Strategic Workforce Planning: A Key to Manufacturing Success

Introduction

The manufacturing industry faces significant challenges, including a talent shortage, technological advancements, and market changes.   For example, the National Association of Manufacturers (NAM) has reported that over 2.1 million manufacturing jobs could go unfilled by 2030 due to the skills gap, highlighting the critical talent shortage faced by the industry​ (The Manufacturing Institute).  And, according to a McKinsey report, the implementation of automation and robotics has led to a 70% increase in productivity in some manufacturing processes. However, this also requires a workforce skilled in operating and maintaining advanced technologies, exacerbating the talent gap​ (McKinsey & Company).  Furthermore, the shift toward reshoring and the need for more localized production is causing many manufacturers to ramp up operations. A Deloitte study projects a 40% increase in domestic manufacturing output over the next decade, which will require manufacturers to adopt strategic workforce planning to meet growing demand​ (Deloitte).

While employment and wage rates can fluctuate weekly and monthly, the future state is clear: to remain competitive, manufacturers need to implement workforce strategies today that address these issues and ensure long-term success. Here’s how manufacturing leaders can develop and implement effective workforce strategies.

The Importance of Strategic Workforce Planning

Strategic workforce planning involves aligning an organization’s workforce capabilities with its long-term business goals. For manufacturing, this means anticipating future talent needs, identifying skills gaps, and developing strategies to attract, retain, and develop the necessary talent.  To successfully implement strategic workforce planning, manufacturing leaders must focus on several key components:

1. Workforce Analysis and Forecasting

Understanding current workforce capabilities and forecasting future needs is the foundation of strategic workforce planning. This involves analyzing workforce demographics, skills inventories, and turnover rates. Leveraging data to identify trends and gaps in the workforce enables more informed decision-making.

For example, one manufacturer partnered with Eastridge to study data to get to the root causes of turnover in the early stages of employment (Eastridge).  This helped identify training gaps and misaligned worker expectations.  For example, a large percentage of turnover occurred within the first one to two weeks, indicating potential training and job matching issues. By addressing these issues, they improved the worker experience and reduced early turnover.  This, in turn, led to a more engaged workforce and record breaking productivity.  By zeroing in on key data points rather than generalizations, the company was able to implement targeted changes quickly and effectively that had a big impact on the bottom line.

2. Talent Acquisition Strategies

Effective talent acquisition strategies are essential to address the immediate and future talent needs of the organization. This includes:

• Proactive Recruitment: Building a talent pipeline by engaging with potential candidates before positions become vacant.
• Diverse Sourcing: Expanding recruitment efforts to include underrepresented groups and non-traditional candidates with transferable skills.
• Employer Branding: Enhancing the company’s reputation as an employer of choice through positive workplace culture and competitive benefits.

As an example of the very real impact these strategies have, the Eastridge team successfully increased staffing capacity to 91% for a manufacturer in Cleveland, Ohio, by implementing a three-phase approach (Eastridge). This involved more effective candidate outreach, facility tours to educate applicants, and ongoing onsite management to reduce turnover by 42%. The project ultimately resulted in a 97% show-up rate and 93% retention, directly supporting the importance of proactive recruitment and workforce retention strategies in manufacturing​

3. Training and Development Programs

Ongoing training and development are critical for maintaining a skilled and adaptable workforce. Programs like the GATE (Gateway to Achieving Talent Excellence) program provide comprehensive training and assessment for new entrants into manufacturing, ensuring that employees have the necessary skills and knowledge to perform their roles effectively and adapt to changing industry demands.

This program has helped a wide range of manufactures expand their talent pool and significantly improve retention rates.  For example, one company needed soldering technicians, but had difficulty finding qualified candidates with the required one to two years of experience. Eastridge customized the GATE program to include a soldering assessment to evaluate candidates' skills and potential resulting in a fresh slate of soldering technicians, many of whom were new to the field (Eastridge).  In another example, the Eastridge GATE program helped a medtech startup quickly scale production by expanding its manufacturing workforce by 300 headcount in just a few months (Eastridge).

