Manufacturers Can’t Find Workers. Where’d They Go?

Jul 1, 2022

This post originally appeared on Forbes on June 30, 2022. Read the original post here.

By Ethan Karp, President and CEO of MAGNET

Manufacturers are not alone in wondering what has happened to the shrinking base of American workers over the last two years. Have they all taken off for retirement in Aruba? Decided their spouse’s income will suffice? Opted for the 1099 life? Fallen into a blackhole?

Theories have been easy to come by—data, less so. Which is why I was so enthusiastic about my friend Bethia Burke’s project. President at the nonprofit Fund for Our Economic Future, her team recently set out to understand why 4 million people are quitting their jobs every month.

From the survey of 5,000 working-age Ohioans, there is much manufacturers can learn to get a leg up in the uber-competitive fight for talent.

What the Fund for Our Economic Future found:

As much as anything, the pandemic gave people time with their thoughts—time, Burke says, that many spent reflecting on the briefness of life, how they’d like to spend it, and whether their current career path aligns with their personal and professional goals. “I have never had the chance to pause and reflect about what work and what life was,” respondents told Burke. Those moments of reflection have shown up in how people are making choices. “I think the most important thing to me is how important the quality of work environment now is to people in staying with or going back to work.”

Here are some key takeaways from the survey:

  • There is no “one answer fits all” when it comes to why employees are quitting. Instead, the conversation lends itself to some nuance. People are varied, and in light of the societal shifts accelerated—if not brought on—by the pandemic, they’re clocking out and heading for a variety of next steps in life. Indeed, some have decided to make it work in part-time or 1099 roles (meaning they’re self-employed, in one capacity or another). Others have opted for early retirement. Still others have stepped back from professional life as their spouses have become the sole household earners. These folks, Burke says, cite as driving influences things like burnout or a re-evaluation of work-life balance. Long COVID, too, has kept people away.
  • The theory that people were quitting due to stimulus cash and unemployment benefits turns out to be a myth. This was a persistent hypothesis, but 62% of respondents said benefits had no impact at all when it came to keeping them out of work longer or allowing them to be more selective in job choice, while 26% said it had “a little” impact.
  • People are resigning without another job lined up. In a true testament to the fact that employers are not meeting their employees’ evolving needs, half of all workers that left their jobs in the last year did so without accepting another offer in their back pocket.
  • More than anything, work environment is pushing people to leave. This goes back to Burke’s point about the changing priorities of Americans, upon pandemic-fueled reflection. When her team asked an open-ended question about why people left their jobs, half the responses fit into four categories: negative work environment, low pay, in transition (meaning they were moving, going to school, or another life change unrelated to work), and schedule conflicts.

What can manufacturers do to combat talent shortages?

More than any other factor, employee pay was most likely to be named a very or somewhat important element of a candidate’s job search. Think of wages as a foot in the door: If you don’t have competitive pay, candidates won’t consider all the other things your company brings to the table.

But pay alone isn’t enough; today’s employees and job candidates desire workplaces with culture and benefits aligned to their list of priorities. And currently, far too many employers fundamentally misunderstand that list.

How should they begin to close this gap in knowledge? A good place to start, Burke says, is simply opening a dialogue. “Most companies don’t have a practice of listening to their employees,” she says. “That will tell you what to do. And then, the second step is responding.” Employers may find simple and low- or moderate-cost ways—providing parking or transit passes, for instance, or boosting tuition assistance—to make a substantial impact on employee satisfaction.

If you’ve been waiting for hiring dynamics to “normalize,” stop waiting. Make adjustments.

Manufacturers who have been gritting their teeth, keeping their head down, and expecting the hiring tides to naturally turn could find themselves out of business in a few years, unable to bring aboard the top talent they need to power an efficient operation. That means that today is the right time to take action. The factors driving these shifting dynamics are as much social as they are economic, and employers should expect they won’t go away any time soon.

“You have a scarcer resource than you knew before,” Burke says. “So, start finding out how you keep your scarce resource from leaking out of your system, instead of firing them or having them quit.” (Side note: Another way to prepare for prolonged talent scarcity? Invest in your technology.)

Of course, it is one thing for folks at the top of a manufacturing organization to grasp these concepts. Far too often I see that understanding fail to trickle down to the operations and line managers that make day-in and day-out decisions. That’s why I say this: True cultural change that puts employee needs at the heart must penetrate through every level of a company. Until manufacturers heed this urgent call towards an employee-centered approach, they will keep losing out to the employers that have.