Demand for industrial products is as durable as ever. But thanks to globalization, manufacturers are facing a whole host of challenges – just as a critical shortage of skilled labor threatens the industry's ability to outperform the competition.
That shortage is not only a function of the ageing workforce, which is a challenge for many industries. The manufacturing industry, in particular, suffers from an image problem with the younger generation. They just don’t think it’s glamorous or “high-tech” enough. What’s more, they fear that industrial manufacturing culture is rigid and “old school” and would never be able to accommodate their ambitions. As many manufacturers know, organizations that excel in developing their people also tend to be high-performance businesses that dominate their markets. Few industrial products companies achieve this level of excellence.Most companies tend to under invest in identifying, developing and training their people – even though people are the greatest assets for any organization. Many manufacturers have been forced to hire back retirees in an effort to compensate for the failure to identify, acquire and build the workforce necessary to compete in today’s marketplace. Overall recruiting efforts are still falling well short of plan.
That’s the bad news. The good news is that the talent crisis is also an opportunity. In fact, it offers a whole host of opportunities to improve your talent management practices – and thus make the institution stronger.
Globalization may have intensified the competition from low-cost producers – but it has also opened doors to previously inaccessible pools of talent in Asia and elsewhere. Now is the time to abandon obsolete, piecemeal approaches to recruitment and training.
By seizing the chance to develop new people development skills – skills that will actually attract and retain the right sort of talent, new and old, and from a global pool – you could power well ahead of the competition in the race to achieve high performance.
Here’s how.
Aligning the workforce with your business strategy
High-performance businesses understand that workforce constraints have a huge influence on successfully executing business strategy, so they have developed an exceptionally keen understanding of their particular workforce demographics and have developed programs that are aligned with their overall goals.
By elevating human capital management to the level of a strategic function and aligning it with their overall strategic direction right across the organization, high-performance industrial products businesses are able to focus on the development and pursuit of talent throughout their global supply chain – talent that can really complement their existing corporate gene pool and, indeed, improve it.
Attracting, developing and retaining key talent
Attracting people with the skills and talents to improve the corporate gene pool hinges on a combination of a successful human capital strategy and superior workforce planning. This may seem obvious, but demographic change has greatly complicated the process.
Accumulated experience has become a more important determinant of an individual’s career than mere advancement in the hierarchy. Today’s well-educated and highly skilled young people no longer expect lifetime employment – but they do want to be able to tailor their careers to their evolving needs and expectations.
Young people favor employers who will provide them with the means to make individual decisions. And they want the chance to move sideways as well as upward in the corporate hierarchy, or to change jobs at key points in their careers.
The key to recruitment success is having and clearly articulating a “global people development” model, or philosophy, which is closely aligned with your operating model. You can start to develop that philosophy by refining your brand image to attract today’s employees as well as your customers.
Convincing younger people that you are also creative and flexible is a tougher proposition – but some companies are broadening their appeal to the young by pro-actively targeting universities and even high schools.
Of course, individuals are still likely to shop around for better opportunities if they are not nurtured on the job. A well-defined process for developing your people means enhancing your career and succession planning programs to show recruits that you are committed to long-term success. It also means demonstrating strategic investment in career development programs.
High-performance businesses focus on developing rich content for their career development programs – content that improves the overall capabilities of the organization. It is backed up with the expectation that learning is part of every employee’s responsibility. And these foundational attributes form the basis of a consistent culture of self-improvement.
Because it encompasses such a wide variety of different product types and job descriptions, industrial manufacturing is in a remarkably good position to offer plenty of career possibilities. But today’s workforce demands stretch goals. You may have to abandon some of your old ways of doing things to optimize your employees’ options, and thus maximize your chances of retaining all that talent you have so diligently nurtured.
Look for ways to make job opportunities visible across the organization, as well as investing in retraining and reassigning.
There’s no surer way of losing the loyalty of a workforce than by failing to keep them informed about critical developments. Ideally, you should solicit your employees’ assistance in tackling transition issues like layoffs.
Continuously challenging the enterprise
Despite all these efforts to attract, train, retain and minimize the loss of talent, the fact remains that many companies are coming under increasing pressure to adopt a more flexible workforce model in order to turn “fixed” cost into variable cost as it relates to the cyclical nature of most industrial companies. Re-thinking shared services and outsourcing can help.
Shared services and outsourcing – creating world-class support functions to perform processes that are highly dependent on business cycles – can trim operating costs as well as reallocate the time key employees spend on low-value functions.
The payoff
These efforts promise to pay plenty of benefits. Successful talent management is key to high performance – the ability to deliver consistently superior returns to your shareholders across industry and economic cycles, as well as changes of leadership. Now is the time to start seeing the talent shortage as an opportunity – and seize the chance it offers to create and nurture the sort of workforce that can outperform your competitors on every level.
