How Strategic Workforce Planning Can Reduce Attrition in the Manufacturing Sector

Strategic workforce planning is one of the most important tasks the HR department handles in a company. It helps with labor forecasting and addressing staff-hour requirements so that managers can plan work better to maximize the productivity and efficiency of the workforce. Strategic workforce planning also helps in hiring better, and providing a better employee experience. Learn how strategic workforce planning can be made more accurate so you can improve employee engagement levels and curb attrition rates in the manufacturing industry. 

It goes without saying that the manufacturing industry strives to develop and maintain an efficient resource pool. The results of a production line and the success of a supply chain are directly related to the skill set and efforts of the employees who operate and manage the production . Recruiting, training and retaining the right kind of talent is essential to achieving profitability. Strategic workforce planning is essential to accomplish this. 

What Is Strategic Workforce Planning? 

Strategic workforce planning is the process of aligning your people strategies with your business strategy. Every manufacturing company works towards maximizing the productivity of its  workforce while constantly planning for future resource requirements. That is the ultimate goal of strategic workforce planning.  When done correctly, it will also help with reducing the attrition rate in the manufacturing industry. 

The strategic working planning process assists planners in answering questions like "Does our present resource plan align with our business forecast?” or “Do we possess the necessary skill sets to generate the intended revenues?". Having the right workforce planning tools in place helps decision-makers evaluate demand against supply, identify the gaps, and plan for the necessary manpower. 

When you can foresee the headcount and capabilities necessary to support your company’s objectives, it becomes simpler to address questions such as "Do our workers have the proper skills to execute our future plans?" and "Is my attrition rate too excessive to keep up with demand?" 

While workforce planning has several benefits, the biggest one is the impact it can have on attrition rates. Attrition and constant employee turnover is a major issue in the manufacturing sector, and  strategic workforce planning is essential for tackling attrition.  

• Changing skill profiles: Due to digitization, the scope of manufacturing workers' duties and the abilities required to execute their jobs are changing drastically. Without the right skills, they may end up being dissatisfied with their current job which in turn may lead to high attrition rates in the manufacturing industry. 
• A talent war: When it involves hiring, manufacturing businesses face two major hurdles:  

• • A negative perception of the manufacturing industry and a lack of allure often dissuades the youth from seeking a career in the manufacturing sector. 

• • Staffing middle-skill positions requiring specific technical capabilities developed on the job. 

• An aging workforce: The labor shortage in the manufacturing industry is exacerbated by an ageing workforce. Many individuals who currently possess the requisite abilities for these occupations may soon retire as a consequence of an aging workforce. 

Learn More: Top HR Trends in the Manufacturing Industry  

How Does Strategic Workforce Planning Work? 

Developing a workforce strategy starts with understanding the manufacturing company's requirements. Without proper data, it will be difficult for your business to anticipate the impending skill gaps they will face as a result of employee retirements and attrition.  This information is crucial for putting together a future-proof strategy, and have a competitive advantage over  peers. A workforce management software can be used to gain an overview of your organization's staffing requirements. 

Skill evaluation is a component of strategic workforce planning as well. It indicates the areas in which you will need to hire new employees and educate or retrain your existing workforce. Discovering fresh talent requires knowledge of the necessary capabilities, which may be hard to come by during the recruiting process. Instead you could focus on expanding your talent pipeline through internal mobility, which also helps engage and retain workers. 

You may also focus on developing effective training programs for both new and current professionals to assist the development of your workforce. Harnessing the knowledge of your more seasoned employees is also an effective method which can help in reducing attrition rates in the manufacturing industry. 

However, this does not indicate that your new employees must merely adapt to the way your company has traditionally operated. Strategic workforce planning also helps determine where proactive approaches to duties, maintenance, and performance management can be implemented. The plan also highlights automation opportunities for repetitive manual processes and automatically monitor performance, thereby improving the efficiency of your operations. 

Strategic workforce planning with the above characteristics will help  mitigate prevalent manufacturing difficulties, and form a workforce plan that prepares employees for the future and keeps them engaged. 

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

Why Strategic Workforce Planning Is Key To Lowering Attrition 

According to U.S. Bureau of Labor Statistics, the turnover rate at manufacturing stood at 40% in 2021. In fact, manufacturing companies lose millions of dollars in costs of employee turnover. However, once you know what strategic workforce planning is, you can apply the principles to reduce attrition rates in the manufacturing industry and keep employees engaged. There are five reasons for this: 

1. Predict Capacity Demand So Your Workforce Is Not Overburdened 

Strategic workforce planning helps project future requirements and analyze demand patterns and budgets to develop a labor projection that will serve as a foundation for future hiring. 

The labor forecast may assist in identifying training and recruiting possibilities for staff, and enables charting out  department-specific staffing  strategies. That way, organizations and employees will be able to realize their  potential without overburdening or underutilizing current resources. The result is that employees are engaged with the right amount of work, without excessive workloads or stress that could drive them to attrition. 

For the long term, a workforce management system can be used to monitor market developments and offer specific recommendations for altering workforce numbers at each production location. It is crucial to ensure that there are sufficient front-line employees to manage the manufacturing load. 

