Employers continue to face issues in attracting and retaining talents in a market plagued with labour shortages and high pay pressures. This article will highlight key issues for employers and make predictions for the coming year.
Skilled manpower shortage
Labour shortages continue to persist over the year and many businesses are struggling to fill the gaps in their workforce. This problem is not specific to any sector and affects all jobs at all levels and locations. It has also impacted heavily the manufacturing sector, as well as other key sectors. According to PwC’s Manufacturing & Automotive Sectors 2022 Outlook, as the competition for human resources is on the rise, so the technology engineering positions are in high demand. Newly emerged business divisions have to hire highly skilled workers because of the “servicification” of industrial manufacturing. Many employers cite recruitment as their biggest challenge. This shortage of talent will undoubtedly impact SMEs the most, as they will have to compete with larger companies’ remuneration packages.
It is more difficult to hire international workers
Depending on the EU country, up to 10% of manufacturing workers are from other European Union states. Combining national lockdowns, travel restrictions and changes in immigration laws have dramatically reduced access to an international workforce that is more open to taking on certain roles than the local workforce.
Experts predict growing numbers of early career hirings as businesses’ response to the talent shortage over the next four years. Manufacturing is not a popular career choice for many people in EU. Younger workers view it as low wage, unsatisfactory benefits and poor working conditions. Employers in this sector should advertise that the average wage in the manufacturing sector is sometimes higher that in others – for instance, in 2022 in the UK it is 12% more than the country’s average, according to the 2022 MakeUK/PwC senior executive study. It is also important to better advertise incentives for starting a career in manufacturing (or any other career).
Retention of existing employees and attraction of new talents
Last year the record numbers of job-to-job movements occurred. This year the tendency is still here. This was driven by resignations, which indicates that talent retention is more essential than ever.
Remuneration load
The living wages have risen in 2022 for workers over 23, which results in increasing pressure on the employers due to rising recruitment costs, increased overtime bills and higher salaries. The grounds for the above-mentioned are high inflation, labour shortages and increased import/export costs. High inflation brings significant salary increase to be well-received by staff, who might otherwise join a competitor with a better offer.
Additional training and benefits
Employers should not throw money at the problem in order to retain staff members. It is becoming more important to put non-remuneration first. Employees want access to progressive learning and development opportunities and place a high value on employer’s support for employee health and well-being, as well as their environmental and sustainability credentials.
Employers have the option to invest in attractive benefits packages, recruitment drives and training opportunities. However, this option is not likely to be easy for SMEs, as they can hardly invest large amounts of cash during this time.
An advertised job can be more appealing if it offers competitive benefits. Employers should now review their benefits packages and compare them to other companies to find areas for improvement. While pension plans and other insured benefits like dental and medical insurance are often offered, it might be worthwhile to explore more flexible benefits options that let employees choose what they want. Benefits offerings will change as the workforce grows to accommodate the needs of the younger generation.
Internal mobility
It is important to pay close attention to internal mobility, as employers typically overlook their internal talents. Recruitment Process Outsourcing (or RPO) can bring significantly benefits during this process. The employers can use technology to match the skills of the internal workforce and promote internal mobility, possibly resulting even in an increase in internal headhunting. It is mutually beneficial to offer comprehensive training programs that help employees learn new skills and develop existing ones. It can help retain long-term and experienced employees and prevent attrition. Employing from within, with tailored development plans for the internal candidates, will reduce attrition and fill vacancies with culturally compatible people. Younger generations want to see real investment in their careers and won’t apply to organizations if they don’t see opportunities for further development. In some countries governments offer job planning programmes – look into these opportunities. Some of these programmes provide training for adult workers in many sectors, including manufacturing technologies. A great way to bridge the knowledge gap is to establish an internal mentoring program, which pairs more experienced workers with newer ones.
The good news is that during the recent years businesses have been able to implement changes much faster than ever before. This means that 2023 holds many exciting opportunities for innovation in employee recruitment and retention.
If you’re looking for new ideas, fresh perspectives and insights on the future of work, then you’ll want to attend HR Vision Events.
