Manufacturing Sector update from Forde May Consulting

June 14, 2019

Manufacturing update from Forde May Consulting

With the latest economic data coming through, the manufacturing sector is going through a sustained period of growth in Northern Ireland and indeed over the past 12 months there has been a continued rise in output. Brexit is seen as the most likely reason for this boost with firms increasing output ahead of the original Brexit date. With the year-on-year growth of 2.7% (similar to the growth across the wider UK manufacturing sector) some firms have increased production to reduce the possibility of any disruption caused by a no-deal Brexit.

The Pharmaceutical & Chemical sectors output for example jumped by almost 11% compared to the same time in 2018. Organisations are invested in stockpiling inside the EU to ensure smooth running post the deadline of October 31st.

Whilst the manufacturing sector’s output is now at an all-time high, doubling over the past ten years, it is the lack of skilled talent matching the growth of the industry that is proving to be the biggest challenge.

Unfortunately, the industry does have a reputation for not being as digitally advanced as other sectors. In reality, however, the opposite is true, with smart manufacturing on the rise. With such advances, the need for skilled talent has become even more critical, especially digital natives – Generation Z and Millennials.

Therefore, the industry must focus on attracting younger talent, competing against the Technology and Digital sectors that are perceived to be better environments. As Brendan Catney, Principal Consultant at Forde May Consulting, said: “It will be these individuals who can adapt and respond to shifting technology and processes. Progress will be built on existing success from Millennials and Gen Z.”

This is particularly the case as automation and artificial intelligence becomes commonplace in factories. The question then becomes one of what industry can to position itself as an employer of choice and attract the talent it sorely needs?

The skills gap

The digital skills gap threatens many industries but could hit manufacturing extremely hard. In the U.S. there will be an expected skills shortage in the next decade, with an economic impact estimate of circa $2.5 trillion. Existing workers aren’t fully equipped to deal with emerging technology. So, the skills gap will hinder progress of smart factories and stop leaders from fully realising their strategic goals. Productivity is expected to fall, revenue could then be lost and there will be a significant opportunity cost.

Hiring the right talent to work in smart factories is imperative. Yet, the manufacturing sector is falling short. Only 2% of companies believe that they are doing enough to equip young people for a long-term career in the industry.

Multiple generations in one factory

An additional complication then arises too in the managing of a multi-generational workforce. As younger people join the sector, leaders will have to manage the differing needs of several generations. Currently, 15 per cent of employees are over 55 years old and 17% are under 24. In particular, manufacturers have expressed difficulties in retaining younger workers.

Challenging the manufacturing sectors image

We come back again to manufacturing’s image problem. Young professionals who have the skills to work in smart factories are likely to be attracted by the generous pay, perks and lifestyle afforded by technology companies. In the recruitment market, manufacturers in Northern Ireland are competing against the likes of Scientific and Technology firms for the same talent. But as Brendan Catney reminds us, employers can overcome the perception talent may have of the sector by showcasing the reality of what a career in manufacturing is really like.

“It’s often a case of ‘selling’ the bigger picture,” he said. “This is a sector that more often than not provides career opportunities on a global scale. It is one that is leading the charge for safer, cleaner environments that are sustainable. And it is contrary to perception, one of the most technically-advanced sectors of any economy.”

According to the latest Manufacturing report , the public still do not see engineering & manufacturing as the rewarding and essential profession countries like Germany do. Nor do they understand how jobs in manufacturing impact on jobs in other sectors. A typical aerospace facility will generate 4 jobs in the supply chain. These 5 highly paid jobs then in turn contribute to supporting another 2 typically in service, retail and hospitality sectors.  Staff retention rates have also been found to be one of the highest. As Brendan said, “there is a real need to educate and inform all in Northern Ireland about the sector, the sector just needs to get better at vocalising it. Manufacturing NI is really making strides at making sure the industry is at the top table when it comes to promoting and encouraging new talent into the sector.

Publicise innovations 

Communicating the many innovations that are happening in the sector is also a way to improve the solution. Younger people are ambitious and keen to advance their careers. Offering development opportunities is a leading factor in attracting and retaining Millennials, who value learning and development more than any other preceding generation.

Manufacturing must inform potential workers about the many opportunities to grow their skills and career in the sector. AI, the Internet of Things (IoT) and Blockchain technology are causing a sea-change across the industry – all cutting-edge developments that an ambitious young professional would love to experience. Investment in learning is also important, but manufacturing firms are 8% less likely to have a dedicated training budget than other sectors.

Adapting to young talent

Adapting to younger employees’ lifestyles will also help to attract and retain talent. They value flexibility for side projects, extracurricular learning or to spend time with family. As businesses benefit from the blurring of work and home lives, thanks to advances in technologies, younger workers expect organisations to redress the balance by supporting them in personal development.

Attracting young talent is critical to the long-term success of smart factories. Therefore, it must be at the top of every executive’s to-do list. To start, manufacturing firms need to consider their communication and how to bridge the gap between young people’s perception of the sector and the reality. Then, processes need to adapt to younger workers who have different priorities to other generations. It involves some legwork but will pay off in the end. The factories that invest in their young talent now will be industry-leaders well into the future.