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Like every other industry, the manufacturing sector has felt the effects of the global COVID-19 pandemic. Among the many consequences of the crisis is a record increase in unemployment in countries belonging to the Organization for Economic Co-operation and Development (OECD).
Despite this rise in the number of jobseekers, skills shortages will continue to be a challenge for manufacturing companies in Hong Kong. This is mainly due to a persistent mismatch between the type of capabilities and skills needed by employers and what is currently available in the labour market. The labour market is also struggling with a 'blue-collar drought'. As job roles become increasingly technical and demanding, fewer people today are choosing to pursue education and careers in the technology, manufacturing and engineering sectors.
Several economic and technology trends are widening the aforementioned skills gap. They include an ageing and retiring workforce, the impact of digital transformation and a tight labour market.
Here are some of the biggest recruitment and HR challenges in the manufacturing industry that businesses are facing right now, and tips on how you can overcome them.
challenges in recruiting a skilled workforce in manufacturing
1. an image problem
For many people, the perception of manufacturing is unappealing. Perhaps even more concerning are the observations from Seema Pajula, vice chairman and U.S. Industries and Insights Leader for Deloitte, who stated that prospective younger employees view the manufacturing industry as “boring, outdated and not creative”.
If you’re female, working in manufacturing could be even less appealing as it is still a very male-dominated industry. A global study by the World Economic Forum showed that women make up only 20% of the manufacturing and production workforce.
The potential economic impact of this widening skills gap is enormous, with unfilled positions expected to create productivity losses of up to $2.5 trillion by 2028, according to Deloitte. Companies must work together with industry bodies to improve the sector’s image, so that manufacturing jobs will become more attractive to women and young talent.
So how can the sector appeal to young people, who represent the future of the industry? To this younger generation, inclusivity, environmental welfare and social conscience are far more important than they were to previous generations. The way you present your values, company and people would have to be appealing to younger demographic.
Apprenticeship programs can offer young people a route to a career in manufacturing. The apprenticeships allow young people to gain skills and experience through on-the-job training as well as undertake local trade-based education. Nevertheless, to recruit the best young talent, the perception of the industry has to change for the better.
2. the impact of automation and robotisation
Historically, there has always been a fear that new technology will mean fewer jobs. The reality is that new technologies often create different opportunities. A study by Deloitte in 2015 showed that over the preceding 144 years, technology had created more jobs than it had automated. Likewise, the World Economic Forum’s 2018 Future of Jobs report estimated that technological innovations are poised to generate 58 million more jobs than they displace.
Another Deloitte analysis highlighted that when used in the right way, automation can achieve a positive impact on productivity, employee engagement and customer value. The study cited Amazon as an example of how a company can use automation to scale warehousing and quickly ship goods during peak periods, while reducing the amount of time needed to train employees.
The use of automation and robotics should be central to modernising the image of the manufacturing sector. In the future, you are likely to see changes in the types of roles in manufacturing. This will largely be influenced by the differing and developing skills requirements in the face of technological advancements.
3. ageing and retiring workforce
Singapore and Hong Kong SAR are currently experiencing an ageing population and longer life expectancies.
Tepid population growth and lower birth rates would gradually reduce the availability of workers in the labour force. This would also pose worrying knock-on effects on the recruitment efforts of the manufacturing sector.
At the same time, companies should pay greater attention to the growing importance of mature employees in the workforce. The number of mature workers in Hong Kong had climbed by 62% within a decade to 1.24 million in 2017. In light of their amassed industry knowledge and technical know-how, mature workers are highly valuable to employers and companies should harness their potential to strengthen their human capital.
Companies must make the most of an ageing workforce and limit the loss of expertise and knowledge when experienced skilled workers retire. In our guide, ‘Overcoming the Skills Shortage’, you can find out how BMW managed to improve productivity by 7% by taking key steps to accommodate their ageing workforce.
4. impact of political and socio-economic changes
The COVID-19 crisis is one of the biggest obstacles the manufacturing industry has had to overcome in our lifetime. The pandemic has forced companies to find new ways to work so they can meet demand and stay in business, all while facing unprecedented HR challenges. Workforce gaps created by unavoidable layoffs and digital transformation have necessitated a new approach to recruitment.
For any HR manager, a reduced number of skilled workers and a smaller pool of qualified talent can pose a significant challenge. When developing your recruitment strategy, it’s important to consider how you could be more innovative, particularly for contingent talent.
5. the need for manufacturers to upskill
Upskilling your workforce is essential to overcome the skills gap. Industry Week reported that 29% of manufacturing workers believe their skill set is now redundant or will be in the next couple of years, while 38% believe this will be the case in the next four to five years.
Despite this, most manufacturers have not come around to upskilling or investing in educating their workforce for higher productivity and better retention. Even though many workers feel “under-skilled”, companies in Hong Kong SAR are not providing sufficient training and upskilling opportunities for their employees.
Meanwhile, more than half of companies in Hong Kong have revealed that they are unprepared to upskill their current employee base amid digital disruption.
In fact, the ‘The True Cost of Turnover’ survey from Tooling U-SME showed that only 36% of manufacturing companies budget for employee development.
what can you do to combat these challenges?
To tackle the manufacturing industry challenges, leaders of manufacturing firms can tap on available resources provided by the government and embrace employee upskilling initiatives to future-proof their organisations.
By developing a robust and flexible human capital strategy, you will be taking control of the factors you can influence and place your company in the best position for the future. With so many manufacturing workers believing their skills will be redundant in the next five years, companies must start taking action now.
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