Top HR Trends in the Manufacturing Industry

Around 64% of manufacturing companies are still in the early stages of digital transformation, and an important part of this is digitizing the HR function. In the next few quarters, the manufacturing industry will see multiple changes in the way it operates, ranging from the creation of new roles to more efficient hiring practices. This article discusses  the top HR trends in the manufacturing industry.  

The manufacturing industry  is on the cusp of digital transformation.  How will this influence people processes? What are the top HR trends in the manufacturing industry that will shape the landscape in the future?

Here’s our roundup:  

1. The rise of new, lateral opportunities for employees

Jobs in the manufacturing sector are intrinsically demanding in terms of physical labor. As an employee’s ability to  carry out tough and demanding manual tasks diminishes with age, they retire from their roles. This happens earlier than it does for knowledge workers in other industries. HR leaders in the manufacturing industry are increasingly aware of the need for experienced, professionals in the workplace, and that they don't need to retire simply because of their inability to perform certain kinds of physical labor. Businesses are using lateral opportunities and introducing HR initiatives to retain employees and give them other roles within the organization rather than having them retire. . Particularly with the increase in automation and digitization in the sector, organizations are able to reskill or upskill employees for new roles that are emerging in the modern manufacturing workplace. 

2. The need for employer branding at manufacturing companies

As the manufacturing industry evolves and innovates in the Industry 4.0, HR leaders are building manufacturing companies to be employers of choice for candidates. They are looking to make roles in the manufacturing sector more desirable by highlighting aspects such as the use of technology, the scope for innovation, and  prospects for career advancement and wage increases. Companies are also searching for talent that goes beyond what was historically considered as "employable" for the manufacturing sector, and a current HR trend in the manufacturing sector is working with universities to organize robotics contests, hackathons, etc., just like how other technology companies do. 

3. Growing use of HR analytics and people analytics to enhance productivity

With the increasing digitization of HR processes , big data and people analytics has made its entry into the manufacturing sector. HR leaders are now using people analytics for assessing  organizational productivity and efficiency and take the insights into account while  planning their HR initiatives meant to improve employee engagement and enhance operational efficiency.  

4. Renewed focus on safety and employee wellness

Employees in the manufacturing sector were among the ones that continued working throughout the pandemic. Companies in the sector had to swiftly come up with ways to keep the manufacturing plants going while also ensuring safety of employees, While the pandemic triggered the increased focus on safety and employee well-being, companies continue to upgrade and prioritize employee safety. This includes not just adhering to safety regulations pertaining to the pandemic, but ensuring safety with machinery, and working with hazardous chemicals, among others. HR leaders at manufacturing companies are also stepping up efforts to improve the  emotional and mental well-being of their workforce. 

5. The return of the apprenticeship model

The apprenticeship model is among the most efficient ways for companies to train their workforce and help young workers mold their skills. It focuses on learning while on the job, and gaining hands-on experience. Apprenticeships were popular a couple of decades again but fell out of favor. NOw, HR teams in the manufacturing sector are putting new hires on apprenticeships even after they’re trained at vocational schools and universities. Apprenticeships and similar HR initiatives  help fill skill gaps, promote better interactions between employees and their managers, and also help improve employee engagement levels in an organization. 

Learn More: The Role of HR in the Manufacturing Sector: Issues and Solutions 

6. Growing awareness around 3D printing

3D printing, often referred to as additive manufacturing, is a technique that enables the fabrication of physical items from digital models. It is an important enabler for manufacturers who need to develop prototypes or procure esoteric machine parts. HR professionals in the manufacturing sector should keep an eye on  designers and engineers so they’re on top of the emerging trends in 3D printing, and the application of 3D printing in the manufacturing sector. As HR leaders plan for upskilling and skill development for their workforce, they should ensure that 3D printing and related technologies are included in the key skills that are included in the employee training programs. .  

7. Proliferation of sustainable manufacturing practices

Young workers, those belonging to the Gen Z, are extremely conscious about the values and culture of the company they work for. In addition to other things, most young employees insist on working for organizations that have a positive influence on the planet. They  look into the charitable, ethical, and ecologically sustainable practices of their organizations before they apply for any open roles, and engage with brands that share values and ethics that they believe in. This current HR trend in the manufacturing sector is something HR leaders need to make note of. The manufacturing sector has historically been one that has left a larger carbon impact compared with others, and this is a point that several candidates consider while applying for jobs. HR leaders need to ensure that candidates and prospective employees are aware of the company’s sustainability initiatives so employees relate to the organization’s value systems and larger purpose better, and have faith in the organization’s efforts to ensure sustainable manufacturing practices 

8. Proactive efforts to improve employee engagement

The manufacturing business has long been labor-intensive, and often, the work continues to be considered dull and monotonous. As a result, employees are quite disengaged, and  consider their work transactional. An emerging trend is that manufacturing companies are working on fixing this. Research has shown that highly engaged workers are more productive. They also remain with their organization longer, which is critical considering the manufacturing industry's attrition challenges. By adopting one of the many different ways to keep employees engaged, the manufacturing sector can reduce recurring recruiting expenses and minimize production losses. 

