become more essential to remain competitive in the HR space

Over the last few years — with high unemployment and little competition for talent — in many cases recruiters could take their time and still land top candidates.

As the pace of change in business and the competition for talent increases, firms will have no choice but to revisit “speed of hire” approaches and tools in order to land candidates that are in high demand.

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9. Large Manufacturing firms must learn to compete with startups for talent

The recent lavish funding and the economic success of numerous startups will continue to make them attractive to innovators and top talent.

Unfortunately, few major manufacturing corporations have a market-research-driven strategy or a set of tools that allows them to successfully recruit against startups for these valuable prospects with a “startup mindset.”

8. Shortage of top recruiters

As recruiting ramps up, firms will begin to realize that there is a significant shortage of talented and currently up-to-date recruiters.

After poaching from the rapidly shrinking executive search world, leaders will begin bidding over top corporate recruiters. A lack of quality internal and external recruiter training capability will make the recruiter shortage even worse.

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What You Can Do to Confront These Challenges

As much data as we might see on talent acquisition and retention in the manufacturing industry, it’s a perpetually interesting topic to look at because (and Ultimate Software puts it well),

“A company can have the right technology, the right infrastructure, the right products and services – yet still fall short of expectations without the right people.”

People are the heart and soul of an organization, and attracting, hiring, and engaging the right people for an organization is vital to its growth and success.

We’re still in the midst of an ongoing economic recovery, and Millennials, who are the largest generation in history, (95 million compared with 78 million Baby Boomers) are currently filling one out of every three positions in the United States.

By 2025, Millennials are projected to make up 75 percent of employees in the global marketplace. Add this to the incredibly competitive, fast-paced, technologically advanced, and increasingly inter-connected world that we live in and hiring the “right” person becomes “both more difficult and more important than ever.”

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Here are four specific things you can do to confront the challenges facing your manufacturing industry.

1. Create a Better User Experience

Over the last five years, companies have increasingly focused on the “candidate experience” in talent acquisition (see the ground breaking research done by Gerry Crispin’s and Elaine Orler’s Talent Board), putting themselves in the job seekers’ shoes with a focus on treating them like a unique individual or “the customer.”

When the company, Ultimate Software discusses “User Experience” as a talent acquisition trend though, they’re talking about a more recent trend than focusing on candidate experience, one that emphasizes user experience in terms of designing or selecting a recruiting solution.

In the same way that people expect exceptional user-experience from consumer-level technology like their smartphones, employees now expect the same level of ease-of use with recruiting solutions technology in the workplace.

Candidates themselves also expect an easy (and mobile) user-experience when searching for and applying to positions. Not being able to do this on a smartphone, for example, has become a huge barrier to entry.

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2. Personalization and “Socialize” Connections

Personalization, in the context of talent acquisition, is described as “the fusion of a positive user experience with an emphasis on the individual.”

Essentially, organizations that treat candidates as individuals and potentially valuable employees from the beginning of the recruiting process have a number of advantages.

Using a more personal, behaviorally based interviewing approach can lead to better information for the recruiter (they may for example find a candidates fits well for another role) and a more engaged candidate.

It may also help candidates leave with a better impression of the organization overall, and prevent what Ultimate Software calls the “candidate black hole” (referring to the statistic that nearly 50 percent of job applicants never get any response after submitting an application).

“Social Connections and Collaborations” refers to talent acquisition solutions integrating with social media platforms (think LinkedIn and Facebook) to leverage more effectively the vast amount of useful information on candidates that these platforms provide.

Note that 89 percent of all job seekers report using social media sites and almost 50 percent report using these sites every day.

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3. Recruiting Millennials and Global Recruiting

Successful organizations have embraced the advantages of creating a more global workforce, leveling technology like video interviewing and telecommuting to find the right candidate for the job, no matter where in the world the might be.

Ultimate Software cites data from a recent KPMG survey, which reports that 71 percent of HR executives feel that collaborating across international borders is more prevalent today than just five years ago, and more than 50 percent are considering or have added new international offices.

4. Recruit Millennials

Last but not least, successful talent acquisition programs have been specifically addressing Millennial candidates applying for positions—a smart move when we consider that they’re projected to make up 75 percent of the workforce by 2025!

This attention on Millennials does not necessarily comprise a total remaking of the talent acquisition process, but a purposeful implementation of changes to the recruiting process (like keeping in mind that 83 percent of Millennials own a smart phone, or that Millennials place a high value on an organization’s mission, purpose, and culture).

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These Are Big opportunities for smart organizations

Together these five trends point to new realities for organizations as they plan to add new talent to their ranks.

It’s not just demographics that are changing. Social technologies are changing our ability to engage and retain the right people – where and when we need them. And that spells big opportunity for organizations who believe that people are at the heart of the cultures and their successes.

Read more of Ultimate Software’s prospective on these trends.

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What the Experts Are Doing to Get and Retain Talent

Below is a list of some of our favorite companies in the Fortune 500 club—and what makes them so awesome.

Check out the entire list here.

They offer grants for employees who are first-time homebuyers below a certain income level. They also participate in financial counseling.

CarMax has a “time away” policy for associates that permits them to take off as much time as they need to without a quota.

They use social media to recruit job candidates. They also have over 100 YouTube videos featuring employees describing what they do.

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Their headquarters is designed to look like a college campus — and includes a child care center.

The Goldman Sach’s staff won for the fastest corporate team in the annual race up the empire State Building steps.

Cisco, like Chesapeake Energy, has two large child care centers.

EOG matches charitable donations to the dollar up to $75,000

For every five hours an employee volunteers, Google donates $50.

Employees at NetApp get 5 paid days off per year to volunteer in their community.

Stryker makes medical devices physicians use in sur-geries. They provide opportunities for employees to see the products in action by watching surgeries.

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Oh, and one last thing! I’d like to invite you to our upcoming Forum on HR in Manufacturing taking place in Ft. Worth, TX on Nov. 4-5.

The forum will bring together hundreds of leading HR decision-makers ready to collaborate, network and collect actionable solutions to the challenges they face in today’s global marketplace.

Save 10%Just by downloading this whitepaper you’ve received a 10% discount for yourself and all your HR friends—nice job!

Use this fancy discount code when you sign up: HRM14WP