On the one hand, unemployment remains remarkably low, hovering around 3.6% in June.
On the other hand, many industries continue to struggle with mass layoffs and workers who are quitting in droves, often only to end up hired by competitors.
The tech sector is the poster child for this, with TechCrunch reporting that businesses let go of 201,860 tech workers in the first half of 2023 alone.
This has made it difficult to grasp where the labor market stands at the moment — especially in manufacturing, an industry that doesn’t tend to soak up as many headlines on a daily basis.
Here is a quick summary of how the recent labor market has impacted manufacturing companies in the U.S., along with what C-level leaders in the industry should be on the lookout for as they address staffing questions in the second half of the year.
The manufacturing market has remained impressively resilient during a year marked by instability. The U.S. Chamber of Commerce recently published an update on America’s ongoing labor shortage. The report sheds light on a few of the key benefits and challenges in manufacturing at the moment.
In a world where casual quitting has become commonplace, employees in manufacturing seem to be staying put. After losing well over a million jobs when the pandemic began, manufacturers across the board have struggled to adequately fill their workforces, with nearly three-quarters of a million positions still unfilled in March of 2023.
Fortunately, the shortage of workers isn’t being exacerbated by a lack of loyalty. The industry boasts a remarkably low 1.8% quit rate. This is well below other sectors, such as wholesale and retail trade (3.1%) and leisure and hospitality (4.8%).
In addition, unemployment in manufacturing remains very low, around 2.4%, well below the 3.6% national average across industries. Rather than a surplus of available talent, manufacturers are facing a shortfall. In the durable goods manufacturing sector, for instance, roughly 25% of jobs remain open due to a lack of qualified individuals to fill them.
No matter how you slice it, manufacturing isn’t struggling with common labor problems like high turnover or excess workers — quite the opposite. The industry needs to fill a labor shortage gap that extends from entry positions right up to the C-suite.
So, what does all of this mean for employers — especially those in the manufacturing market? For one thing, it means don’t believe every headline you read. We may be living in a market where quitting is common. The tech sector has shed workers, but that doesn’t mean those employment conditions hold everywhere.
C-level leaders in manufacturing can’t count on a shuffling workforce to fill their company’s job openings. Simply rehiring quality talent because an individual has walked from their previous employer is a possibility in other industries. In areas like manufacturing, though, the fight for talent is still red hot.
This means employers in manufacturing must invest in attracting quality candidates, including at the C-suite level. They must amplify perks, like retirement benefits, healthcare, and remote work, whenever possible. Employers should also reinforce the speed and accuracy of their HR department’s efforts by working with third-party recruiters.
“Employers should also reinforce the speed and accuracy of their HR department’s efforts by working with third-party recruiters.”
Executive search consultants, like the team at Stanton Chase, can provide a critical lifeline that boosts recruitment efforts. Executive recruiters are equipped with deep talent networks and proven techniques that help them efficiently identify and acquire top talent. This is particularly important in a tight labor market, where a small delay can lead to a competitor hiring a candidate before you even knew they were on the market.
The labor market is in flux. There’s no doubt about that. The post-pandemic ripple effect continues to reverberate throughout the business world. However, it’s important to remember that the labor market isn’t consistent.
There can easily be a plethora of workers available in a sector like leisure and hospitality and a shortfall of manufacturing employees at the same time. Leaders in manufacturing must remain competitive with their recruitment strategies and continue to work with good talent search partners if they want to beat out the competition and keep their organizations staffed with the best individuals for each position.
Kevin McGonigle is a Director for Stanton Chase’s South Central region. Over his three-decade-long career, he has garnered extensive experience across various industries, including telecommunications, high tech, financial services, hospitality, consumer goods, and industrial. His career spans five continents and includes prominent Fortune 500 companies, private equity firms, and family-controlled businesses.
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