For several months, the media have been reporting the general labor shortage in the United States. Most manufacturers have been understaffed in their factories for even longer than this news cycle, but current events have transformed what before 2020 was just a typical challenge for manufacturers looking to hire enough people, in a dilemma that for many is mission critical. Even though understaffed manufacturers were able to meet most or all of customer deadlines this year, continuing to operate with staff shortages for too long can cause short- and long-term damage to the workforce. work and therefore to companies. Requiring employees to work excessive overtime not only results in employee burnout, but also increases unplanned absences, accidents at work, overuse of time off under the Family Leave Act and medical (FMLA), additional compensation for overtime premiums, disengagement (with productivity) and attrition. Unusually heavy workloads for an understaffed factory workforce can also attract union organizers.
Comparative analysis of survey results
In an effort to understand the workforce challenges that manufacturers face and how they deal with them, Ogletree Deakins’ manufacturing industry group recently administered a benchmarking survey to which 40 manufacturers responded.
Here’s a summary of the highlights, along with some key takeaways for manufacturers:
Increase the pool of candidates
In order to hire more people, manufacturers may consider more eligible candidates. The calculation is undeniable. In so-called “normal” times, this means finding more eligible candidates. With the current labor shortage, however, it may also force manufacturers to reduce their job requirements in order to make more applicants eligible. In other words, manufacturers can consider removing certain barriers to hiring that they have chosen to erect, thereby turning down fewer applicants and letting in more potential new hires.
- Reduce or eliminate hiring requirements
Our survey results show that manufacturers are doing just that, reducing or even eliminating many of their previous hiring requirements, such as:
- 37 percent of manufacturers stopped testing for marijuana in pre-use drug testing;
- 27% of manufacturers have ended marijuana testing only for non-safety related jobs;
- 12 percent eliminated all pre-employment drug testing;
- 32 percent reduced the scope of inadmissible convictions;
- 27 percent relaxed the requirement to have a high school diploma or general education development (GED) diploma
- 20 percent relaxed proficiency testing requirements;
- 20% relaxed the required prior experience standards;
- 5% eliminated a requirement to understand English
- Target specific populations
Manufacturers have also broadened the pipeline of candidates by implementing strategies targeting specific populations with a more tailored approach to recruiting. Respondents said they have stepped up their intentional efforts to target the following specific groups for potential hires:
- About 60 percent of students targeted at nearby trade schools and community colleges;
- More than half focused their hiring efforts on employees of nearby employers;
- Almost 40 percent were looking for military veterans; and
- 17 percent have prosecuted former prisoners.
Perhaps most interesting in this category is the idea that employers may be less willing to “play nice” with other employers in town and refrain from trying to hire other people’s employees. But desperate times call for desperate action, and more employers seem to be focusing their recruiting efforts on people who are already comfortable working in a factory.
Show them the money
Many employers are offering more money to attract more candidates and close the employment deal. Almost 50% said they implemented a signing bonus, with 67% of respondents paying the bonus when the new hire successfully completed a trial period (60 or 90 days), while a minority paid the signing bonus as soon as the first salary of the hiring.
Manufacturers have also increased the base salary. In response to current hiring needs, 56% of manufacturers reported a base salary increase of 1-5%, and 22% of respondents increased their base salary by 6-10%. A more nuanced approach is to increase the paid shift differential for work on the second and third shifts – jobs that manufacturers often assign new hires to out of respect for the seniority of current employees who choose the job of the first quarter. These higher pay rates for the second and third team can make recruiting easier, without increasing labor costs for the traditionally coveted first team. Respondents mentioned other alternatives to increasing wages, including accelerating salary increases from starting to full rate faster than before and combining certain job classifications so that the lowest classification. well paid is combined with and assumes the higher base wage rate of the other.
Many respondents also mentioned adding or increasing referral bonuses paid to current employees for recommending a candidate who accepts a job offer (and completes the trial period). Getting employees to help you solve the shortage can be a “win-win” for all parties.
Employers seemed to conclude that these signing bonuses and pay raises got the most bang for their buck, preferring them to spending on enhanced benefits. Only 12 percent added a parental leave benefit and only 10 percent reduced employee costs for medical benefits.
Time is money
Some employers are attracting candidates by improving paid holidays or making working hours more flexible. In fact, most added paid time off with 61 percent adding up to 2 days per year (perhaps by offering paid time off on an employee’s birthday, or new paid holidays such as Juneteenth); 7% adding 3 to 4 days of paid leave per year; and an additional 7 percent added five or more paid days off per year.
Some employers offer scheduling flexibility: 17% of responding employers do not require new hires to work full time and 22% offer flexibility with the exact start and end times of a workday .
Managing the COVID-19 pandemic
By the time we conducted the survey, most manufacturers had eliminated masking requirements – 51% had eliminated the requirement for vaccinated employees, while 37% had eliminated masking for all employees, regardless of their occupation. vaccination status. Employers are also reducing selection requirements. But there isn’t much we can do with these findings in the context of this investigation, as these changes to COVID-19 protocols are location and workforce specific, and the target continues to evolve. The big takeaway is that employers appear to be looking to reduce the burden on employees with respect to COVID-19 protocols, where applicable.
Sometimes there is “gold” in the comment section of polls. The responding manufacturers noted the following additional efforts they have made to recruit and hire people in today’s environment:
- organize in-person job fairs with free food and drink; ;
- identify new avenues to advertise locally for workers; and
- provide additional transportation-related benefits, presumably to overcome potential obstacles employees might encounter in getting to and from the plant.
Key points to remember
As usual, manufacturers are responding to this business challenge with eagerness and creativity. Hiring workers during a labor shortage requires intentional process and flexibility. Here are some key action items manufacturers might want to consider when dealing with labor shortages:
- Engage in a thorough and honest self-examination of the barriers the factory faces in attracting and hiring enough workers.
- For barriers created or controlled by the company, manufacturers may consider the costs and benefits of removing or reducing that barrier.
- For these obstacles imposed on the business by external factors, the manufacturer has to think creatively with ideas to navigate them.
- Decide what changes need to be made, get buy-in from key stakeholders, and implement them.
- Pay attention to the general morale of the current workforce. As employers focus their attention and provide benefits to new hires, they may see an increase in resentment or ill will on the part of current employees who may feel forgotten or left out.
- Remember to consider ways to strategically trumpet these changes in the market.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.