How to engage manufacturing employees to beat skills and labour shortages

Answering the question of how to engage manufacturing employees is crucial to tackling the challenges facing the evolving industry today.

Although the UK manufacturing industry performed better than expected during the first quarter of 2023, limited access to labour and skills will remain a barrier to growth over the year ahead, new research has revealed.

The latest outlook report from industry body Make UK and accountancy firm BDO revealed some surprises. Contrary to expectations, rising output volumes were more than matched by total order book growth in the first three months of the year. This came following the previous year’s quarter-on-quarter slowdowns. The better news was driven by ‘remarkable’ growth in the domestic market and rebounding sales in export markets.

As a result, confidence is starting to return among businesses. Employment intentions for the next three months improved markedly over the last quarter to hit +19%, rising to a hefty +31% for the second quarter.

But the labour shortage is still a real challenge, with some 77,000 job vacancies in the first three months of 2023. This means 3.2 vacant jobs in every 100.

While the turnaround in employment intentions across one quarter comes as a positive sign for the industry’s prospects, the ongoing labour shortage that the industry has been suffering with over the past few quarters will only exacerbate as demand for labour spins back up.”

Make UK/BDO Q1 Manufacturing Outlook

What does the manufacturing labour shortage look like?

A key problem behind this labour shortage is that the manufacturing sector has been struggling to recruit and retain employees with appropriate skills, qualifications or experience for years. The situation has only worsened over recent years due to digitisation, the impact of both Brexit and the pandemic and, more recently, low levels of unemployment and wage inflation across the economy.

In fact, over a third of vacancies (36%) are currently proving hard to fill due to a lack of candidates at all levels of the workforce with the right expertise or background. This figure compares to an average rate of 24% across all industries.

The result is that about one out of 10 manufacturers are now taking longer than 12 months to fill a vacancy.

This scenario, says Jamie Cater, Make UK’s Senior Policy Manager, is “having a significant impact, not just on fulfilling their order books but on future planning for growth and sustainability”.

Why is there a labour shortage in manufacturing?

Ageing workforce

Part of the problem is an ageing workforce. Growing numbers of older workers have either retired early or plan to do so over the next five to 10 years. Others have cut the number of hours they work.

Not enough new entrants

But new entrants are also not coming through in sufficient numbers to plug the gap, a situation not helped by the sector’s undoubted image problem. Roles are all too often perceived as being low-skilled and dull, with the focus being on working with heavy machinery to undertake repetitive tasks.

Misconceptions about manufacturing

To make matters worse, there is also a common misconception that salaries are not competitive – even though average pay in the manufacturing industry is 12% higher than the average across all sectors.

But the upshot of these erroneous beliefs is that science, technology, engineering and maths graduates tend to go elsewhere, opting for careers that appear more glamorous.

The importance of engagement and retention

As a result, it is clear that employers need to take a two-pronged approach to address these challenges effectively. On the one hand, to attract jobseekers and keep them engaged all the way through the hiring process, investing in integrated, easy-to-use technologies for recruitment and onboarding is imperative.

To this end, our HCM Cloud applications link seamlessly to leading applicant tracking systems, which include Cegid Talentsoft, Eploy, Cornerstone OnDemand’s Talentlink, and Workday. We also offer a comprehensive background checking service that is both fast and accurate, the aim being to ensure the hiring processes is as smooth, streamlined and efficient as possible.

Just as important, on the other hand, is finding ways to retain employees once they are on board. Key to this is ensuring they are actively engaged and motivated.

Research from workplace consulting and research firm Gallup indicates, for instance, that staff turnover rates in poorly engaged teams are between 18-43% higher than in highly engaged ones. Unsurprisingly then, companies with engaged workforces tend to be more profitable, leading to higher earnings per share.

How to engage manufacturing employees

So how to improve employee engagement in manufacturing? Luckily, there are a number of tried and tested ways to do so. Creating supportive, inclusive workplaces and encouraging collaboration at all levels certainly helps here.

Another key consideration when establishing how to engage manufacturing employees most effectively is to commit to retraining and upskilling both new and existing staff. The goal here is to ensure workers can meet all of the challenges associated with the move to Industry 4.0.

It’s important to provide staff with the best technology to do their job, whether at home, in the office or on the move. This includes providing secure and convenient access to self-service manufacturing payroll software and HR systems, such as Zellis MyView, from mobile devices like smartphones. Empowering people to easily access and update their information, from payslips to holiday and expenses, allows them to feel in control, valued, and invested in. This encourages them to remain in the role, improving job satisfaction and retention.

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