9. Broadening skill gap, and manpower shortage

Manufacturing, like many other skill-based professions, faces a manpower shortage. IDC's analysis reveals that 45% of businesses are now understaffed in their highly skilled roles. Moreover, with a large section of the current workforce set for retirement soon, HR leaders in the manufacturing sector must plan for the replacement of the retiring employees. Instead, allowing employees set for retirement to switch to part-time employment is one  HR initiative for retaining skilled labor . HR teams must also place greater emphasis on employee skill sets -- over and above formalized and conventional learning accomplishments at the time of hiring. This will help retain employees who have been in the system for long and are retiring earlier than what’s the norm, and also help organizations bridge the labor shortage.  

Learn More: How to Overcome the Skilled Labor Shortage in the Manufacturing Industry 

10. A growing demand for people with STEM skills

Manufacturing operations are transitioning from manual, human-led processes to automated, technology-driven processes. The usage of intelligent gadgets, 3D printing, robots, artificial intelligence, 5G, and  Internet of Things (IoT) is revolutionizing the manufacturing industry. Therefore, there’s a clear increase in the need for people trained  in science, technology, engineering, and mathematics (STEM) and related fields so they can handle the requirements of the new world of manufacturing . 

11. A clear emphasis on recruiting for the future of work

HR teams in the manufacturing sector have started taking a different, forward-looking approach to their workforce planning. They keep in mind the organization's technology roadmap and create job descriptions or staffing plans accordingly. For instance, there may be fewer assemblers on a manufacturing floor thanks to the use of robots, but factories will require employees trained to program the robots. Recruiters must now future-proof job descriptions and factor in the changes in modern workplaces. HR professionals should concentrate on the skillsets candidates must possess in order to perform the job, rather than focusing on their previous work experience. Soft skills such as initiative, attitude, communication, and teamwork are crucial to future preparedness. 

Learn More: Why the Manufacturing Sector Should Prioritize Digital HR  

12. Rapid technology adoption, in light of Industry 4.0

Industry 4.0 is now a reality,  and yet 90% of investments in technological innovation disregard shourly industrial workers who constitute 80% of the global workforce. The shift towards smart factories has opened up the potential for technological innovation that is capable of influencing manufacturing as a whole, and the hourly employees who're its driving force. This is one of the top HR trends in the manufacturing industry: the need for HR leaders to ensure that the benefits of Industry 4.0 reaches the factory workers.  

13. Initiatives to improve diversity, equity, and inclusion (DEI)

This is one of the most worrying HR trends in the manufacturing industry that needs to be addressed. The manufacturing business is among the sectors that is dominated by men, and this  discourages many women from applying for jobs in the manufacturing sector. And even if they do join manufacturing companies, women are approximately 1.8 times as likely to quit the sector than males (25% vs. 14%). In the modern workplace, however,  employees want a diverse workplace, and expect organizations to make a commitment to diversity, equality, and inclusion (DEI).    HR leaders at manufacturing companies are making DEI one of their key priorities, and will invest heavily in DEI-related HR initiatives over the next few years.  

14. Increase in investments for reskilling and upskilling employees

In addition to hiring people skilled to handle the requirements of newly-emerging roles, factory managers will have to train or upskill their current employees and prepare them for the future of work in the manufacturing sectorThis would include training them to handle next-gen technology, and help enhance their  strategic-thinking and problem-solving abilities.. 

15. Talent management taking center stage

Traditionally, career pathing and continuous employee development were restricted to white-collar and knowledge workers – but career development and professional mobility is now taking center stage in the manufacturing sector too. This is one of the key HR trends in the manufacturing industry that will change the way HR teams operate, and the responsibilities they hold in an organization. Taking the time to work on employee career development, succession planning, etc. helps retain employees, establish a talent pipeline, decrease staff turnover and boost employee engagement. 

16. The need to prioritize employee experience (EX)

During the pandemic, employees' expectations changed especially with respect to flexibility in timings. Now, while the disruptions caused by the pandemic have subsided,  employees at manufacturing companies are unwilling to return to the pre-pandemic ways of working. , especially in front-line positions at the factory floor. For the HR function in manufacturing companies, this means introducing smarter shift management systems, flexible scheduling, mobile app access  and HR initiatives that are designed to deliver the kind of experiences employees expect. Instead of seeing employees as only a “human capital component”, employers in the manufacturing sector are putting employees at the center, and providing them with experiences and facilities that their peers in other new-economy companies such as tech startups get.  

Learn More: 18 Tips to Retain Talent in the Manufacturing Industry 

These HR trends in the manufacturing industry will shape operational and long-term decisions in 2023 and beyond. Next-gen cloud-based HR software, designed for the needs of manufacturing companies, can provide the tools and data you need to act on these trends and improve processes. Schedule a demo with Darwinbox to know more.