While an aging workforce and an overall decline in population growth have contributed to concerns over a shrinking talent pool for more than a decade, the COVID-19 pandemic, skills gap crisis and generational expectations have significantly intensified the challenges of recruiting and retaining employees for most businesses.
About a year and a half into the COVID-19 pandemic, an additional workforce crisis was added to the mix: a voluntary mass migration of people from their current jobs. Turnover has become an epidemic of its own for employers – a phenomena which has been labeled “The Great Resignation.” However, while the turnover rate has jumped rapidly over the last year, most employees who quit their jobs didn’t do so thoughtlessly. Of those employees who voluntarily left their jobs, 69% had already found a new job. This movement seems to reflect more of a labor transformation than a simple exodus out of the workforce into self-imposed unemployment.
Stress, burnout, and isolation have caused people to evaluate what they are willing to tolerate and whether their job and/or company are still the right fit for them. Additionally, growing expectations of flexibility, creativity and purpose means more people are seeking diverse career experiences instead of settling into life-long jobs.
Electronics manufacturing has not been immune to the impact of the various labor market challenges. In fact, few industries represent the rapidly evolving workplace like manufacturing. Historically, manufacturing has been prone to higher turnover rates than most other industries and the current workforce issues have only served to make a tough situation worse.
At this point, electronics manufacturing must place particular emphasis on recruiting millennials, as they possess valuable technology skills and knowledge, but that segment of the population very rarely considers careers in the manufacturing industry. While there is nostalgia for manufacturing as a part of the American fabric, and most people see it as essential to economic health, they don’t consider the manufacturing industry for their own career. Millennials tend to stigmatize manufacturing as a slow, outdated environment that lacks competitive wages, innovation and sophistication which does not align well with their personal interests and ideas of new technologies. In a Deloitte survey, 45% of respondents cited “negative perceptions towards the manufacturing industry” as a cause for job vacancies.
Additionally, there are too few graduates educated in STEM disciplines and a lack of trade programs focusing on relevant skills, while highly skilled manufacturing workers have an average age of 56 and nearly a quarter of that skilled worker base will be retiring over the next decade.
Another significant impact on manufacturing is the extent to which the rapid evolution of technology is impacting the longevity of hard skills. Among the workforce, there is a natural fear that certain positions within the manufacturing world would ultimately lead to replacement by automation. Studies show that the pace of technological change is one of the predominant contributors to the skills gap problem.
The combination of an aging workforce, a generation of workers who have a negative perception of manufacturing jobs and the inability to find sufficiently skilled workers who don’t require significant amounts of manufacturing training and education has created a serious uphill battle for staffing within the manufacturing industry. Fifty-five percent of manufacturers acknowledge a substantial shortage of people with the right skill sets. And, in a talent shortage, candidates have more power to dictate wages, benefits and job content.
To attract new employees, and retain good ones, companies are being forced to become more creative. The word that comes up most often for employers to be successful with recruiting and retention is “flexibility.” Offering new incentives such as more competitive salaries, increasingly flexible schedules, remote work options and referral bonuses have become standard.
The electronics manufacturing skills gap creates an urgent need for companies to not just attract the right people but to nurture and retain them. When recruiting, a candidate’s soft skills (e.g., adaptability, critical thinking, initiative, empathy, passion for learning) have a significant part to play in assessing their suitability for the role as companies playing the long game can not afford to rely solely on hard skills.
Making the most of an aging workforce, and limiting the loss of institutional memory, implicit knowledge and invaluable experience, when older workers hit retirement age also needs to be managed. Again, the key word for employers here is “flexibility.” Many Baby Boomers are open to working part-time or remotely where a lighter and more flexible workload can lead to mutually beneficial work agreements.
With time and effort, improving the overall manufacturing culture will also help address the industry’s image problem as well as retain current employees. This culture change needs to be driven by employee feedback to better understand workforce opinions and needs. Some issues within the workforce that inhibit growth and productivity can be effectively addressed when employers listen to, and take action on, employee feedback. A more satisfying culture creates a better employee experience centered around improving every stage of the employee lifecycle by integrating employee ideas into policies and procedures that help shape an organization and the industry itself. When companies make changes based on employee feedback, employees feel more empowered and satisfied with their jobs which is attractive to all generations.
Investment in employee growth and development, from both a professional and personal perspective, can help manufacturing companies build a talent pipeline and create workforce engagement. Tapping into the pride of “made in the USA” and connecting it to a modern, compelling employer brand can better position companies to recruit a high quality, diverse workforce. The easiest adjustment, as well as being highly effective, is employers’ use of their in-house resources – their current employees. Employee referral programs are a great way to take advantage of your “human” resources and who better to promote the company culture than those who already work there.
Manufacturing companies, and their human resource departments, have their work cut out for them in the months and years ahead. Any company that does not already have these issues on their radar, and is not formulating a plan of action, is at a significant disadvantage. These workforce trends are not going to change anytime soon and companies that do not quickly adapt will be left struggling, or worse.
With all that said, ACDi is committed to attracting and retaining highly qualified, motivated and engaged people who value the importance of what we do as an electronics manufacturer, particularly as it relates to our high-reliability systems. Employee satisfaction and tenure play an important role in our ability as an electronics contract manufacturer to deliver the quality electronics our customers rely on and deserve.
-Terri Boober, HR Manager