4. Employee Engagement and Retention

Employee engagement and retention are vital for reducing turnover and maintaining productivity. Strategies to enhance engagement and retention include:

• Career Development Opportunities: Providing clear pathways for career advancement and continuous learning.
• Flexible Work Arrangements: Offering flexible hours and remote work options to accommodate employees’ personal needs.
• Recognition and Rewards: Implementing programs to recognize and reward employee contributions and achievements.

Several manufacturing companies have improved retention through leadership training and recognition programs. For instance, Vermeer Corporation integrates core values into its strategic roadmap, focusing on leadership and employee engagement. Employees are more likely to stay when they feel connected to the company’s mission and values​(The Manufacturing Institute)​ (The Manufacturing Institute).  These types of programs can reduce turnover by significant margins—up to 50% in some cases​(Bright Horizons Global Homepage). Another example is Mutual of Omaha, which uses learning and growth plans to achieve a 94% favorability rating among new hires and an 86% retention rate​(The Manufacturing Institute).  These examples show that programs specifically aimed at employee engagement have a real impact on retaining talent – key to upskilling a workforce and gaining a competitive advantage today and in the future.

5. Leveraging Technology and Automation

The integration of technology and automation in manufacturing processes can enhance efficiency and reduce dependency on manual labor. However, this requires a workforce that is skilled in operating and maintaining advanced technologies. Investing in training programs that focus on these skills is essential.

One example that illustrates this perfectly is through a global consumer packaged goods (CPG) company that increased productivity by over 70% in processing areas and 280% in packaging by automating key processes. This transformation was not just about technology; the company collaborated with local colleges to retrain staff for high-tech roles, ensuring that automation enhanced their workforce capabilities ​(McKinsey & Company). This case illustrates how investments in automation can reshape talent management strategies and improve productivity.

6. Building a Flexible Workforce

Having a mix of full-time and temporary employees allows for greater flexibility in meeting production demands. Temporary staffing can help manage seasonal fluctuations and unexpected surges in demand. Partnering with staffing firms that understand your business needs can provide the necessary agility.

Global aerospace and defense leader, Northrop Grumman is an example of a company that has successfully implemented flexible work models, offering a variety of arrangements such as four-day work weeks and hybrid work schedules. These flexible models allow the company to attract talent by accommodating employees’ needs while maintaining operational efficiency ​(The Manufacturing Institute). Flexible staffing is also becoming more common in manufacturing, where temporary workers help meet fluctuating demand​ (The Manufacturing Institute).

7. Enhancing Workplace Culture

Creating a positive workplace culture is key to attracting and retaining talent. This includes fostering an inclusive environment, providing opportunities for professional growth, and ensuring work-life balance. A strong workplace culture can enhance employee satisfaction and productivity.

The impact of workplace culture is discussed in a conversation between Eastridge’s CEO, Seth Stein, and former CEO of WD-40, Garry Ridge (Eastridge).  In the conversation, Ridge emphasizes that a strong company culture, rooted in values and servant leadership, is essential for creating a workplace where employees feel fulfilled and happy. He shares how the culture at WD-40 led to a remarkable 93% employee engagement rate, which directly contributed to improved company performance and long-term success​.

Another example, comes from nVent, a global company that designs and manufactures electrical connection and protection solutions.  nVent prioritizes culture as a tool to attract and retain talent, with initiatives driven by a highly engaged leadership team. They focus on creating an inclusive environment that makes employees feel valued, helping them stay motivated and connected to the company’s broader goals ​(The Manufacturing Institute)​ (CMTC). Additionally, Power Curbers, a manufacturer of concrete paving machines and curbing equipment, has implemented a profit-sharing plan that fosters a strong sense of belonging and ownership among employees ​(CMTC).

Conclusion

Strategic workforce planning is essential for addressing the challenges facing the manufacturing industry. By focusing on workforce analysis and forecasting, effective talent acquisition, training and development, and employee engagement and culture, companies can help close the talent gap in manufacturing and improve efficiency.