In a world of machines and processes, leading a manufacturing network and consulting organization like Paranet provides an inside track on the challenges facing the industry today.
The biggest disruptors are people. Manufacturers battle for talent to fill numerous open positions that have sat vacant for months. There are constant grumblings about the younger generations currently in and entering the workforce … they don’t have a skilled trade, want flexibility, and have unrealistic expectations. Who are these people?
Many studies and articles explore a trend where people abandon the traditional path of permanent employment for the flexibility and freedom of independent contracting. Companies like Uber and Amazon offer the ability for individuals to make a living on their time through a variety of “gigs.” What does this trend mean for manufacturing companies where having someone consistently on the floor seems to be a necessity? In an industry where it is difficult to get workers, perhaps it is time to think differently to leverage this additional pool of potential talent.
The Paranet Group is a membership organization of manufacturing executives. Networking, community and socialization dominate our world. The importance of community and socialization is apparent as our member companies place immense resources and thought into the development of their culture. The foundation of a positive culture is built in an environment of loyalty, trust and shared fate. A person’s skills can be applied in many different companies; however, it’s the people and culture that guide an employee’s decision to stay or leave.
It’s hard to imagine a manufacturing plant, where training and safety are key, to be populated primarily with project-based workers. Manufacturers measure their success through metrics like productivity and quality. The insecurity of a revolving door of talent can sound terrifying. It’s time to challenge that fear. Change is in the air, and those who do not strategize for it and innovate will be left behind by their competitors.
A recent study done by the Brookings Institute found that the gig economy is growing faster than traditional payroll employment. Intuit reported that 40 percent of American workers will be independent contractors by the year 2020, including a large population of engineers, highly skilled mechanics and machinists.
This trend really started 20 years ago with Generation X, or the “lost” generation. For many in this generation, expectations were greater than reality, thereby compromising their attitude and happiness in an organization. This led to a change in a company’s expectation of employee tenure, making development and career paths more short term. Members of this generation started looking for other options.
Becoming an independent contractor checks many boxes, including flexibility, higher wages and lowered risk due to employer diversification. The pushback from leveraging these types of employees comes from the fear of losing control, specifically when it comes to things like intellectual property and competitive advantage. However, less than ten years ago many manufacturing companies were terrified of any form of social media, but now those platforms are a key pillar in their strategic plans.
Becoming an independent contractor is appealing for a number of reasons, but it fails to fulfil the need for socialization and a human’s innate need for community. I believe companies, and in this case specifically manufacturers, could fill this need for their hired independent contractors. In turn they would build loyalty and motivate those they hire to surpass expectations in performance. The life of a consultant can be more lonely and difficult than most people realize. If companies gave these cowboys a place to call home, even for a limited time, I believe the company would realize trust, high quality and even a sense of shared fate. It’s still about culture, but it’s thinking about culture in a different way.
At the end of the day, it would be a stretch to believe that the economy will be entirely comprised of gigs. If that were the case, there would not be people with enough stake in a company to take it to the next level. However, gigs are going to be a driving force that needs to be recognized. Manufacturing companies need to strategize this role within their workforce. It will be key to addressing the clearly prominent skills gap and will be advantageous for companies with seasonal demand or unexpected business changes. It will be interesting to see how manufacturers develop that culture of the future that promotes a bond between various employment structures. They can then leverage that community to increase their ability to find the skilled workers that are imperative to their success.