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  Manufacturing Insights   |   November, 2011
The Changing Requirements of Labor in U.S. Manufacturing
by Thomas R. Cutler
 

The next national election is exactly one year away. Regardless of political points of view or efforts to re-shore manufacturing to the United States, the role of manufacturing labor in this country has changed significantly during the past year. Keith Wisner is Operations Vice-President with ResourceMFG, a staffing firm which specifically provides manufacturing workers, reflected on these dramatic changes in a turbulent 2011 and looks ahead to an unpredictable 2012.

Wisner suggested, "Manufacturing executives in 2011 and continuing next year must be able to adjust to uncertain economic conditions. This means that the U.S. labor force must be increasingly flexible and on- demand. Manufacturers have a greater need than ever before, for trained, skilled, and agile workers to meet these changing requirements."

In the past, with consistent sales, production, and orders, U.S. manufacturers have been able to hire a predictable workforce internally. Fear of economic trends and market volatility has resulted in anxiety to add full-time laborers. With increasing health insurance rates, workers' comp premiums on the rise, and significant litigation costs, the hiring practices of the past will never resume.

The current response to this economic miasma is a stubborn nine percent plus unemployment rate, significantly higher in several states. This does not mean U.S manufacturers are not in need of workers; to the contrary. It does mean the hiring processes must be agile and adaptable to the new economic realities.

One of the most carefully watched metrics for all U.S. manufacturers is continuously improving productivity rates. Wisner insists, "Driven by increased competition, whether domestic or global, labor must be more skilled. From entry level workforces to the highly skilled specialists, manufacturers are increasingly in need of labor that can be successful in more complex and technical environments."

The great fluidity of manufacturing labor requirements leads to a new screening methodology that dynamically assesses, defines, and determines that the right person is hired at the proper skill level initially. The cost of poor hiring practices drains all the aforementioned productivity gains. With ninety percent of all manufacturers in the United States employing fewer than five hundred employees, the scope and capacity for this type of rigorous screening is frequently lacking or impossible. The increased compliance requirements, from signage posting to safety and quality training procedures, can cause a delay in getting a competent worker up-to-speed quickly.

Staffing Companies Answer the Demands of U.S. Manufacturers

Increasingly U.S. manufacturers turn to staffing companies to provide the on-demand labor; often some of the best full-time workers are discovered in the process. Too often too many staffing firms lack a true understanding of the nuances, skills, and cooperative production experience needed to meet the zero-tolerance failure rates mandated in a global marketplace. The generic staffing organization does not "get it." Wisner shared how ResourceMFG, which only works with manufacturers and the manufacturing workforce, combines manufacturing-specific proprietary screening programs. "The result is better recruiting for U.S. manufacturers. We are able to hire and place safer, more productive labor to manufacturing clients."

U.S. Manufacturing Labor: Until Election Day 2012

Manufacturers will continue to use specialty staffing companies over the next year because of economic uncertainly. In order to keep fixed costs (regular full-time workers) lower, U.S. manufacturers will choose to keep variable costs (staffing service labor) higher as a total percentage of the workforce.

The choice to utilize specialized staffing organizations also allows U.S. manufacturers to focus on growing business, continued process improvement, and customers, rather than staffing issues.

Despite the high unemployment rate, finding skilled, trained, reliable, screen labor is far more challenging than one might suspect. Absenteeism and deficient skills directly impacts productivity of the workforce. Workers who generate immediate plant floor productivity save time and money. Generic staffing organizations simply lack the expertise to recruit quality manufacturing labor.

Wisner sees the greatest unfulfilled manufacturing labor demand throughout 2012, across a variety of industrial sectors, with the greatest labor supply and demand challenges among the highly skilled worker, such as CNC machining, skilled welding, and plant floor maintenance professionals.

The relationship of Automation and U.S. Manufacturing

One might argue that automation by definition reduces the demand for labor. Wisner acknowledged, "It is true that automation plays a more and more important role in manufacturing. At the same time, it is also true that the often uncertain economic environment requires manufacturers to ramp up and down its labor force with shorter and shorter notice. Entry level workers still play a vital role in many such situations."

He went on to share, "Ironically, as manufacturers are getting better and better at automating, reducing labor, and increasing productivity, the need for more skilled and highly skilled labor increases. We are always retooling our recruiting strategy, internal training, and labor market analysis capabilities to better attract and retain the best and most flexible U.S. manufacturing workforce."


Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists, as well as author of more than 500 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com or at 888-902-0300. See More Details.

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