If there is one thing that can be counted on in manufacturing, that is change. As we round the corner from year-end 2017 to 2018, manufacturers need to know what to expect and how to prepare from both a practical and legal perspective, especially as it pertains to human resources issues.
During 2018, manufacturing companies can expect to see:
Continued competition for qualified labor. This appears to be an issue in all parts of the United States as manufacturers are left to compete with technology companies, such as Amazon, for qualified applicants. With the types of benefits these technology companies provide (especially the "softer" ones, such as flex time or wellness programs), manufacturers will continue to struggle to attract and retain qualified hourly and salaried personnel.
Information technology security woes. Manufacturers should not think that just because they are not Equifax or Target they are immune from a security breach. Imagine a scenario in which all company emails are hacked and divulged to the public, or worse yet, on social media. What will surface? A poorly handled quality issue that makes its way to the previously unknowing customer? A slew of racially offensive jokes that subjects the company to legal liability under Title VII of the Civil Rights Act of 1964? Companies must be prepared to face the inevitable and understand that there are more, and perhaps greater, security risks to come.
Corporate tax breaks. It has been long-promised, and is anticipated, that the Trump administration will provide additional corporate tax breaks from which manufacturers will benefit. The timing and amount of such tax breaks is unclear at this stage. However, manufacturers need to be looking forward and determining how they could best utilize these tax breaks to re-invest in the company, the employees and the community at large.
Make way for the millennials. This is not a substantial change from 2017, or any years in the recent past, but is a phenomenon that all manufacturers must continue to acknowledge and address. Millennials will, sooner rather than later, be the employees who help solve the labor issues and the future of the company. Simply put, the progressive manufacturer is going to have to create a workplace where millennials can actually work and be successful, and where other employees' viewpoints and working styles are also taken into account.
Beware of the prescription drug. An alarmingly growing trend is the use — or, more accurately, the abuse of — prescription drugs by employees at manufacturing facilities. This abuse comes in the form of oxycontin, hydrocodone and even synthetic drugs. This alarming trend presents several issues for the 2018 workplace. Will synthetic drugs show up on an employer's standard drug panel? What is going to constitute reasonable suspicion? How will a manufacturer deal with the forklift driver who is on prescription pain medication? The prescription drug triggers safety, health and even legal issues under the Americans with Disabilities Act (ADAAA).
Of course, manufacturers cannot be successful if they can only identify problems, but do not identify and execute reasonable solutions. To prepare for the challenges facing companies in 2018, manufacturers should:
Determine corporate priorities. If those tax breaks are to come, where will the gains be spent? Newer equipment? Employee pay raises? What are the company's core values? Have these values changed or shifted? Manufacturers should take the new year to redefine goals and identify new ones. Also, the public is looking for companies to invest more deliberately in their communities, and the prudent manufacturer will look for opportunities to do so as part of this planning process.
Get serious about staffing and succession planning. If, as anticipated, there will be continued competition for qualified labor, then companies must be strategic in how they recruit and attract employees. Again, the new year is a good time to examine pay and benefits and consider additional ones. What "soft" benefits can your company offer? Flex time? Community service days? One often neglected resource for potential talent is the non-college bound student. Companies should work with community and state organizations to tap into these potential employees and work with them to ensure that they have the right skills, such as "soft skills," to enter the manufacturing workforce after high school. Once the talent is acquired, the key is retention — and succession planning — to pass on historical knowledge and ability to those who are newer to the workforce.
Make information technology a priority. Often, manufacturers are more concerned about whether the press effectively runs or what new piece of equipment needs to be purchased and installed. Just as important in 2018 will be the ability of the company's computer system to withstand hacks and/or leaks. Consider an IT audit and increased security measures to protect the company's confidential information — as well as its customer goodwill and public reputation.
Catch your policies up to the times. Audit your own internal policies and procedures to determine what still works and what does not. Look for policies that are lacking but that should be put into place. For example, is it reasonable to ban all cell phones on the plant floor? What policies may make it easier to attract and retain qualified employees, including, but not limited to, millennials? Are there legal issues — such as the National Labor Relations Board's decisions affecting non-unionized employers — that your company should consider?
These are just some of the practical, and potentially legal, issues that will face manufacturers going into 2018. With sufficient forethought and preparation, the prudent manufacturer will move into the new year armed to address the unexpected changes that are sure to come in 2018.
Kathryn M. Willis practices in the Labor & Employment Law section at Burr & Forman.
Ms. Willis would like to thank Gary R. Sport, General Manager at SMART Alabama, LLC, for his valuable contributions to this article, particularly his spot-on thoughts regarding the greatest challenges facing manufacturers in 2018.