According to RecruiterBox, the average cost-per-hire in the manufacturing industry is $5,159. Recruiting and hiring top talent can be a strenuous process for any manufacturing company. There are a number of different variables associated with the cost of hiring including the medium you are using to recruit as well as the position you are trying to fill. The most common methods of recruiting are:
- Job fairs - $1,000-$4,000 (limited reach).
- Job boards - $250 per month per job (best value).
- Television and radio ads - $5,000 - $40,000 (most expensive).
- Staffing agencies - 20 percent of an employee’s first year salary (2nd most expensive).
- Billboards - $1,200 - $3,000 (least targetive).
- Print ads - $500 - $20,000 (limited reach).
- Social media - free (most cost efficient).
Unfortunately there is no magic formula of the above recruitment tactics to consistently attract qualified candidates. It is a constant process of trial and error, but the good news is that the more you try, the more you learn from your errors. It also might please you to hear that the manufacturing industry boasts higher retention rates than other industries with employees staying at the same company for an average of about five years. This is why the vetting process is important. The average cost of training per new hire costs $3,000, so you really want to find people who are going to stick around for the long haul.
In this deep dive into hiring and retention we’re going to explore the hurdles manufactures face when hiring, tips on how to attract and retain top talent, as well as ways to eliminate turnover (which may be the reason you’re hiring in the first place). Seeing as how we’re a technology company, we’re going to highlight how using tech can make your retention and recruiting efforts more efficient - both from a cost and execution perspective. This is becoming increasingly important as manufacturers are now competing with other industries for younger talent.
Hiring Best Practices
Before we get into the tips on attracting and hiring the best talent, let’s take a look at some of the challenges manufacturing companies are facing in this day and age as well as some data from Deloitte.
- As of this writing, there are 12.2 million manufacturing jobs in the United States.
- Average rate of pay is $28.74 per hour.
- Manufacturing is the sixth largest employment sector in the U.S.
- 38 percent of manufacturing executives say that attracting new workers is their top priority.
APPLICANT POOL IS ALMOST CUT IN HALF
What we mean by this is that employees in the manufacturing industry are predominantly male. So right off the bat your applicant pool is shrunk compared to other industries. Additionally, younger generations are less inclined to apply to manufacturing companies the way they once did. By 2030, it’s estimated that 2.1 million manufacturing jobs will go unfilled as the majority of manufacturing employees are aged 45-54 with younger people increasingly applying to jobs elsewhere.
THE RISE OF AUTOMATION AND ROBITIZATION
Roles requiring advanced skills such as automation, instrumentation, and robotics are on the rise, increasing 45% YOY since 2015. This means that the skill level required to enter the manufacturing industry is more difficult to achieve. Additionally, Oxford Economics predicts that 20 million manufacturing jobs around the world could be done by robots by the year 2030. Going into a job knowing that you could be replaced by a faster, cheaper robot is not a very good way to entice someone on a career path.
So yes, there are some obstacles that manufacturing companies are facing, and will continue to face in the future. But all this really means is that you have to be open, and adaptable to change.
Here are eight ways to attract and hire the very best talent for your manufacturing company.
1. Create a compelling job description
This is something that manufacturing companies often overlook. They figure that the job is simple, so the description should match up with the job. While we agree that there is only so much you can add to a manufacturing job description, it is important that your job descriptions stick out, and pop as you are without a doubt in competition with other possible avenues of employment that your potential hire could take.
In addition to the actual description of the job itself, you can go into detail about your company’s culture, history, and values. What will this position mean to the company? Will there be opportunities for advancement? What (if any) are the benefits? What’s it like to work at your manufacturing company? Have you had any impressive accomplishments, awards, or statistics to highlight? Going beyond the description itself, and highlighting the benefits of working for your company will not only separate you from the competition, it will also attract more qualified and talented candidates who’ve got the skills and experience you’re looking for.
A good place to find examples of more robust job descriptions is the technology industry, which is known for its innovation and favorable cultures and working environments. Here is a good place to start. You will see the amount of thought that goes into each description. We know that you might not be able to offer what these companies do as far as benefits and culture go, but at least it’s a step in the right direction and will surely give you a competitive advantage in both the quality and quantity of applications you receive.
2. Utilize technology
Up to this point we’ve discussed employee recognition and skills management software, there is also a slew of available hiring software, which could save you time and money depending on how many positions you are trying to fill.
Here is a screenshot from Workable, one of the most popular recruiting applications. As you can see below, they offer and implement things you might not have ever thought of before and take care of things that you otherwise would have had to spend a considerable amount of time on.
Manufacturing companies are notoriously laggards when it comes to implementing technology like this, and the reason is because a lot of them are afraid of change. “If it’s not broke, don’t fix it,” or “we’re in manufacturing, and this doesn’t apply to us” are common thought patterns associated with the hiring process in the manufacturing industry. Given the cost of both turnover and hiring as outlined above, you really can’t afford not to go after the best of the best who will stay at your company for several years. An investment in software like this will help you make the best hiring decisions and ultimately save your manufacturing company both time and money. There is a reason so many companies use technology like this; because it works. And if it works for other companies and industries, there is no reason it can’t work for yours.
