Part 1 of the “State of the Mill Industry” series
Mill manufacturing is facing a labor shortage at a scale not seen in decades. Just as consumer demand begins to rise in response to global economic growth, nearly half of the industry’s baby-boomer workforce is retiring, with only a fraction of those vacancies set to be replaced by new talent. And if analyst predictions are correct, this challenge could soon bloom into a full-grown crisis.
In the United States alone, 4.6 million new manufacturing jobs are expected to be created within the next 10 years – on top of 2.4 million openings that will remain unfilled due to a skills shortage. This finding in a 2018 joint study released by Deloitte and the Manufacturing Institute is especially troublesome when you consider that this talent gap will cause cost the U.S. economy $2.5 trillion.
There’s a lot at stake for mill manufacturers as they fix the talent gaps in their workforce. However, this is not something that can be resolved by hiring more people. Executives need to take drastic action to revitalize talent acquisition and retention strategies by focusing on employee behavior beyond the traditional HR function.
Matching operations to the skills of all generations of workers
Talent is available, but attracting the right people is a top concern – surpassing that for material costs. In fact, students are graduating with chemical engineering degrees and receiving job offers from mills in areas such as Maine, Washington state, and Oregon. The average wage is also rising – for example, paychecks in the U.S. paper industry went from $51,000 in 1999 to nearly $76,000 in 2017.
Despite these job opportunities, the traditional image of working in a mill shop is not as enticing for younger workers as it was for the generations before them. Citing concerns like remote locations to slow adoption of technology, younger candidates feel the industry requires them to take a step back from the modern conveniences of today’s digital world. And since existing workers have been doing their jobs for decades, new-hire training is incredibly perplexing because current skill sets include instincts that are second nature to the trainee but not to the trainer.
As burdensome as today’s workforce challenges are, technology offers a rich opportunity to rethink how plant operations will run in the future and where the workforce will fit into that model. For example, a growing segment of mill jobs can afford people to work at a location of their choice, telecommute into a paper mill, and act as a supportive contributor to the on-site team. Another promising development is the use of augmented reality to provide training and collaborative expert support as access to experienced workers is spread over a larger and larger base of operations.
An even more transformational opportunity for the future of mill jobs can be seen during a simple walk through a paper manufacturing plant. Some plants run milling machines on the shop floor that are 300 yards long and require only a few operators to run it. There’s so much automation and technology involved that the machine is self-governing and generates data that provides insights into operational performance and the potential for further optimization.
This transition from an operator to an operator analyst is a strategy that many companies are pursuing. The workforce is steadily becoming one that is manufacturing-savvy as well as equipped to use the latest technology, turn data into insights, and learn new machinery with ease in the context of the factory.
Calling HR to the boardroom fuels a much-needed workforce transformation
As tremendous as the opportunities to evolve operations to match today’s workforce skills are, none of these changes can happen without the inclusion of HR leadership in the boardroom. Unfortunately, this is not the case right now for 91.4% of organizations, according to SAP performance benchmarking.
Including HR leaders as a vested partner in the success in the business strategy is of paramount importance. They can create a culture that encourages employees to learn continuously, extend opportunities to attain new skill sets, and connect the dots between individual contributions to the overall success of the company.
HR organizations can then support the corporate strategy by taking a more tactical approach to acquiring and retaining the best talent available and assigning the right jobs. With the help of an intelligent HR platform, employees can access the right tools and capabilities to affect strategic changes. This move not only ensures that the operation runs well, but also increases engagement as employees are given a chance to contribute to the business in ways that are meaningful to them.
Taking control of the one thing that can impact the entire company
In the mill products industry, certain elements cannot be controlled – such as raw material costs and economic factors. However, your HR strategy and your workforce are the two things that can be shaped and developed into critical assets.
Companies that successfully incorporate HR into their business strategy are the ones responding to change and taking advantage of significant opportunities for improvement. They don’t look at their workforce as a mechanism to make a widget to sell. Instead, they consider each employee as a strategic advantage that should be leveraged holistically across the operation.
For more on how the right HR strategies can transform manufacturing, see Plant Tours In The 21st Century: How Human Resources Leaders Can Stay Connected.