Overcoming the Talent Shortage in Manufacturing

Many manufacturers find it challenging to recruit and retain talented people. However, they also tend to have unique assets that can help them develop a workforce for the future: strong teams of high-performing innovators, valuable products that make a difference in people’s lives, incredible engineering and design innovations, and fascinating production technologies and processes. In addition, they can deploy the best business applications, ERP, CRM, productivity, and collaboration technology to help their employees succeed. Let’s take a look at the manufacturing industry’s workforce challenges and how technology can help manufacturers empower people.

Workforce risks augmented by traditional views of the industry

The manufacturing industry has experienced losses of skilled professionals for decades. Positions at all levels of expertise are open, and close to 2.1 million manufacturing jobs could be unfilled by 2030, resulting in financial losses of up to $1 trillion in that year alone.

At the same time, companies continue to re-shore manufacturing jobs from off-shore locations back into the U.S. Expectations are that in 2022 as many as 260,000 jobs will return as companies look to perform manufacturing closer to customers in order to avoid logistics and supply chain constraints. However, if manufacturers cannot find enough people to staff these positions, many reshoring initiatives could be delayed.

Large-scale generational turnover is one of several reasons for the talent crunch in manufacturing, although in the past the industry has been resilient to waves of older workers exiting the workforce. Maybe more of a risk for manufacturers is that not enough graduates and new workforce entrants think of manufacturing jobs as promising careers. Common perceptions are that the industry is slow to embrace technical and cultural change, and that well-paying, professional-level jobs are scarce. While analysts and industry associations have tried to reality-check these ideas, they persist.

Fueling workforce development with modern technology

During the pandemic, public appreciation of manufacturing shifted as companies met urgent needs at lightning speed, giving them a new opportunity to share their vision and achievements. In this changing light, the industry looks much more like the transformation-driven manufacturers that work with Sikich. Without receiving much credit for it, some manufacturers are outstanding organizations that continuously improve and innovate their products and create business cultures that thrive on empowerment, diversity, and inclusion.

As technology consultants, we don’t typically address manufacturers’ talent challenges directly. Instead, we help them become employers of choice. We help them equip their workers with modern, powerful tools and resources that enable them to make the best of their growing skills. We accomplish this through our expert consulting, business process optimizations, and deployments of business applications like ERP and CRM systems and other software.

Sikich consultants have many conversations with manufacturing clients to explore how modern ERP systems can help them attract, retain, and empower talent. Today’s ERP software is designed for real people at work, based on many thousands of hours of observing and recording their activities.

Broad participation is key to ERP success

Successful ERP deployments require the right leadership and communications from company executives and project teams. In our experience, ERP projects are practically guaranteed to fail when organizations simply mandate their employees to start using a different software system. We prefer to help manufacturing clients solicit employees’ contributions to their ERP implementations and develop a comprehensive communications plan to generate organization-wide support for it.

The most successful ERP deployments happen in organizations that involve their people as much as possible in choosing, configuring, testing, and training each other on their new software. Some manufacturers complete rapid ERP implementations followed by fast, broad user adoption by extending an already healthy, inclusive business environment where people want to work because they are valued and their voices are being heard. For others, democratizing ERP can be the beginning of a transformation in how they manage talent and approach important initiatives.

How ERP can benefit your employees

When Sikich implements an ERP system, such as Microsoft Dynamics 365, to support manufacturing business operations in client companies, ERP will make an immediate difference for everybody interacting with it. By simplifying and reducing errors and delays in many processes, it can also benefit those who don’t work with the software. How might the employee experience change with empowering ERP?

• Made for people. Leading, modern ERP systems are designed to make people’s lives easier with the best possible ease-of-use, no matter whether users are on the shopfloor or in the executive suite. They offer intuitive, streamlined interfaces that draw attention to the most likely actions users may want to take next. Within their areas of accountability, people can configure them to fit how they like to work and reflect their priorities.
• More productive time and greater intelligence. In most organizations, what people notice first following an ERP go-live is that they spend much less time entering data, and, therefore, also less time correcting errors in data entry. In ERP, teams and business groups can automate frequent tasks that can absorb lots of time, like routing invoices for approval and tracking the responses. When ERP becomes a manufacturer’s system of record and engagement, it becomes easier to look up business information, analyze and report on it, and share it with others.
• Achieving results. As they work with their ERP system, individuals and collaborating teams can become more insightful and closer in touch with the real pulse of the business. They can define their goals and milestones more practically and clearly measure their progress. When they manage relationships with customers and business partners in the ERP system, they can more easily and consistently align communications and commitments with what the business needs.
• Keeping individuals and operations on the right track. Instead of being caught by surprise or remaining unaware, users can set automatic alerts for certain conditions, for instance, when inventory levels of critical items fall below certain thresholds or when quality checks on vendor shipments or produced goods fall outside the standard. They can then act in time and still achieve the right business outcomes.
• Unified organization. Because ERP connects people and workflows, employees can more practically understand how their work impacts their colleagues and how it contributes to the company. They may have a better sense of the value they contribute, and they may also see opportunities for accomplishing more that previously weren’t visible. If they manage others, ERP can help them do so in a more collaborative, insight-based manner based on shared goals, less in the top-down style of times past.

Methodology for maximizing talent

Our consultants take the time to understand each manufacturing client’s opportunity to benefit from ERP to enable individuals and teams, drive business goals, and advance transformative initiatives. Based on what we learn, we deliver ERP systems as efficiently as we can, following our HEADSTART methodology with industry-optimized models of the ERP solution and a vast library of processes based on the most successful manufacturing standards.

HEADSTART greatly increases the probability of a successful ERP deployment that makes a positive difference for employees. By aligning ERP with the current state-of-the-art of manufacturing, HEADSTART can help you bridge some skills gaps on your teams. It also elevates the professional standing of ERP users, who can accomplish more with their talent when they can rely on software that’s designed for them.

Here to help

Contact Sikich to explore how we can help your manufacturing organization address workforce and technology challenges. You can also:

• Read “Be the Manufacturing Employer Where Talent Thrives”
• See how Sikich delivers ERP services and supports manufacturers.
• Learn how Sikich can help you plan and build an empowering work environment for employees anywhere.
• Find out if Sikich human capital management (HCM) and payroll consulting services could help you attract and manage talent.
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