How to Attract and Retain Talent in Manufacturing & Distribution

Talent acquisition and retention continue to be challenging for manufacturing and distribution industry leaders and their HR professionals. Industry leaders are turning to innovative strategies to stay competitive and encourage growth and engagement. Based on insights from our survey, the Manufacturing and Distribution Employment and Compensation Outlook for 2024, here are some of the key trends and challenges facing the M&D sector in 2024. 

Impact of technology on manufacturing and distribution labor  

We continue to see growth in advanced manufacturing roles, impacting the types of workers needed. Some examples of the knowledge required for advanced manufacturing roles include:  

• Programming and troubleshooting automated equipment that have taken over routine tasks like welding and assembling.
• Solar panel installation and wind turbine maintenance from the growth in “green collar” jobs.
• Understanding algorithms and the ability to interpret data into actionable plans with the help of artificial intelligence.
• Navigating cloud-based systems to manage inventory and track systems.
• Programming and maintenance for enhanced delivery systems. 

These new and evolving roles are creating a heightened need for increased skills within the M&D talent pool.  

Addressing the skills gap and shortage  

M&D companies continue to see a skills shortage among workers, making it challenging to find the talent necessary to perform technical and operational skills of varying complexity. The National Association of Manufacturers recently reported that the current skills gap could mean 2.1 million jobs will be left unfilled by 2030.  

Organizations are addressing this by:  

• Actively recruiting from technical colleges;  
• Creating career mobility; and
• Upskilling and reskilling.  

Succession planning  

As demographics shift, M&D leaders must proactively address the impending wave of retirees with succession planning. It’s crucial to understand the impact these exits may have on an organization’s operations and how to mitigate any challenges they may pose.  

During the succession planning process, M&D leaders should ask the following questions: 

• How can institutional knowledge be preserved and/or transferred?
• How much knowledge/skills redundancy does each functional area maintain?
• What skills gaps need to be addressed?
• Is there a job architecture and career ladder in place that will assist with workforce planning?
• Which vacated roles will remain as part of the organization’s structure and which may be replaced with new/different roles? 

Competitive compensation  

While undergoing the workforce planning initiative, compensation will be a key component in forecasting. Budgeting for succession planning, as well as recruiting efforts and retention initiatives, requires a solid foundational knowledge of the competitive landscape of compensation.  

Base salary and bonus are two important components of a compensation package. Equally important (and sometimes ignored) is the value of the total rewards package. M&D leaders and their HR professionals need to continually evaluate and communicate their total rewards offerings to employees to make employees aware of the value proposition the employer is providing to them.  

Impacts of changing pay legislation  

More than 20 states are expected to raise their minimum wage in 2024. While the manufacturing industry has managed to increase many workers’ pay rates above minimum wage, it is important for organizations, HR, and compensation leaders to understand the impact of these changes with respect to their compensation structure and possible compression issues that may arise from the minimum wage change. As the external market is monitored, it is important to continue to evaluate internal equity. Salary structures and position matrices are effective tools for balancing external competitiveness with internal equity. 

Stay informed to stay ahead  

To learn how to equip yourself with actionable steps to strengthen your talent strategy, dive into the valuable insights presented in our Manufacturing and Distribution Employment and Compensation Outlook for 2024.