Let’s face it; employers have received gloomy news recently.
The Labour government’s first budget announced a hike in employer National Insurance payments together with increased National Minimum Wage levels. A double whammy for many companies – including those within manufacturing.
With increased staff costs in mind, how can your business react positively and protect profits? While costs and processes are important, your manufacturing business’s secret weapon is … your approach to human resources.
Contrary to popular myths, your human resources (HR) function directly impacts business performance. HR is your company’s secret weapon. Here’s how …
Don’t risk unnecessary recruitment!
Recruiting new employees can be problematic. There’s the financial cost of advertising vacancies, the time required from your HR team and the difficulty of finding suitable candidates.
The headache of recruitment in the manufacturing sector is real. Research shows that 77% of manufacturing organisations struggle to fill vacancies. This is further impacted by:
- Digital advances in the sector. Employees may need to embrace robotics and augmented reality as well as 3D printing. These are exciting developments; ones involving employee training and support. 45% of workers say they needed to learn new technologies in the last year. (PwC, 2024) If you’ve already trained your teams, don’t risk losing anyone unnecessarily.
- Shrinking demand. As of the second quarter of 2024, there were approximately 2.7 million people employed in the manufacturing sector in the UK, compared with 4.37 million in the first quarter of 1997. (Statista 2024) This decline is heavily influenced by automation.
- Skills shortage. 74% of manufacturing applicants lack the necessary skills needed to perform tasks required within the job opportunity. (Essentra Components, 2023)
The best way forward? Retain and engage your staff rather than risk the recruitment process.
Effective HR within a positive and productive company culture can achieve this. Is your organisation ready?
How to retain & engage
Non-financial benefits are often incredibly important to workers. Flexible working is often valued by employees but can be difficult to implement in the manufacturing sector. However, even a relatively small adjustment to working hours can greatly impact an employee’s wellbeing and work-life balance.
Thinking through these additional incentives is crucially important as employees are more open to changing jobs than ever before. Globally, 28% of employees say they are likely to change employer in the coming year. (PwC, 2024)
How can you ensure loyalty and longevity from your employees?
Many people jump to the conclusion that money matters. However 40% of employees would leave for better benefits with 10% prepared to take a cut in salary to achieve them. (Forbes Advisor, 2024)
The most attractive benefits cited as the most important benefit by employees are:
- Employer-covered healthcare (67%)
- Life insurance (45%)
- Pension and retirement plans (34%)
- Statutory holiday pay (31%)
- Mental health assistance (23%)
The benefit to note is statutory holiday pay. It’s not on most employers’ radar as we take paid leave as a given – but do your employees take all their holiday? And when they are on holiday, do they take a break from work? What is your organisation’s culture around annual leave?
It’s important to remember work culture when considering benefits and engaging with workers. Work-life balance is incredibly important to 51% of employees and 47% of employers. With these views aligning, work-life balance is an opportunity for organisations to engage with and retain employees.
Getting it right
Offering key benefits is a big step forward, but how do you know what’s working … what employees truly feel about their role and their work environment? You need to understand why people work for you … this forms part of your Employee Value Proposition (EVP) … the unique value you offer your employees. You need to talk.
What is EVP?
EVP is the combination of rewards, benefits and experiences provided to employees. It’s an essential way of attracting and retaining talent. 75% of active job seekers are likely to apply for a job if the employer actively manages its EVP. (Hubspot, 2023) Again, turn to HR for success.
Your starting point is to ask your employees. This can be via an anonymous survey or more in-depth discussions. Ultimately, you need to know how people feel about their job, your organisation and the work culture you provide. The key elements of EVP are:
- Compensation (including financial rewards and tangible, non-financial benefits)
- Work-life balance (benefits supporting wellbeing and flexible working)
- Work environment (technology, physical space (including location) and culture)
- Company culture (feeling respected, supported and valued)
- Personal development (opportunities for personal growth and career progression)
Some feedback will give you quick wins/fixes – such as more parking spaces or better coffee options.
Other issues may surprise you and offer a golden opportunity to resolve potential problems (such as more training provision) or showcase highly valued perks (such as enhanced Maternity and Paternity Pay). It’s important to involve everyone … at every level.
The First Step
Do you have an employee retention issue? Does your organisation have an Employee Value Proposition? The first step is to engage your secret weapon … HR. Professional HR support will help you every step of the way. Think twice about costly recruitment. Surely it’s better to enhance existing employees’ experience of your organisation and build better teams? Moving your teams from good to great is a win-win, helping employees and your organisation. Look out for our next article about how performance management positively affects everyone involved.
For no-nonsense HR advice and guidance, contact Emma Clack at Heneom HR. Email [email protected] or book in a free, no-obligation 30 minute call here: calendly.com/emma-heneomhr/30mins-introductory-call
To find out more about Heneom HR and what we do, visit www.heneomhr.com
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