Workforce shortages prompt growth of gig economy in manufacturing
According to a recent study, an estimated 2 million manufacturing jobs will be unfilled by 2025, resulting in lost productivity and earnings. There’s a shortage of qualified job applicants in the space, especially for jobs that require more technical skills.
The DNA of today’s manufacturing workforce is rapidly changing, and the packaging industry must adapt quickly to meet today’s demands and tomorrow’s growth opportunities. Baby Boomers are retiring, and there’s a lack of interest amongst the younger generation in pursuing manufacturing careers. These are two of the biggest factors contributing to the prediction that nearly 3.5 million manufacturing jobs likely need to be filled over the next decade. The skills gap is anticipated to result in 2 million of those jobs going unfilled.
The skills gap in manufacturing refers to a talent pool that is not able to demonstrate the required skill level for locating information. This skill involves the ability to locate, synthesize and use information from workplace graphics such as charts, graphs, tables, forms, flowcharts, diagrams, floor plans, maps and instrument gauges.
As a result, manufacturers in the packaging industry need a better way to recruit and fill their skilled workforce jobs.
Gig economy meets manufacturing
Gig workers are a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. The rise of the gig economy is most often attributed to the high cost of providing healthcare and other benefits to full-time employees, constant fluctuation in the demands for products, increasing overhead costs, and automation and internet accessibility. Manufacturers are no stranger to these issues, making them a clear candidate for leveraging gig economy principles to effectively and efficiently fill workforce gaps.
There is a considerable advantage to manufacturers who are often in need of workers to fulfill tasks immediately. Benefits of the gig economy include access to:
- Skilled workers who are available immediately without a lengthy hiring search.
- Full-time employees who can continue to focus on their jobs, while temporary workers can assist with special projects or short-term demands.
- Highly skilled workers who are utilized temporarily, without adding a full-time salary to payroll costs.
By adopting the principles of the gig economy and hiring qualified workers on demand to meet immediate workforce needs, manufacturers can minimize their strain on existing employee resources and maximize productivity and earnings. The American workforce has already embraced the gig economy, with 53 million U.S. workers currently freelancing. By 2020, it’s estimated that 40% of the U.S. workforce will be independent contractors.
Gig economy best practices
Traditional talent pools and hiring methods no longer yield the right type of workers with the technology, math and problem-solving skills manufacturers need to operate modern-day plants. With the gig economy, a pre-screened database of millions of experienced workers makes it simpler for companies to find the exact type of worker they need, exactly when they are needed.
There are several best practices to follow when integrating these workers as part of a talent acquisition plan.
Use workforce data analytics to inform hiring decisions. By examining performance metrics of their existing workforce, manufacturers can learn which employee factors are making the most impact on productivity. This type of data-driven decision making helps target and hire freelance workers who possess those same traits and skills. Companies that provide and screen large talent pools of freelance workers for manufacturers can use predictive analytics to identify the candidates most likely to excel at the unique demands of each manufacturing plant. Reviewing key performance metrics can also determine the correct quantity of freelance workers needed to reach production goals.
Mobile connectivity can track employee performance and best engage freelance workers. To most effectively attract, retain and measure the performance of freelance workers, manufacturers should strongly consider using mobile technology. Workers in the gig economy are best engaged through mobile technology, and it offers an immediate way to communicate with them. Mobile apps can be designed to include a mobile training component that enables freelance employees to arrive on the first day of their job with a solid understanding of the scope of the tasks as well as important job safety knowledge. Mobile technology can also provide employers with real-time analytics, such as tenure, attendance and performance reviews.
Consider using the gig economy to “test drive” potential full-time workers. For full-time job vacancies that are challenging to fill, manufacturers can consider using the gig economy to “test drive” freelance workers who may be good fits for particular full-time jobs. By seeing their skills on the job, their work can be more accurately evaluated than during a traditional hiring process.
Manufacturers seeking an immediate answer to their skilled workforce shortage problem need to take a close look at shifting from searching for employees in traditional talent pools to exploring the talent available within the gig economy.
Pete Butler is the founder and CEO of Indianapolis-based MS Companies (mscompanies.com), which offers the only cloud-based solution that leverages the gig economy to provide a pre-trained, pre-screened, and rapidly scalable on-demand workforce. Through its proprietary suite of applications, MS Companies improves the work burdens, process visibility, efficiency, employee experience, data integration, and the final results that organizations deliver. Its client base is comprised of 600 industrial customers, including 20 Fortune 500 companies.