Additionally, the pandemic has fast tracked the spread of the gig economy with rising dependency on internet based working. Today gigs are not limited to driving for Uber or helping a local restaurant do a little door to door marketing.

Let’s under the basics. What is a gig economy?

Essentially a gig economy is a shift in the hiring strategy of several industry verticals where organizations hire independent firms, consultants and freelancers to assist with specialized business functions, generally on a requirement basis.

Why is the gigs culture so popular?

Well, gigs are essentially contractual or part time assignments that tend to be a whole lot flexible than full time jobs. A 2015 survey report showed that 53 million Americans were working as freelancers that year. This report predicted the number to rise by 40% in 2020. Obviously this projection would have been much higher because of the COVID-19 pandemic. While these are just statistics for the United States, a 2019 report by Hayes reported that 24% of workers across 19 countries were full-time gig workers. Gigs are also popular because they can make you money. According to a study conducted by ADP Research Institute, the gig economy accounts for one-third of the world’s work force. The gig economy is also expected to cross a $500 billion mark in gross volume in the next five years.

Today, gig workers are sprouting up anywhere. Although gigs have their fundamentals set in being creative and knowledge intensive assignments, they are dramatically spreading to other industry verticals including customer service management, remote sales, and software development. From part time retailers and graphic designers to registered nurses and software developers, gigs have become a reality. But what’s more interesting is that gigs are now a part of verticals that don’t usually hire part timers. We are talking about verticals like manufacturing.

Although gig culture amalgamating with manufacturing is an unlikely combination, it actually works in favour of both the employer and the employee. The rising cost of providing health care to full time employees, increased over head costs, the integration of artificial intelligence and machine learning are some of the factors that are contributing to even manufacturing industries employing part time and contractual employees. Manufacturers have started to leverage gig economy fundamentals and are actively recruiting temps instead of full time employees. The fact that most of current workforce belongs to the millennial generation and tends to pursue a healthier work life balance while juggling their finances is another factor why workers don’t mind taking up jobs in manufacturing.

Let’s understand why manufacturers are opting for recruitment flexibility. Here are the benefits of hiring part time and contractual workers.

An innovative step towards overcoming the manufacturing skill gap

According to research from Deloitte and The Manufacturing Institute, more than 3.5 million new manufacturing jobs will be created by 2025, but about 2 million of those jobs will go unfilled because manufacturing companies will be unable to hire workers with the right skills.

Innovative solutions such as 3-D printing, robotics, machine learning and artificial intelligence are changing the manufacturing landscape. As such manufacturers might not have to depend upon skilled labour to help with the unskilled part of the production process. With machines taking up a large portion of the manufacturing process, it looks like hiring temps for jobs that don’t require much skill might work for manufacturers after all.

That being said, it looks like the gig economy might prove to be an interesting solution for manufacturers looking to overcome the looming skill gap. About 48% of people in the gig economy have college or advanced degrees. About 15% of them have skills in engineering and another 19% in IT. This workforce can easily help address the skill gap issue faced by manufacturers.

Reduced overhead costs

Costs like group insurance, health benefits, dental, vision and even a pension plan are a regulatory requirement for any organization exceeding a specific quota of full time employees. These expenses can cut into a large amount of an organization’s profits. Manufacturers generally require a large number of people on their workforce to meet customer and market demands. This means manufacturers will be required to adhere to all employee benefits that will eat into their earned capital. By hiring contractual or part time workers that will work from project to project for a specific contractual period, manufacturers have found a loophole and can save on additional costs. This is a win win situation for both parties as manufacturers are successfully bringing down overhead costs and temporary employees are free to work elsewhere and continue making money from more than one source.

More flexibility, better efficiency

It is a common misconception that people who are actively working temporary positions are looking to get hired full time. According to a 2021 Statista report, around 68 million Americans prefer to work as free agents. This gives them flexibility to manage their hours while being able to demand a reasonable fee for their time and effort. Because the jobs are not permanent, free agents are likely to be more efficient and tend to work as per their service level agreements. This in turn provides an increased level of efficiency as workers will be focussed on the amount of time they need to complete on an assignment.

Better employee engagement

For a manufacturer habituated with the traditional recruitment culture including excessive dependency on a paper trail, monitoring dedicated employee hours etc, a gig culture cam take some getting used to. However, once a manufacturer takes the leap, they will find that it is easier to engage with contractual employees and focus on improving their efficiency instead of dedicating time to resolving everyday employee issues and concerns. By hiring temps, a manufacturer is essentially eliminating a good deal of everyday employment issues and can turn their efforts to better employee engagement. From talent acquisition to skills assessment, manufacturers can easily integrate temps into their work process and achieve a reasonable degree of connect with contractual employees.

Key takeaways

While the spread of the gig economy in manufacturing might prove to be a major stress reliever for manufacturing recruiters, it is important for manufacturers to keep in mind that they must actively initiate programs like cross training, offer on the job training, allow flexible work schedules and offer a nurturing environment that encourages work life balance. This will not only boost the image of manufacturers as organizations but also attract more gig workers looking to work for a positive experience.

