How to Overcome a Talent Shortage in Manufacturing With Strategic Workforce Planning

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This article was updated on July 26, 2018.

There is a talent shortage in U.S. manufacturing, according to Deloitte. In fact, the manufacturing industry needs 3.5 million jobs filled by 2025, and as many as two million of those jobs could go unfilled because of the current skills gap, Deloitte reports.

Strategic workforce planning (SWP) can help businesses take a proactive stance in minimizing the impact of a skills gap and ensuring they have the talent they need to grow and thrive. According to Strategic Drift: How HR Plans for Change, a study conducted by The Economist Intelligence Unit (EIU) and supported by the ADP Research Institute, 91 percent of senior executives in manufacturing businesses consider it critical. HR leaders in manufacturing can use these strategies to achieve hiring goals.

Strategic Workforce Planning: What HR Leaders Need to Know

SWP seeks to align an organization's long-term hiring, training and HCM plans with business goals and objectives. Ultimately, SWP goes beyond just planning long-term hiring needs, it seeks to improve internal HR performance and create a better working environment. HR leaders can incorporate a range of solutions into SWP including:

  • Expanding recruiting efforts, targeting specific candidate pools and aligning hiring with long-term needs
  • Evaluating human capital within the context of the growth plans to better deliver on business goals
  • Exploring levers such as compensation, benefits and flexible schedules to stay competitive, increase retention and improve the working environment
  • Engaging champions at all levels of the business to consider how hiring impacts their efforts
  • Investing in technology solutions that help streamline SWP efforts

5 Ways Manufacturing Firms Can Incorporate Strategic Workforce Planning

1. Develop a Clear Understanding of SWP in the Context of Your Goals

While definitions of SWP vary from business to business, there is important overlap. SWP covers hiring plans, recruiting talent, retention of key workers, but it also should help to shape organizational processes, systems and technology stacks needed to support growth. Manufacturing firms planning to use SWP to solve a talent shortage should first define their business goals, and then think holistically about how SWP can be embedded into the organization's DNA to become a sustainable solution.

2. Establish Support for SWP Throughout the Organization

Different organizations have unique perspectives on who owns SWP, whether it's senior management, finance or HR. When your industry is facing a talent shortage, it's important that all stakeholders focus on the solution. Senior management should make SWP a priority, HR must be trained and adequately resourced to support and focus on implementing it and hiring managers and frontline leaders need to be trained on how to make SWP a focus during their day-to-day management efforts.

3. Focus on Skills

Manufacturing requires a unique set of skills, which means SWP needs to be built with skills in mind. According to the report, 36 percent of senior executives (in all industries surveyed) say the main objective of SWP is to stop skilled people from leaving, 33 percent believe it's to plan around future skills requirements and another 33 percent believe it's to find new people to plug skills gaps.

Each of these elements is important to solve manufacturing's talent shortage — increasing employee retention, aligning recruiting with future skills needs and thinking about training and recruiting to meet immediate skills needs can help businesses achieve long-term growth and momentum.

4. Bring Continuous Improvement to the SWP Process

Lean manufacturing, which eliminates waste to maximize productivity, has been a crucial component of manufacturing for decades. It can help businesses develop a laser-sharp focus on tasks that are the most urgent. When it comes to SWP, this can include targeting the areas that will give you the greatest return — like hiring or retention — and finding efficient, cost-effective ways to implement strategies that yield results.

5. Explore the Impact of Workforce Planning Tools

Organizations that embrace SWP can explore how different elements impact their business. Career ladders can help create growth paths, job analyses can help improve hiring and competitive salaries and benefits can help increase retention. HR leaders should explore what works best for their organization and focus their efforts where they can make the biggest impact.

Manufacturing firms may face a growing talent shortage, but SWP provides a proactive way to meet the challenge. From developing a better understanding of the talent you need to customizing programs to improve retention, SWP should help install strategic HCM as a core value throughout your enterprise operations.