The manufacturing landscape is like a winding road leading to a peak of Industry 4.0 transformation but marked by roadblocks, such as supply chain disruptions, data security and the keeping of and attracting talent. When it comes to people (robots can take a backseat for now), management in manufacturing, maintaining and building human capital is a tremendous challenge. As the war on talent persists, leaders and human resource professionals have a hard road to navigate, but innovation and strategic planning can be a valuable ally.
Comprehensive human resource strategies should encompass both reskilling and upskilling initiatives, as these play crucial roles in bridging expertise gaps, fostering employee engagement, and integrating innovative methods within the business. In the dynamic landscape of Industry 4.0, characterised by automation and digitalisation, job requirements and essential skills constantly evolve, akin to a moving target. What was considered vital yesterday may no longer hold the same significance today, emphasising the need for continuous skill development to stay competitive in the ever-changing market.
Decoding the five key solutions of manufacturing recruitment and retention
Competitive, future-thinking manufacturers understand the pivotal role human capital plays in their success. They ensure they have a comprehensive human resources blueprint that addresses skilled talent acquisition, high turnover rates, and succession planning. Apart from business and resource planning, creating a desirable workplace should also be a key focus.
Sungsup Ra, former Deputy Director-General of the Asian Development Bank (ADB) and a member of the INCIT advisory board, highlighted that Asia, in particular, lacks an optimal skill ecosystem. This massive challenge resonates across various countries globally and is necessary for human capital management.
“In an era of disruptive technologies, the skills gap in manufacturing companies between advanced and developing countries in Asia is widening further. Most developing Asian countries do not have a well-functioning skill development ecosystem. In the absence of such a skills development ecosystem, it would be quite challenging for individual companies to close this gap,” he said in a recent GETIT interview.
Considering this, what are the solutions to modern manufacturing recruitment and retention woes in the manufacturing sector? Below, we break them down into digestible takeaways.
1. Accelerated talent acquisition is required and enter the friend zone with Gen Z
Acquiring the right people for open positions is a challenge; still, the younger generation could provide part of the solution to the problem. Gen Z and millennial workers, who bring a digital-native mindset and value purpose-driven work environments, can help replace the ageing manufacturing workforce. One long-term solution is to diversify the talent pool to include workers of all ages, including the younger segment consisting of recent high school graduates, Gen Z and millennial workers. In addition to dipping into different age demographics to find potential candidates, manufacturers should consider getting creative with tailored solutions to the talent acquisition problem.
2. Create a workplace culture with inclusivity, flexibility and job perks
Do you want to go into the office every day? If you don’t, this may hold true for employees too. Explore ways to create a more inviting environment for employees by focusing on inclusivity and diversity. By prioritising a welcoming atmosphere that embraces individuals from diverse backgrounds and stages of life, you can broaden your talent pool and foster an inclusive workplace culture. Also, consider offering new perks, days off for their birthdays, team building offsites, weekly office activities and knowledge-building opportunities, including reskilling. This all funnels into making sure your staff feel valued – remember, this is a top reason why many leave. Lastly, consider flexibility. A joint survey conducted by Manufacturers Alliance and Aon found that hybrid work is the preferred working model for 80 per cent of salaried workers in manufacturing.
3. High turnover rates must be addressed
It is essential that manufacturers address high turnover rates and adopt appropriate initiatives or integrate succession planning to offset staff leaving. The talent war continues, making it difficult for manufacturers to retain the talented individuals they took so much time to find. This is a huge loss and costs not only time to find an appropriate replacement, but also there is knowledge loss. Additionally, the younger generation, once hired, may not want to stay for various reasons.
According to an Australian manufacturing boss, he said it is almost impossible to hire GenZ workers because they “don’t want to get their hands dirty”. This is only one opinion, but it should give us pause when considering the younger generation and how to engage this segment as they will be needed to bridge the gap in expertise very soon. In America, 2023 saw high turnover rates for manufacturing jobs of around 36.6 per cent, on average. High turnover affects not only staffing, but production, and product quality and increases spending on training new employees.
4. The silver tsunami requires knowledge transfer and succession planning
The silver tsunami — the wave of Baby Boomers nearing retirement—is on the horizon. To effectively manage the impact of this generational shift, knowledge transfer and succession planning will be crucial. When this wave arrives, it will carry away invaluable expertise and historical knowledge that must be documented to avoid being lost forever. Implementing a robust knowledge transfer strategy is essential to ensure that critical information is preserved.
Consider pairing the retiring generation with the younger generation in cross-collaboration mentorship programs. To further protect manufacturers from knowledge loss, technology solutions can also facilitate succession planning and store and provide access to institutional knowledge, making it easier for employees to access information and expertise even after key individuals have retired.
5. Addressing the skills gap with training and development
The skills gap has arisen due to many factors inclusive of the retiring workers, lack of staff and also the rise in demand of digital skills. Keeping up with rapid technological changes in manufacturing is challenging, but it is required to power the latest in Industry 4.0 solutions and tools, such as data analysis, the Internet of Things (IoT), and robotics. To meet the demands of today, intelligent leaders are fostering a culture of innovation and prioritising continuous training on new tools, software, and automation systems. Cross-training programs and partnerships with tech providers to bridge the skills gap as well as upskilling and reskilling initiatives.
Balancing new technology with staff expertise
By blending traditional manufacturing skills with digital literacy, leaders can ensure that their staff’s knowledge is elevated and ready to welcome the future of manufacturing and Industry 4.0. The primary human capital management challenges continue to centre around: the skills gap, labour shortage, retention, succession planning, workplace diversity, training, health and safety and employee engagement. However, by anticipating these challenges and working to solve them with proactive strategies, these obstacles can be addressed and potentially solved. Continuous investment in human capital should remain a priority to drive innovation, growth, and sustainability in the manufacturing sector.
To effectively tackle the skills gap, companies should explore utilising resources like the Smart Industry Readiness Index (SIRI) to assist leaders in evaluating the necessary expertise and technologies required for advancement. This tool aids in developing impactful Industry 4.0 transformation strategies. By integrating SIRI alongside the previously discussed strategies, businesses can strategically map out their Industry 4.0 journey, addressing the skills gap and positioning themselves for sustained success in the dynamic manufacturing environment.
