Where Did the Employees Go?

The manufacturing industry is not back to its pre-pandemic normal. The effects of COVID-19 disrupted the labor market, shutting down or slowing down many manufacturing facilities, causing lost production, mangled supply chains, unpracticed skills, lost connections with work teams and, in some cases, diminishing the will to work.

Based on the statistics I have seen, in 2022 more than 80% of manufacturers reported struggling to find labor and at the same time are finding it difficult to retain employees. This is a 20% increase over 2021.

Where did all the people go? Maybe the older people who could retire did retire. Was this 5% of our workforce or more? Others may have left the industry, left for other industries, started their own businesses or migrated to other parts of the U.S. As a result, manufacturing lost these peoples’ skills and experience. We are left with the choice to do more with fewer people.

However, there are some positive responses and effects that were generated from the pandemic. For instance, automating operations and completing parts in one operation have grown in prevalence. In general, business is very busy and the pre-pandemic flow is back — maybe even more. Although we have lost 5% of our workforce, we might have gained orders for 10% more product.

Because the remainder of workers are carrying a heavy workload, burnout is real. It is reported that more than 70% of employees feel at risk of burnout, which can lead to fatigue that causes mistakes as well as safety and quality issues. For the employee, these are reasons find a job elsewhere.

When they look for new employment, they seek decent pay, job security and some flexibility in work scheduling, usually to accommodate family or personal needs. I hear that more than half of employees are looking for a new job at any given time.

To differentiate your employment opportunities from others, consider the following ideas to attract labor and retain it:

Skill Development. More than 90% of Fortune 500 companies have formal mentoring programs. At Schütte, we are actively working to improve skills and mentoring. We can already see a large boost in morale because of our intentional focus on these topics. We are also considering implementing training modules and videos to help employees grow and improve. Most employees will stay where they feel valued and that includes training and mentoring with possible career paths, not only pay increases.

Value the Employees. Part of feeling valued is rooted in a management staff that values members of a team. That means listening to employees’ legitimate concerns while offering constructive instruction and training. Enabling teams to improve processes and job satisfaction, recognizing a job well-done and giving fair treatment all around is beneficial for an entire company.

Competitive Pay. More than 60% of Americans live paycheck to paycheck, so a reliable competitive wage is critical. Employees also desire flexible paid time off. Wherever possible, allow flexible shift schedules that accommodate employee needs. Flexibility can be achieved in varying shift structures.

Positive Work Environment. Failure to provide the best place to work contributes to turnover rates. It has been reported that over 10% of manufacturing companies experience daily departures, not to mention departures occurring weekly and monthly. Nobody wants the added costs of training new people or the stress that is felt by the rest of the team.

In the end, everything will settle down and we will continue to grow the manufacturing businesses we love. I look forward to having many interesting conversations during my travels this year.