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INDUSTRY SNAPSHOTS

Manufacturing

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Building HR Solutions for the Manufacturing Industry

With 54 percent of manufacturers reporting that they are unable to find candidates

with the right skills, companies must use benefits to recruit and retain skilled

workers.1 One place to start - nearly half (46 percent) of manufacturing industry

employees say improving their benefits package is one thing their employer

could do to keep them in their jobs.2 Voluntary benefits can be used to bridge the

educational gap and allow manufacturers to create a more qualified workforce.

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1. Technology

If capitalized and managed correctly, the advent of smarter products

and Internet of Things can allow firms to more actively monitor and

optimize plant, asset, and supply chain performance. These advanced

technologies are creating a demand for employees who understand

traditional hardware, as well as those that understand software and

programming.

2. Uncertainty in the energy segment

The disruption in oil and gas and energy has created big questions for

Industrial firms about how and where to play in oil and gas and within

the broader energy grid.

3. Supply chain management

Supply chain management will continue to be a key challenge for

industrial products organizations. Consolidation among industrial

products firms is predicted.

Industry ChallengesVolatile financial markets, reduced commodity prices and lackluster growth continue to challenge manufacturers. The relatively stable U.S. market is attracting more foreign capital and competition. To better compete with global competition, U.S. companies must integrate technology and data analytics into all facets of their business.3  

A few key issues affecting the manufacturing industry are highlighted below4:

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HR Challenges

1. The cost of turnover

Replacing one employee costs, on average, over $10,000.6 Per 1,000 employees, the

average manufacturer loses more than $1 million per year due to turnover.7

2. Employee work/life balance

The average workweek in this sector is now 42 hours, the highest since World War II.8

This signals a positive upswing in the industry, but employee stress and fatigue can

contribute to workplace accidents.

3. Employee productivity

With 37 percent of all employees saying they are distracted by financial stress while

at work,9 the average manufacturer is losing more than $850,000 every year per

1,000 employees.10

According to a research report by the Society for Human Resource

Management, HR professionals in the manufacturing industry are

reporting some of the highest levels of recruiting difficulty. Reasons

include lack of needed work experience among candidates, competition

from other employers and candidates’ lack of technical skills.5 A few

other HR challenges in this industry include:

of employees are distracted by financial stress while at work6

37%37% (per 1,000 employees7)$850,000

(per 1,000 employees5)$1 million

average cost to replace one employee4

$10,000

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Trends

1. Innovation and technology

U.S.-based manufacturers and distributors are lagging behind their

non-U.S. competitors in their use of information technology. Overall,

U.S. companies need to look more at harnessing technology resources

to drive innovation or transformational change.  Manufacturers should

also be focusing on ensuring their IT security strategies remain

effective for customer security and protection of intellectual property.

2. Mergers and acquisitions

Companies are looking with renewed interest at merger and acquisition

opportunities as part of their growth strategies. Deal prices are drifting

higher and this will mean that buyers need to plan transactions

carefully, from the identification of compatible candidates through

due diligence to final integration. For those looking to sell, it will be

important to demonstrate consistent profitability to position their

companies for such transactions.

3. Enhanced benefits packages

In the current marketplace, employees have more flexibility to seek

out employment opportunities that better fit their needs and wants

rather than remain in a position for its job security. In fact, 45 percent

of employees say that they would be likely or very likely to look for

other jobs outside their current organization within the next year.12

Employers may look at enhancing benefits packages with flexible work

hours, expanded benefits, more vacation or medical leave options.

As voluntary benefits have become more mainstream, they play an

important role in enhancing benefits packages to satisfy employees’

needs. Employers are increasingly embracing non-traditional voluntary

benefits as a method of providing enhanced benefits packages.

Purchasing Power’s employee purchase program is one of the

non-traditional voluntary benefits that supports key HR objectives

by providing a no-cost, no-liability benefit that gives employees a

manageable, convenient way to access products and services that are

often out of reach.

Trends to watch in the manufacturing industry include: 11

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1US Bureau of Labor Services Job Openings and Labor Turnover Survey. 2 2016 Aflac WorkForces Report. 3RSMUS.com, “8 Trends in Manufacturing to

Watch in 2016,” Steve Menaker and Joe Brusuelas. 4Deloitte.com 2016 Industrial Projects Outlook.5SHRM New Talent Landscape Report.6 CBSNews.

com, “How Much Does It Cost Companies to Lose Employees,” Suzanne Lucas, Nov. 2012 7US Bureau of Labor Services Job Openings and Labor

Turnover Survey, 8Business Insider, “US Manufacturing Workweek Hasn’t Been This Long Since WWII,” Rob Wile, Dec. 2013 9 Harris Poll conducted

on behalf of Purchasing Power, 2015. 10US Bureau of Labor Statistics Employer Costs for Employee Compensation, 11 RSMUS.com, “8 Trends in

Manufacturing to Watch in 2016,” Steve Menaker and Joe Brusuelas. 12 Society for Human Resource Management (SHRM), “Employee Job Satisfaction

and Engagement: Revitalizing a Changing Workforce,” April 2016.

Citations

About Purchasing PowerWe help employees who are underserved by traditional financing options access life-enhancing products and services. Employees can purchase the items

they need and affordably spread payments across 12 months to give them peace of mind and control over their finances. Our pricing is transparent with no

hidden fees, no interest, no credit checks.

Why We Do It

• To improve employee financial well-being

• To empower people to take control of their lives

• To help organizations recruit and retain employees

Visit us at PurchasingPower.com/Employers.

“Purchasing Power” is a registered trademark of Purchasing Power, LLC. Other trademarks or registered trademarks used are the property of their respective owners.

Pub. Date 02.2017 © 2017 Purchasing Power, LLC. All rights reserved | * Definitive 2016 customer survey responses