Over the next decade, 3.5 million manufacturing jobs will need to be filled, mostly due to baby boomer retirements, but 2 million of those jobs are likely to go unfilled, according to projections from the Manufacturing Institute and Deloitte. Analysts predict the hardest hit area will be skilled production (machinists, operators and technicians). Understanding the major factors that are responsible for the labor shortage will better position you to outmaneuver your competition and continue to grow.
Use the table of contents below to find out how:
Have you ever had an employee leave for $0.25 more per hour at a competitor 30 miles further from the employee’s home? Sure, you know that when factoring in all of the expenses associated with the longer commute that the employee will lose money by accepting the pay increase but if the employee only cares about the hourly wage you’ve still lost them.
Understanding what means the most to your current and prospective employees allows you to make the adjustments necessary to continue to grow. Adjustments don’t necessarily involve added expense, rather making sure your current allocation to wages and benefits is generating the highest return to your organization.
Unemployment is at its lowest levels since 1969 and yet many manufacturers are struggling to attract and retain the necessary workforce to meet production requirements and grow their businesses. Two things help you stand out in the eyes of your employees (and prospective new hires): paying higher wages and offering comprehensive medical insurance benefits.
The first step in differentiating yourself from your competitors is to determine how you stack up against their wages and benefits. Understanding your competitions pitch to prospective employees can be equally as important as understanding their product offerings in the marketplace.
The National Association of Manufacturers and the Bureau of Labor Statistics have both predicted massive labor shortages in manufacturing over the next decade. Given the impending labor shortage and the need to recruit a new generation of employees you will need to think outside the box when it comes to finding your future workforce.
If you don’t have a talent acquisition plan to find qualified manufacturing employees you had better develop one in a hurry.
Many employers simply accept that the benefits expense is simply a cost of doing business and can only be managed to the extent that increases are “less bad” than the year before. Employers of choice understand that after years of neglect proper management of the benefits expense allows them the opportunity to turn a liability into a competitive advantage.
Understanding cost allocation within benefit plans and the misaligned incentives that work against employers is the first step in generating a surplus to reallocate to your core business operations.
To employees how their benefits are consumed is equally if not more important to what benefits are offered. Employee benefits is a top three expense at most companies and yet very little resources are put in place to deliver those benefits.
Manufacturers can leverage enrollment counselors to overcome computer access issues and allow their employees customizable benefits, a concierge enrollment experience, and simultaneously move their benefits administration online.
Manufacturers spent an average of $11,990 per employee per year in 2016 for healthcare and $13,050 per employee per year in 2017 for healthcare. Change can be difficult but with a top three expense inexplicably increasing annually it may be necessary. Fortunately there are insurance advisers who can lower these costs without stripping down your benefits.
Having an understanding of how to make a change and what is involved will allow you to decide if you continue “business as usual,” accepting rising costs as the norm, or make the change to turn an expense for your competition into your greatest competitive advantage.
Many Manufacturers walk a tightrope between soliciting employee input on medical benefits and making a global decision for hundreds of employees with a small group around a conference room table. Oftentimes these meetings focus on the best way to deliver bad news as opposed to how to create an environment that allows.
Rather than trying to design a one-size-fits-all program, manufacturers can create repeatable processes that allow employees to make informed decisions at their kitchen table rather than leadership teams making educated guesses at the conference room table.
Healthcare benefits represent a top three expense for most manufacturers and yet most manufacturers don’t have access to any of the purchasing agreements for this expense. What’s worse is that there is actually a legislative disadvantage for insurers, those most employers trust to manage cost, to reduce those costs for employers.
Fortunately with such a broken system manufacturers who change their buying style are able to obtain better healthcare benefits at a greatly reduced cost allowing them to reinvest in other benefits for their employees.
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