Why Talent Tops All In Manufacturers’ Year Ahead

From the pandemic to the Great Resignation and remote working, to economic and geopolitical uncertainty, the issues that have beset organizations in recent times are going nowhere in 2023. Yet, as we head into the new year, none should be manufacturers’ top priority. Instead, they must focus on addressing a talent challenge unlike anything we’ve seen in the past.

The numbers are stark. Data from a September AARP bulletin suggests that more than 10,000 workers reach retirement age every day, and as a new wave of younger employees replaces them, it’s creating a huge shift in workforce dynamics. According to Microsoft’sMSFT
2022 Work Trend Index, 63% of frontline workers are excited about the job opportunities technology creates, while 53% of employees are more likely to prioritize health and wellbeing over work than they were pre-pandemic.

At the same time, a ManpowerGroup survey found that 69% of employers globally say they’re struggling to find staff with the right blend of soft and hard skills to fill critical roles in their businesses, while a recent survey led by The Manufacturing Institute found the skills gap could result in 2.1 million unfilled manufacturing jobs in the US by 2030, potentially costing the industry up to $1 trillion.

An inflection point

It means manufacturing companies find themselves at an inflection point — and what they do next could make or break their futures. The workforce of tomorrow will look, learn and work differently, forcing organizations to reimagine their talent strategies to meet employees’ evolving expectations around everything from hybrid working, to better pay and greater flexibility.

As Steve Fuller, EY Americas People Advisory Services Advanced Manufacturing and Mobility Market Leader, explains, “The balance of power has shifted from employers to employees. Employees recognize this and are seeking not just increases in compensation and work-life balance but access to meaningful work experiences.” Unless manufacturers recognize and respond to this shift, workers will go elsewhere and firms will be left without the necessary talent to succeed.

A differentiated response

As for what this response looks like, the key is to reorganize talent strategies to put people (not product or profit) at the center. This means focusing on what workers want and need, then using that knowledge to create an environment where people don’t just work a job but stick around to build a diverse and rewarding long-term career.

This differentiated response relates to the entire employee journey, too — all the way from initial attraction and onboarding, through learning and development and, ultimately, onto how firms drive meaningful productivity for staff at all levels.

For example, by using a renewed employee value proposition rooted in technology, innovation and self-improvement, manufacturers can expand the talent pool from which they recruit, including those from nontraditional backgrounds and communities. This will allow them to attract highly skilled workers who may not previously have considered a manufacturing career. Crucially, those workers should be onboarded through a culture-based program that embeds them in the company’s overall strategy and DNA, rather than a series of functional inductions aimed solely at giving them the skills required to do the job.

Likewise, manufacturing companies should confirm that they fully understand the value that their workers’ career choices bring — then act to support them as they move forward along their chosen paths. Whether it’s through individualized training, mentoring or immersive learning experiences, employees must be given ongoing opportunities to develop a range of skills and capabilities that they value themselves and that the market values, too.

And lastly, manufacturers need to engage employees with meaningful experiences that also increase productivity. For example, while AI-based data analytics tools can highlight any gaps or weaknesses in performance, this information should be used to improve the overall employee experience rather than to call out those perceived to be falling short. Offering more carrot, less stick in other words, with insights acting as the basis for helping staff – and, in turn, the company – can lead to enhanced productivity.

The future unleashed

Of course, this is not a call for manufacturers to turn a blind eye to the myriad economic and geopolitical challenges they are facing right now. But, at the same time, they can’t afford to allow the external uncertainty to take their attention away from the power shift happening within their workforces.

As a new generation of tech-savvy, highly activated workers arrives, the most successful firms will be the ones that put employees at the center of their talent strategies and offer them meaningful, differentiated and mutually valuable experiences at every stage of the employee journey.

As Steve Fuller puts it, “The workforce is now truly a force to be reckoned with.” If the industry is to become a place where people want to come, learn and stay in the future, 2023 must be the year that manufacturers act to unleash it.

The views reflected in this article are the views of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.