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Manufacturing 2025: 5 Trends Shaping the Industry

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Talent acquisition and retention are hot button issues for most companies, but manufacturing organizations are feeling the pressure more than most. The lack of available talent is already having a tangible impact on the industry, with many areas across the business seeing reduced performance, missed product launch dates, lowered on-time deliveries, and an increase in unscheduled asset downtime, just to name a few. 

The fight for talent in manufacturing is ever present and some of the top drivers causing manufacturers to focus on talent are centered around growth objectives, digital transformation (DX), agility, and innovation. Now, more than ever, manufacturers need to focus on adjusting how they manage employees and utilize technology to maximize performance, and ultimately positioning them for future success into 2025 and beyond.

Below are five major manufacturing workforce trends that are likely to shape the industry by 2025. 

Trend #1: The rising importance of digital skills will change how manufacturers attract, retain, and train employees

Digitally transforming as a manufacturer can mean entirely shifting  products and services – or changing systems as a business. The impact of the COVID-19 pandemic has shown just how quickly changes can occur. Supply chain disruption, evolving government and regulatory requirements, and shifting production capabilities to meet public demand are just some of the ongoing struggles for the industry. The pandemic has not only brought on challenges with production, but it has also highlighted the need for particular skill sets in the industry – specifically, those in the talent market with digital skills. 

Digital skills are lacking in most industrial organizations, and bringing people who have them into the company will be the only way to effectively support DX efforts. As manufacturers continue to modernize their plants and operations, they are realizing change is needed when it comes to talent acquisition and there needs to be a stronger emphasis on an employee’s skill set rather than their formal education.

Trend #2: Hybrid and flexible work models will remain across the industry, impacting workforce recruiting, retention, and collaboration processes

Since the onset of the great disruption brought on by COVID-19, all industries have had to reinvent the ways in which they work. Prior to COVID-19, remote work had never been a widely adopted practice in manufacturing. In fact, research by IDC showed that pre-COVID, only 2-12% of the manufacturing workforce would primarily work from home.

Most manufacturers had not focused on technology and resources that enabled remote work or hybrid work, and consequently have had some growing pains. Like any business, manufacturing employees, whether on the plant floor or working from home, need to stay connected to their company’s technology to be most effective. To foster collaboration, important data and information needs to be accessible from anywhere on any device and in a secure way. 

A first step that manufacturers can take is to provide real-time visibility into operational data as well as analytical tools that help employees make decisions. This needs to be provided to all employees and especially those that work remotely, so that they can respond more quickly to rapidly changing business conditions. 

Trend #3: Manufacturers will accelerate their investments in automation and knowledge management tools to reduce the impact of experienced employees leaving the business

The speed and complexity of manufacturing operations are increasing faster than ever before, and manual processes are holding organizations back. Reliance on outdated technology leads to increased costs, wasted time, data inaccuracies, decision latency, limited traceability, poor communication, and a lack of process standardization. 

Manufacturers need to rethink their approach and utilize technology that can help them eliminate manual types of work - which in turn frees up workers, allowing them to focus on higher-value activities to further drive improvements. 

Additionally, the younger generation of workers in the talent market possess the digital skills manufacturers desperately need, but they lack the tribal knowledge of more experienced workers. Having a human capital management (HCM) solution that includes knowledge management allows experienced workers to share their tips and tricks with newer workers, leading to more efficient and effective onboarding. 

Trend #4: Manufacturers will shift their workforce strategy to go beyond bottom-line savings and consider how to serve employees better

Given the nature of the industry, it comes as no surprise that most manufacturers take their efficiency and cost operations mindsets and apply it to their workforce. And while cost savings will always be important to manufacturers, it is important to realize that greater value can be found by focusing more on the employee experience. 

So how can manufacturers improve the employee experience? Here are a few ways:

  • Build a culture of transparency and trust to foster innovation, employee engagement, brand recognition, and profitability 

  • Empower employees to have autonomy in their work by providing access to tools and information

  • Empower managers by training them to lead hybrid teams and offer them core leadership skills

  • Ensure team members are informed and not isolated by providing the technology they need to collaborate and have a voice

By having a closer connection with employees, companies will better be able to identify potential employees within the talent market who are likely to thrive and those that are likely to leave.

Trend #5: Technology adoption/maturation will continue, enabling new ways to drive productivity and performance improvements as well as operational agility

As manufacturers progress toward the goal of embracing the future of work, it is important to realize the opportunities for technology to transform operations. Given the siloed nature of manufacturing, connecting disparate data sources and applying analytics will be key components to identifying inefficiencies and driving improvements across organizations.

Workforce management technology offers performance-based tools to enable all employees. Operational agility can be achieved by leveraging demand-based scheduling to align available and qualified employees to demand. Functionality like absence management tools is critical to help managers redeploy employees to cover shifts when an employee calls out sick, limiting downtime and improving resiliency. And with all this technology available on any device, it makes it easier for workers to complete their tasks and stay connected – no matter where they are working.

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Employees are the backbone of any organization and success hinges on the ability to maximize the potential of the workforce. To remain competitive, manufacturers must focus on changing how they manage their workforce and the technology needed to maximize performance.

Learn more about the top 5 workforce trends shaping the manufacturing industry by 2025 here.