June 9th, 2022
The Third and Most Important Factor That Will Define Your Company’s Future
This is the third blog to complete the series entitled the three “M” s that Will Define Your Company’s Future. The final “M” and perhaps the most important is Manpower. Your company can have the greatest Marketing plan and invest in the most modern automated Machinery, but without this third M, Manpower, you will be dead in the water. Manning your company with the required level of people, both on the factory floor as well as the office, has become quite a challenge these days. Achieving proper manpower levels was hard enough before the pandemic, but COVID took finding and keeping people to a whole new level. The pandemic really shuffled the deck as it relates to finding and keeping an adequate and effective workforce.
Due to the pandemic, three major changes occurred among the labor pool.
Number 1. The available pool of reliable factory workers has further diminished. Many employees became disillusioned with their jobs during the pandemic. This has been referred to as the Great Resignation, with a record number of Americans quitting their jobs. In April of 2021 alone, 4 million Americans quit their jobs, and in August, a record 4.3 million workers resigned their positions. It seems the pandemic caused people to re-assess where they are in life, their working conditions, the number of hours spent at home vs. work, their pay, and their work conditions. So, with demand for many types of workers being at an all-time high, a record number of workers decided that the grass looks greener somewhere else. Workers who lost their jobs in other industry segments were not readily available to fill fenestration factory jobs because they were being paid additional unemployment benefits to stay home. Now that these benefits have expired, many are now no longer seeking factory jobs because their outlook on life has changed, or they have had a taste for other types of work that they may like better or for which the wage rate is higher.
Number 2. Working from home has now become a thing. In order to retain office and management staff and make it safer for them, many companies allowed office and management staff to work from home during the pandemic. According to a Citrix article, since the coronavirus pandemic began, 62 percent of employed Americans have worked from home—and 60% of those remote workers prefer not to return to the office since public health restrictions have been lifted. Indeed, competent, reliable and self- motivated people found that they could work more efficiently from home due to a number of factors. People can spend more time on the actual job when they are not spending hours commuting to and from work. They also save money by avoiding expenses such as gasoline, car maintenance and repair, as well as daycare. Working from home also enables a better balance between family vs work life by increasing flexibility. They lead healthier lives, both physically and psychologically, by taking breaks to exercise, taking a walk outside, petting the dog or preparing a healthy snack. Some companies are embracing and supporting this work from home trend, while others are pushing back.
Elon Musk is not a supporter. He believes new and innovative products are invented by employees working in teams in the office together. Musk recently emailed his employees with the subject line “Remote work is no longer acceptable.” He stated that Tesla creates and makes “the most exciting and meaningful products of any company on Earth. This will not happen by phoning it in,” stated Musk. According to an article in the Washington Post, Musk told his workers to return to the office or go away! But the fact is that now that office workers have gotten a taste of how much happier and more efficient they can be while working from home, the option of doing so will now be a new requirement for many. This is one more thing that any company will need to consider when it comes to attracting and keeping employees among the post-pandemic labor pool. Indeed, this recent article by NPR outlines how, for many, the idea of working in the office all day, every day, will now be a “deal breaker.”
Number 3. Rising Inflation Rates will make it even tougher to lure and keep employees for the long term. With inflation and interest rates rising, home affordability falling, and gasoline prices surpassing $5 per gallon, the available workforce will be even more difficult to lure and retain when it comes to maintaining adequate staffing needs. Wage rates will need to be higher, work from home options will have to be offered for non-factory workers to help ease the cost of commuting, and some sort of “adjusted for inflation” payment system will need to be considered to help offset the inflation rates. Otherwise, an employee will make less and less each day as inflation bites into the value of each dollar earned. Back in the late 70’s, inflation was so bad that companies had to institute what was called COLA which stands for “Cost of Living Adjustment.” With this system, you got your pay stub, and it had a line showing your earnings with an additional amount, the COLA, added on to your pay to keep you whole. This author hopes it does not come to that, but one thing is for certain. Today’s manufacturing employer will have to implement employee retention strategies to keep employees satisfied, engaged and on board with the company culture. Otherwise, high attrition rates will lead to higher recruitment costs, higher training costs, low morale, and poor quality assurance.
So, there you have it. The third M, Manpower, complements a sound Marketing Plan and an investment in the best Machinery that your company can put on the manufacturing floor. Together, a focus on these three areas will define your company’s success rate in the years ahead.
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