References

• https://www.adp.com/-/media/adp/ResourceHub/pdf/ADPRI/ADPRI0102_2018_Engagement_Study_Technical_Report_RELEASE%20READY.ashx
• https://www.qad.com/documents/3488095//3499672//manufacturing-skills-gap-and-gig-economy.pdf
• https://financesonline.com/gig-economy-statistics/

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During the Great Recession, when jobs were scarce and manufacturers said they needed to cut costs to survive, workers had very little leverage. But times have changed and the last year has been a tale of worker empowerment.

Employees have figured out they’re less constrained than they thought they were in terms of where they deploy their skill sets and won’t hesitate to leave a less fulfilling job for greener pastures.

And now an industry that has quietly looked for ways to reduce labor costs in the past is now facing the challenge of not only attracting new talent but retaining their current workforce.

The new workforce

Technology advancements have helped streamline procedures, increase productivity and create a safer, more efficient workplace but have made some jobs redundant and others more complex.

Roles that were once easier to fill with rank-and-file factory workers now increasingly require digital expertise in combination with operational and procedural knowledge.

Workers who are charged with the operation and maintenance of these machines require proper training, which adds to their list of skills making them much more valuable to employers.

Luckily, the majority demographic of manufacturing workers grew up during the technological boom of the past few decades and tend to be quite adaptive to new technology.

The same majority seems to be the bulk of those driving the Great Resignation which presents a problem for hiring managers and recruiters searching for talent in this sector.

Because these roles are highly transferable, workers can take their skills to practically any company within the manufacturing sector, regardless of niche.

That’s why it’s important for companies to determine the underlying causes of turnover within their organization and the methods they use to attract new talent.

Trickle Down Culture

Anyone who’s worked in a corporate structure has probably heard of trickle-down economics: the theory that benefits for corporations and the wealthy will trickle down to everyone else.

They will also have heard other (more risqué) expressions about what else tends to roll downhill in a company.

The general takeaway is: Whatever your company culture is at the top will have effects on every other aspect of the business. That’s why some organizations rethink how they structure their hill and what to send down.

Greif, a global leader in industrial packaging manufacturing, is taking a more holistic approach to hiring and talent retention by empowering managers to make more decisions. After all, it’s the manager relationship that can retain and motivate an employee, or cause them to resign.

Greif invests in their managers by offering training in topics like diversity, neurodiverse inclusion, and unconscious bias. They also established input and feedback structures and processes designed to make all voices heard and amplify good ideas no matter where in the organization they originate.

So far, the results have been phenomenal. Hiring has increased, employee retention is up, and they now rank in the top 10 global manufacturers for employee engagement thanks to this change in company culture.

Invest to attract the best

Another timeless adage in the world of business is “you have to spend money to make money”.

Though often taken out of context by CEOs who spend money on designer office furniture and high-status credit cards, a more apt expression may be to “invest your money in places that will actually help your business grow.”

It may not roll off the tongue like its predecessor but it reminds employers that manufacturing is a growth industry and it’s important to focus your spending where it counts.

There are three key areas of investment to attract this next generation of talent:

workforce, workplace, and work experience.

Workforce

The primary cause of the high turnover rate in manufacturing is understaffing.

The misguided thought process of “more hands make less work” has led employers to drastically cut their workforce, the idea being that too many employees on hand will result in idle workers with not enough work to go around.

The reality is employers are shooting themselves in the figurative foot by leaving their remaining workers with twice the work at the same pay rate.

In order to grow in this industry, employers must realize that more hands actually produce more work.

Redundant workers protect employers from disturbances in production such as staff illnesses, vacations, sudden resignations, and other unseen circumstances.

Additionally, a full staff and flexible work schedules give employers more opportunities to train and promote from within while allowing employees the support and respite they need to avoid burnout.

Workplace

Environment plays a huge part in employee morale and overall productivity. And a little investment in this area will have huge returns.

Up-to-date equipment and software optimize your business and let your employees know you care about their work experience.

Even seemingly small physical changes to a manufacturing workplace—an updated entrance, modernized break areas, or improvements in shower and locker room facilities—can go a long way toward enhancing the employee experience.

Beyond making the workplace more comfortable it is imperative for businesses to focus on employee safety.

In the last year, social media has been flooded with videos poking fun at the various safety violations reported by workers and though initially intended to be humorous, the response from the emerging workforce has been one of indignation.

Employees will no longer tolerate cost-cutting at the expense of their safety.

Work Experience

Proper staffing and updated facilities contribute immensely to an employee’s overall experience in the workplace but what truly makes the greatest difference is the sense of respect a worker receives from their employer.

Today’s workforce isn’t satisfied feeling like a cog in a machine and employers are making big and small policy changes to ensure their staff feels like respected members of their team.

It could be something as simple as eliminating unpaid lunch breaks.

If you pay for the fuel and upkeep of your car in order for it to function properly why wouldn’t you do the same, if not more, for a human being that helps your business function?

Larger changes like establishing affinity groups within your organization, adjustments for neurodiverse employees, support for childcare, and a well-designed onboarding experience can all help build your reputation as a preferred employer.

How Leoforce can help attract the new workforce in Manufacturing

It is time for manufacturers to embrace the new workforce and understand what it takes to attract them.

With the help of Leoforce, you can find the right recipe to become an employer of choice in each community where your company has operations.

This will not only ensure that you have access to the best talent but also that you are able to build a strong reputation within your industry.

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