UKG study reveals key workforce priorities for the manufacturing sector

Posted on 24 Oct 2024 by The Manufacturer
Partner Content

The latest Manufacturing Industry Outlook report from UKG, drawing insights from over 400 Operations and HR Leaders in Manufacturing, provides a comprehensive analysis of the sector’s outlook for the upcoming year. The findings underscore the critical importance of fostering exceptional employee experiences to drive industry success.

Is the manufacturing sector’s quest for operational excellence being hindered by an evolving workforce landscape? The survey highlights significant workforce-related challenges that must be addressed to maintain competitive advantage. Out of the expert respondents:

  • 44% reported growth in the number of vacant positions over the last year
  • 52% said that voluntary employee turnover was up
  • 57% have seen rises in overtime hours and associated costs

Directly impacting productivity and costs, such statistics are worrying, particularly considering the difficulties manufacturers are having in recruiting and retaining the workers they need. 61% said that shortages in skilled labour were damaging their company’s bottom line performance, while 60% said the same of staff turnover. The survey shows that manufacturers need to combat four principal issues:

  1. Skilled labour shortages

Most survey respondents felt that the ongoing shortage of skilled labour would be a significant challenge for them in the coming year, and nearly a third said it would be their top issue.

With such labour shortages, which means businesses must cope with key positions remaining unfilled, impacting business continuity and reducing their ability to meet customer demand, manufacturers must find and adopt innovative solutions to address this challenge.

  1. Misalignment of staffing and production demand

Surprisingly, more than one in three respondents admitted to their businesses that they were still using yesterday’s manual tools, including paper, text messages, and spreadsheets, for staff scheduling.

This is impacting productivity, employee satisfaction, and cost control. For example, most respondents said their frontline operations were either understaffed or overstaffed most of the time, and more than half feel that understaffing drives up overtime costs. However, only 16% of manufacturers had adopted AI-based workload forecasting tools to improve scheduling.

  1. Poor manager satisfaction

While the employee experience is much discussed, and rightly so, the manager experience is more often overlooked. However, nearly half of our respondents see a frontline manager leave at least as frequently as every fortnight.

Manager frustrations are often driven by inadequate tools, including the manual scheduling solutions already mentioned. These generate a range of irritations for managers, such as difficulties with communications and the frequent need to make last-minute schedule adjustments because of unexpected absences.

  1. Lack of usable insights

A third of respondents still rely on manual data collection, analysis and reporting techniques. This significantly limits managers’ visibility of key metrics and insights for swift and effective strategic decision-making. Half of the survey respondents do not have the labour availability and activity visibility required for strategic decision-making.

With these challenges at hand, what should manufacturers be focusing on in 2024? UKG has identified three priorities.

Priority 1: Recruit and retain the right employees

Improving the employee experience will be vital to securing a stable workforce with the right skills and attitudes. Manufacturers should leverage today’s AI-powered technologies to reduce frustrating admin activity and simplify recruitment and other processes, as well as improve employee recognition, rewards, and upskilling and career development opportunities.

Priority 2: Pursue resilience, sustainability and employee well-being

Directly related to our first priority, manufacturers should turn their attention to Industry 5.0 matters, such as the resilience and sustainability of their business and the well-being of their employees. With skilled labour at a premium, workers are increasingly selecting employers with such issues in mind.

Priority 3: Leverage AI and automation for Workforce Transformation

In support of the first two priorities, as well across a broad spread of other areas, it will be key for manufacturers to adopt and expand usage of leading-edge AI and other digital tools, such as cloud-based workforce management systems, AI-based forecasting and analytics solutions, and data-driven decision-making tools.

With less than half of manufacturers currently using digital applications for employee communications and performance management, such tools represent a significant opportunity for competitive advantage for those who can make the most of them.

In the coming year, manufacturers must emphasise their workforce, recognising that the success of their operations hinges on effective management and employee engagement. Assessing and implementing advanced technologies that can streamline workflows and enhance productivity will be crucial. Additionally, refining existing processes will play a significant role in achieving operational efficiency. By focusing on these strategies, manufacturers can better address their key priorities and create a more resilient and responsive organisation.

The survey report dives deep into these issues and priorities, offering an in-depth analysis of what truly matters. You can download a copy of the whole report here: UKG Manufacturing Industry Outlook Report 2024

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