For years it was common to hear manufacturers lament their inability to find and hire new employees.
Initially, the problem was primarily characterized as a skills gap. Coming out of the Great Recession, the available workforce did not have the training and experience manufacturers needed.
As the unemployment rate in the U.S. and Wisconsin trended downward over the years, the skills gap problem morphed into a body gap.
“We just cannot find enough people,” became the common refrain.
Of course, when the unemployment rate was at or around 3%, nearly every industry was having trouble finding people. With 27% of its workforce over the age of 55, the manufacturing sector may have felt the pressure to attract new workers more than other industries. Around 23% of workers outside of manufacturing in Wisconsin are over 55, according to U.S. Census Bureau estimates.
But when the COVID-19 pandemic hit, most of those workforce concerns went out the window. Survival became the main priority. Managing cash flow became a top concern.
As the initial chaos subsided, however, the surviving manufacturers found themselves positioned to take advantage of massive layoffs in other industries like retail, hospitality and restaurants.
Over the summer, many employers complained that the availability of an additional $600 per week in unemployment benefits made it difficult to attract workers. The average weekly earnings of production workers in metro Milwaukee was around $870 in June and July, according to U.S. Bureau of Labor Statistics data.
Even though the extra unemployment benefits have expired, many companies say they still find it challenging to tap into the new labor pool created by layoffs in other sectors.
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“You have to study why a person goes into the hospitality or service industry and you have to start with it’s not the money,” said Ryan Festerling, president of Brookfield-based QPS Employment Group. “It’s as much a lifestyle as it is a career.”
He pointed out that workers in the hospitality sector frequently hang out outside of work and socialize together.
“It’s part of their life and it’s not just a job,” Festerling said, adding workers in the industry often value a highly engaged work environment, teamwork, seeing an end result and interacting with happy customers.
The question for manufacturers is how can they create a similar environment without the ability to exactly replicate the same circumstances.
“It’s a tough one, but if you don’t start there, I think you’re trying to fit a square peg in a round hole,” Festerling said.
He suggested manufacturers start by hiring a group of new employees at the same time to help create a cohort feel and then be deliberate about choosing which manager and projects new hires are assigned to, favoring ones that understand the differences in the industries.
Valerie Grube, director of recruiting, background investigations and retention services at MRA, said employers and hiring managers need to be open to new ideas and understand that people are assessing their lives differently amid the pandemic.
Most importantly, she said employers need a plan for onboarding their new hires.
“Having a plan that is not just throw them in and drink from the fire hose,” Grube noted. “You’re going to have to train them a little bit differently.”
She said many companies have a plan for the first day or first week but don’t go beyond that. The plan for onboarding should have more longevity to it and react in real time.
“You have to kind of read the room a little differently now,” Grube said, noting the world is filled with a lot of instant gratification and a desire for flexibility and understanding.
Employers can use videos to show prospective employees what the work and company culture are like during the hiring process. Grube said these don’t necessarily need to be highly produced and ideally should give people an authentic feel for the job.
“The more you educate people on the front-end, the better it is in the long run,” she said, emphasizing the need to be upfront and clear. “It’s not going to be a fit for everyone. That’s unrealistic.”
Grube said employers should also study data on the new hires that leave. Is it always happening after a certain number of days? Are some managers doing worse than others? Is one shift performing better than the other?
She cautioned that it is easy to become paralyzed by the analysis of turnover data and employers should keep their review manageable and actionable.
Best practices for onboarding and retention
- Study what made other industries attractive. Try to create a similar environment without exactly replicating.
- Have a plan for onboarding that goes beyond the first day or week.
- Use videos and technology to give prospective employees an idea of the work.
- Hire in cohorts and deliberately choose initial managers and tasks.
- Use data to identify where retention issues are taking place.