Developing the next generation workforce depends on a new approach to cultivating talent for the M4.0 world.
In a brutally tight labor market, companies across all industries are fighting for top talent and getting creative about how best to attract and retain employees. In the manufacturing sector, this may be a time of reckoning that will force some leadership teams to reevaluate what it takes to be an employer of choice, especially because manufacturers compete more now with other industries for talent than ever before.
Making sure your team is prioritizing the right leadership competencies, embracing advanced technologies and flexible work options, and taking a holistic view of the talent pipeline are all crucial areas manufacturers should focus on if they want to build a competitive next-generation workforce.
Future Leadership Competencies
Some of the defining characteristics of a successful leadership team may seem obvious, like the ability to think critically and make tough decisions. But whereas in the past many leaders may have focused more on being an individual contributor or their own path through an organization, they now find themselves increasingly being defined by how well they help develop their people throughout all functions of the company.
Being able to help cultivate others’ skills is crucial for leaders in any industry, but it is paramount right now in manufacturing where there are notable gaps between open positions for blue- and white-collar workers, challenges in recruiting new workers to an industry many perceive as old-fashioned, and vast possibilities for new ways to harness technology across the business enterprise.
Leadership teams can empower employees by arming them with data not just about operations, but also about their performance.
“The manufacturing skills gap in the U.S. could result in 2.1 million unfilled jobs by 2030,” according to a 2021 study from Deloitte and The Manufacturing Institute, a partner organization of the National Association of Manufacturers. Compounding that potential shortfall, there were 1.94 job openings for every unemployed worker across the U.S. economy as a whole in March 2022, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey.
Without leaders who understand the importance of having a future-state mindset when it comes to the workforce, manufacturers run the risk of falling even further behind. Leaders in the corporate office and shop floor alike need to understand how to communicate the organization’s future vision across teams, evangelize advanced technologies’ role in the manufacturing sector, and spread messages about upward advancement opportunities.
So how can manufacturers develop these key leadership competencies? Here are some potential avenues:
- Prioritize cultivating talent within the company: Teams should have a clear process for identifying the organization’s high-potential talent and a development program to grow employees’ skills and overall career path. Such programs should also include measurable goals and leadership goals to improve accountability.
- Become less transactional and more dynamic: It’s common for annual employee performance reviews to be static and transactional. Perhaps most employees at a given business have their yearly review and consistently get a 2% raise. Across the economy, businesses are making the shift from this rote routine to a more dynamic and ongoing process of feedback, reviews and upskilling to better engage employees in their development.
- Assess retention practices: In the battle for new hires, manufacturers should not lose sight of their approach to retaining the employees they already have. Leadership teams should review their workplace culture and retention practices regularly to ensure they evolve as the market has become more competitive. For employees, the fundamental factors of work enjoyment, good management, access to guidance and mentorship, and having a sense of purpose about what they do are all important.
Being able to help cultivate others’ skills is crucial for leaders in any industry, but it is paramount right now in manufacturing.
- Think about technology differently: Like companies in other sectors, manufacturers need to change the way they think about implementing advanced technologies, especially given remote work’s rise and the increasing number of Gen Z workers. Rather than unilaterally making decisions about which technologies the company needs to put in place, leadership teams should make the conversation more collaborative, engaging employees about what types of technologies might benefit both their daily work and long-term development. Adoption of technology will be higher if employees are brought along in the decision-making process and implementation.
Embrace the New
Leadership teams that are skeptical about new technologies should examine why that is. If there is a perception within the company that it’s difficult to get employees to adopt new tech, executives should determine whether that perception is based in reality or based on outdated notions about the capabilities of the manufacturing space. The industry historically has been resistant to flexibility, but the shift to hybrid work and remote digital tools will force businesses to creatively implement manufacturing 4.0 technologies to stay competitive.
Indeed, more manufacturers have started to embrace digital transformation in the past four to five years, perhaps prompted by the U.S.-China tariff battle, which wrought havoc on supply chains and was further necessitated by the pandemic. But many companies likely have come at this from a reactive approach. To thrive in the future, they will need to become proactive about how they harness advanced technologies to create more efficient and streamlined operations and create a dynamic work environment.
And it’s not just about technology driving greater efficiency on the shop floor. Manufacturers need to think strategically and holistically about how advanced technologies can enable flexible work models and keep team members on track for their career advancement. This might involve:
- Using digital feedback platforms or learning courses: Many companies already use these types of tools at the corporate level, but manufacturers that want to stay competitive need to get more creative with how they incorporate such tools across the entire enterprise, and work to enable technology access for everyone on the shop floor and the corporate office.
- Reassessing technology policies on the shop floor: Think about manufacturers that don’t allow employees to use their phones on the shop floor, or don’t have Wi-Fi available in their production facilities. This will hinder those companies’ opportunities to attract younger workers. Gen Z workers do everything online, and they likely won’t respond well to a printed binder of policies and procedures. It’s important to have IT policies in place, but manufacturers should also cultivate an environment of trust with employees when it comes to technology use, given that access to phones and computers throughout the day can boost productivity. That trust will also facilitate better employee satisfaction and morale.
- Better equipping team members with data: Ultimately, data does not solve problems; the way employees use data solves problems. Leadership teams can empower employees by arming them with data not just about operations, but also about their performance. Building data fluency among employees can also improve the understanding that new technologies — such as cobots, wearable tech, and automated processes — exist to enable them as workers, not replace them.
Crucially, there needs to be buy-in from senior leadership for such efforts to succeed. For many manufacturers, this will likely require a mindset shift about the positive ways technology intersects with and improves workplace culture.
Holistic Talent Pipelines
Another mindset shift is in relation to how present and future talent pipelines differ from those of the past. The days of executives, managers, and others staying in one role for three decades is long gone, replaced by a more dynamic environment where employees seek out new opportunities based on a broader variety of factors alongside compensation.
Gen Z workers do everything online, and they likely won’t respond well to a printed binder of policies and procedures.
This again highlights the importance of leadership competencies for the future. Executives and other leaders need to understand how the increasing importance of these other factors — location flexibility, inclusive environments, opportunities for growth, and the importance of environmental, social and governance issues — drive employee satisfaction and perceptions of the manufacturing industry.
To become employers of choice, especially in the battle for talent against companies in tech, logistics, retail, consumer goods, and other sectors, leadership teams need to have a holistic view of the talent experience, from recruiting to onboarding and through to reskilling and upskilling employees. That continued engagement, along with employee access to data beyond key performance indicators, can help people have a clearer understanding of their impact on the organization overall. In a labor market where people want to know how they fit into the bigger picture, that engagement and sense of contribution can be priceless. M
About the authors:
Jason Alexander is Principal, National Manufacturing Sector Leader at RSM US LLP.
Marni Rozen is a Director at RSM US LLP.