State of the Manufacturing Workforce in 2023

In a recent industry report, UKG explores the state of manufacturing in 2023 and shares insights that are reshaping the sector. This annual survey offers a comprehensive view of labor improvements and trends within the manufacturing industry and emphasizes the need for continued efforts to address workforce challenges, enhance employee well-being, and embrace technology to support the frontline workforce.

Below are the key takeaways:

‍1. Labor Improvements compared to previous years are evident:

According to the report, labor improvements are visible in the manufacturing sector compared to the last two years. 

• The national labor crisis from 2021 to 2022 exacerbated the industry’s skills gap, but staffing levels in late spring 2023 reveal an improvement. Manufacturing production lines went from being 38% understaffed on average in 2022 to 28% suggests the industry’s labor market is slowly stabilizing. 
• In 2022, around 1 in 10 manufacturers saw frontline staff voluntarily exit on a daily basis, but that frequency is seen by just a fraction of organizations today. Similarly, 43% of manufacturers now say frontline managers rarely quit — an improvement from 20% in 2022.

However…

2. Workforce Challenges Persist:

While improvements are evident, the report acknowledges that manufacturers continue to face workforce challenges. Labor shortages and the need for upskilling remain key concerns for the industry.

• 76% of manufacturers are struggling to fill critical labor gaps, and 66% said it takes longer now to fill open positions.
• 62% of manufacturers say turnover increased YoY at their organization, while 16% saw a decrease, and 22% reported little to no change.
• Most HR leaders say $20,000 – $40,000 is the average cost to replace a skilled frontline employee.
• More than half of manufacturers (54%) said their annual rate of turnover is above 20%

Facing these challenges, it's clear manufacturing employers have continued work to when it comes to supporting their employees and improving the employee experience. So....

3. What do manufacturing employees want?

‍A culture for frontline the same as corporate

The following statement was posed to the population survey: “We have two separate cultures in our company: one for frontline workers and one for everybody else.”

• 80% of manufacturers agree with this statement, 32% saying they “strongly agree.” Almost all survey respondents (92%) indicated that frontline employees receive “the same benefits” extended to corporate employees. 
• However, when diving deeper into the data, it was found that manufacturers may be offering only some of the same benefits to plant employees — certainly not all.
• For example, very few offer predictable work schedules (34%) or paid time off (28%) for frontline employees, while just 44% grant frontline staff flexibility and autonomy to set shift availability and pick up or swap shifts as needed. Moreover, only 50% say training and development or employee wellness programs are available for the frontline. 

They want the frontline experience to be supported with mobile technology

• More than two-thirds of manufacturers (68%) say their company isn’t doing enough to support the frontline employee experience with mobile technology. 
• The research shows many manufacturers still rely on manual (e.g. paper processes) or outdated electronic solutions (e.g., spreadsheets, emails) to manage and retain frontline employees, with fewer than 1 in 10 embracing AI driven technology to streamline routine tasks, such as scheduling, time and attendance, productivity tracking, performance management, and more. 

Emphasis on Employee Well-being

UKG's survey emphasizes the importance of employee well-being. Manufacturers are more and more  prioritizing initiatives to support their workforce's mental and physical health, recognizing that a healthy workforce is a more productive one.

• According to a study that analyzed feedback from more than 74,000 employees in manufacturing and production fields, when managers encourage people to balance their work and personal lives, employees are 16% more likely to endorse that company to friends and family as a great place to work.
• Similarly, when employees feel they are able to take time off from work as needed, the study finds they are 14% more likely to stay with their organization. In both instances, flexibility is revealed as a crucial factor for recruitment and retention efforts to address the industry’s skilled-labor gap.
• Around 2 in 5 HR leaders surveyed said they’d like to see their organizations put a higher priority on offerings such as employee wellness programs (42%), recognition and rewards (39%), and employee engagement surveys (37%).

_{Source: UKG - A Turning Point for Manufacturing - 2023 Industry Report}

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