One of the most pressing challenges manufacturing companies face right now is finding the skilled workers they need to succeed in a changing industry. The sector is facing severe skills shortages that businesses can only overcome with the right HR strategies.
Manufacturing is being transformed by technologies like artificial intelligence, advanced robotics, automation and the Internet of Things, but acquiring the talent you need to take full advantage of these innovations isn't easy. A 2018 study by Deloitte showed job openings in manufacturing had been growing at double-digit rates since mid-2017, approaching the historical peak recorded in 2001.
In the first quarter of 2019, more than 25% of manufacturers in the US had to turn down new business opportunities due to a lack of skilled workers, according to research by the National Association of Manufacturers.
While it's true that the impact of the COVID-19 pandemic has increased the number of people looking for work, finding qualified candidates with the specialist skills you need will still not be easy.
An experienced HR services provider can help you overcome this challenge, especially if you're planning to increase your use of flexible talent, but first you need to decide whether you want to outsource recruitment or do the job yourself.
You should give close consideration to all the factors involved in this decision, which means acknowledging the pros and cons of outsourcing the recruitment of your manufacturing workers.
Pros
1. Rapid response to seasonal trends and fluctuations
The manufacturing industry is heavily affected by seasonal trends, as well as unforeseen circumstances that can have a big impact on customer confidence and demand, such as the health crisis businesses are experiencing in 2020.
It's vital, therefore, to have a strategy for how you will respond to sudden fluctuations in the marketplace, especially if not having the right workforce capacity will lead to lost revenue opportunities.
Dedicated recruitment firms that specialize in sourcing flexible talent for the manufacturing industry will be able to make the right hires much more quickly and with greater reliability than if you were to take on the job yourself.
Research by the Economist Intelligence Unit, sponsored by North Highland, showed that agility and meeting project-specific needs were two of the most common reasons for organizations to use contingent workers, along with cost savings.
Given the importance of speed and responsiveness in manufacturing, these qualities could prove vital to the success of any business in the industry.
2. Legal compliance
From a legal perspective, there are some significant differences between hiring contingent staff and taking on permanent employees. If you're managing the process internally, to avoid any compliance issues you'll need to be aware of your legal obligations when taking on contingent workers. This could be a significant task if you're more accustomed to making permanent hires.
It's also worth remembering that rules and regulations vary around the world. Labor laws for businesses operating in the EU are very different to those in the US, for example. If you're a multinational business and you choose to take charge of recruitment yourself, you need to be up to date with the latest legislation in all the countries where you operate.
Furthermore, it's vital to be familiar with regulations that relate specifically to the manufacturing sector.
Outsourcing the recruitment and management of your contingent workers to an experienced HR partner that has all the relevant legal knowledge will take a lot of this hard work off your hands. It will also give you peace of mind that you're always in compliance with the law.
3. Reducing the administrative burden
There is a lot of administration and paperwork involved in making a new hire, whether you're recruiting people on a permanent or a temporary basis.
If you want to offload some of this work so you can concentrate on your core business, outsourcing recruitment to a dedicated supplier is the best way to do it.
Established HR services firms like Randstad have the experience and expertise to take the admin responsibilities of hiring off your hands, without any drop-off in standards or results.
Cons
1. Cost
Cost will always be a primary concern for any organization thinking about outsourcing a key task to an outside agency, whether it's recruitment, training, marketing, accounting or any other vital business function.
The impact of COVID-19 on manufacturing means cost management and financial efficiency need to be top priorities for businesses in this industry right now.
It's certainly true that working with a third party is a financial commitment that you'll need to account for. However, while your first assumption might be that outsourcing your contingent hiring will increase your costs, there's a good chance you will save money in the long run by recruiting the right people and only paying for the talent you need.
An HR specialist can help you accurately predict and plan your workforce capacity to cut down on overtime expenses, for example. You can also limit the financial risks associated with issues like high staff turnover and bad hires.
2.Doubts over loyalty and engagement
Hiring contingent workers can offer advantages for manufacturing firms, like flexibility and avoiding the cost and time commitment of recruiting permanent staff, but it can also raise questions related to loyalty and engagement.
Will people feel dedicated to your organization and invested in its success if they know they will only be with you for a limited time? These concerns could be heightened if you're outsourcing your hiring and don't feel directly involved in the process of selecting and engaging with candidates.
Fortunately, there are steps you can take to minimize this risk, such as coming up with a clear strategy for engaging contingent workers and being sure to avoid common onboarding mistakes.
Working with an experienced HR partner can also help you ensure you're taking on people with a positive work ethic and a strong sense of commitment and responsibility, regardless of the length of their contract.
If you're still unsure about what route to go down, it's worth asking yourself some questions to decide between insourcing or outsourcing the recruitment and management of your contingent workforce.