A Lack of Workforce
The industrial market is still suffering from record numbers of unfilled positions, compounding the issue of a labor shortage that has existed for years prior to the pandemic. In fact, the employment in manufacturing has dropped by 270,000 since the beginning of 2020. Though there has been improvement in recent months, manufacturing HR departments need to look at new recruitment strategies. Tactics can include referral or hiring bonuses or promoting a more flexible work environment. Also, recruiters may find more success by focusing recruitment from hard hit industries, like food service.
The Supply Chain Crisis
No segment of the economy has escaped dealing with supply chain issues. In the past, profitable manufacturers introduced inventory management to keep material on hand at a minimum to reduce costs. This just-in-time inventory management process has reduced inventory counts, intensifying supply chain issues. Consequently, many manufacturers have developed a “safety net stock” approach. This practice keeps essential materials on hand to help alleviate some material shortages. With the recent tariff war, there has been a drive to bring manufacturing back to the states to decrease the reliance on overseas suppliers. This trend is helping many manufacturers find ways to overcome procurement challenges.