2. Design Workplaces That Are In Line With Employee Preferences 

Employees today seek flexible work schedules . With automated labor scheduling and customizable plans that account for employee preferences and needs, factory managers can provide better, more efficient schedules to front-line employees. 

In the manufacturing industry, more precise projections contribute to more predictable scheduling with minimal last-minute adjustments, enhancing morale and reducing attrition rates in the manufacturing industry. This is essential for providing employees with the flexibility they seek, and for empowering individuals to work according to their own terms. It can also help minimize overstaffing during sluggish economic periods and ramp up productivity during periods of strong demand. 

Also included in strategic workforce planning are frequent evaluations of production, both collectively and individually. If employees underperform in any manner, modifications can be made, like using a learning management system to increase output. This makes sure that workers don't feel left behind or disconnected from production objectives and increases the probability of employee turnover. 

Having a well-defined strategic plan for the workplace will allow you to manage shifts, simplify tasks, and create a manufacturing floor that respects its employees. 

3. Help Plan HR Initiatives That Directly Target Attrition

In spite of persistently high levels of unemployment in the manufacturing sector, organizations find it hard to hire competent and skilled individuals. This is why it is preferable to train and reskills the current employees so as to attrition rates in the manufacturing industry. 

Secondly, workforce planning offers an essential understanding of the connection between tasks to be done and personnel. Processes can be established where HR leaders will be notified of workers with excessive workloads and work can be distributed across the workforce uniformly. 

Some of the key steps to limit attrition rates in the manufacturing industry include recognizing top performers, promoting employee engagement, and encouraging open communication channels. Providing warehouse employees the opportunity to express their thoughts and ideas is an excellent method to obtain their candid opinions and innovative suggestions. Typically, solutions for workforce planning and management provide two-way interactions with workers. 

With strategic workforce planning, managers and the HR department can create calculators for wage hikes, incentives, and promotions. These proactive measures will prevent workers from quitting their current roles. 

At the same time, workforce analytics can help recognize the top performers and workers who are most likely to remain with your organization. Overall, workforce planning can help the management design a strategy to retain the top-performing employees. 

4. Use Data-Driven Insights to Enhance Employee Experience 

Strategic workforce planning enables HR practitioners to set benchmarks to educate CEOs on workforce concerns. Through this process, leaders can identify and fix talent difficulties before they affect production objectives. By enhancing employee experiences at the right time through rewards, reskilling, shift changes, etc., it is possible to stem attrition risk before it becomes a real problem. 

For instance, data can be collected to answer questions such as: what is the typical departmental turnover rate? How can processes be implemented to preserve workflow? How many employees will retire this quarter, and how will their departure impact operations? Data can help leaders take more informed and sharper decisions to achieve both short- and long-term objectives. 

Also, HR analytics will describe the features, abilities, and attributes of high-performing personnel. This data may be used to hire applicants who are more likely to fit into your company's culture. These employees are more likely to stay on with your company, thereby reducing overall attrition rates in the manufacturing industry. 

Learn More: The Role of HR in Industry 4.0  

Acting on Strategic Workforce Planning Insights: Tips To Reduce Attrition 

Now that you know what workforce planning is, how it works, and its benefits, here are ways to act on the insights so you can reduce attrition: 

1.Make Task Allocations Based on Data 

Assigning a role to a resource who may not have the required skill set can lead to lower productivity, disengagement and may ultimately lead to attrition. At the same time, if the assigned resource is overqualified they may lose interest and ultimately quit because their potential is not being tused. In either scenario, the likelihood of attrition is considerable. To promote employee satisfaction and quality of work, it is essential to allocate the appropriate resource to the right tasks. 

2. Optimize Employee Skill Potential to Enhance Productivity

Business leaders in the manufacturing industry know that optimal use of people potential  is not limited to working eight hours each day.  In fact, successful manufacturing companies ensure that maximum time is scheduled for result-oriented activities. Spending unnecessary time on administrative work is neither a good use of employee expertise or time. It is also not great for employee engagement. You can use strategic workforce planning to identify automation opportunities so that workforce utilization is truly optimized, and employees  do work that adds value to the business. 

3. Invest in Team Building And Company Culture

Nurturing good relationships between colleagues increases productivity and employee engagement. Businesses that place a premium on employee retention must appreciate interpersonal connections and strive to foster them. This is because strong teams result in improved communication, reduced stress, and increased production. Workforce planning insights and people analytics can be used to identify which teams are the most productive, which workers frequently share shifts together, and where team performance is lagging behind schedule. HR leaders can then plan accordingly to improve culture. 

Learn More: Why the Manufacturing Sector Should Prioritize Digital HR in 2023  

Conclusion 

Strategic workforce planning can be done efficiently using modern HR software suites. These platforms include all features an HR leader would require to  analyze staffing requirements and create the perfect schedules, shifts, and hiring profiles so that you can acquire and retain top talent. These could be mobile-based workforce management, talent management, analytics and persona-based dashboards, etc.Not only is this essential to reduce attrition rates in the manufacturing industry, it also increases overall productivity and leads to higher revenues over time.

To see how an HRMS can help with strategic workforce planning and reduce attrition, schedule a demo with Darwinbox today!