3. Encourage referrals by offering incentives
In the turnover section of the guide, above we talked about the value that comes when you have employees that are happy to work for you. When you have employees like this you can straight up tell them about positions they are hiring for and they may very well know some qualified candidates. If done successfully, this will, again, save you time and money. Not only will you be able to find candidates you don’t have to pay to obtain through traditional mediums, but you’ve also got someone vouching for their skills and qualifications which is priceless.
The incentive you give to your current employees doesn’t always have to be cash. Things like extra vacation time, gifts, or anything you think aligns with your culture are always greatly appreciated. Remember that the better your incentive, the better your chances are of getting high quality referrals. The incentive you pay out is almost always less than what you’d traditionally pay to go about finding and interviewing candidates on your own. For example, as we mentioned above, the average cost of hiring a candidate found by an agency is around 20 percent of their first year’s salary.
You can really pump this up by baking it into your company’s culture as soon as an employee is hired. Constantly bringing it up in company emails, meetings, or events, so it is always on your employee’s minds. Having this discipline to do this consistently will help ensure that you’ve got an endless stream of qualified candidates applying to your manufacturing company. Even if you’re not currently hiring, this is a great way to get candidates into your database so you can reach out when the time comes that you do need to hire. The easiest and cheapest way to recruit is when you don’t have to do it.
4. Working digital job boards
While you’re the one reviewing job candidates to decide if they are a good fit for your company, potential candidates are reviewing you as well via your rating on different job posting websites available online. It is extremely important for you to be cognizant of these ratings and address any negative feedback you may have gotten, both from a recruitment standpoint, as well as the temperament of the current employees that work for you. Put simply, the higher your score or rating is on a job board, the more qualified job applications you will receive. If you have a low rating, candidates will most certainly seek employment elsewhere in their search for new employment. Since ratings and scores are anonymous, the only thing you can do if you receive a poor rating is to correct the issue internally. The ratings here aren’t like on Google where you can respond to negative feedback.
If you’re actively using job boards as recruiting tools, you could always reach out to your current employees and ask them to leave a review of their own if you feel as though you would get positive feedback.
A little more on job boards
Job boards have increasingly become a popular way for both job seekers and manufacturing companies to find each other. Remember that on these platforms, you don’t have to wait for a candidate to come to you, you can search for and seek out candidates who you would like to interview. Many people who already have jobs leave their resumes on job boards leaving the door open to a greener pastures should an opportunity arise. It usually doesn’t take more than a month to find a suitable number of candidates you’d like to interview, and thus makes job boards one of the most cost efficient recruiting methods - averaging out at $250 per job posting per month. If you’re truly looking to speed up your hiring process or need to hire for multiple positions fast, all job boards offer advertising solutions which will place your job posting(s) at the top of the list when job seekers are conducting a search.
In addition to manufacturing jobs, job boards are also a great place to find executive or administrative talent which you will need more of as your manufacturing company continues to grow. Here is a link to a list of the most popular job boards. Remember #1 when creating your job posting and write a compelling post and know that the more thought you put into your description, the more thought a candidate will put into his or her application.
5. Make sure your website and careers page is in tip top shape
If you’re seeking out the very best, then your website and careers page are certainly important to maintain, especially if you’re spending money on, say, a billboard in order to make candidates aware of your open positions. Once a candidate is made aware that you are hiring, the first thing they’ll do is head to your website and navigate to your careers page. Your careers page should be on par with the job descriptions themselves, highlighting what it’s like to work at your amazing manufacturing company. Here is an example of one of our client's, Mayville Engineering Company’s career page. You can see that they’ve got all the bases covered, complete with multiple videos going into detail about why Mayville is a great place to work. By having a superior manufacturing website and careers page that best the competition, you will in turn, attract the best talent. And by competition, we don’t just mean other manufacturing companies, we mean other industries like construction and transport.
Starting with the end in mind is important. You should operate your careers page (and website) knowing that a potentially lifelong employee could arrive at any time. If you feel as though your website or careers page could use a boost, we can definitely work with you to develop a finished product that you can be proud of.
6. Using a staffing agency
There is a reason why staffing agencies are so expensive and it is because they usually work and you only pay when an agency delivers. If you have the budget to bring one on for a hire or two, by all means go ahead and do so. Aside from the job description (which they will work with you on), you are basically outsourcing #1-5 of this section of the article. While this may seem like an entire burden lifted off your HR team’s shoulders, the 20 percent of a first year salary, which is the average fee a staffing agency charges in the manufacturing industry, can be an entirely new burden all on its own. That means five hires cost you about one employee’s annual salary and is why companies who hire more frequently opt to do it themselves.
Now there are certain circumstances where it makes more sense to hire a staffing agency,, and that might be for executive roles or short term, temporary positions. If a staffing agency approaches you (which they are known to do), it is a good idea to ask for references from previous employers they’ve worked with. Also, don’t be afraid to negotiate their fee. Think of the first quote as a jumping off point to negotiate. 20 percent is the average, some ask for more, some ask for less.
7. Using social media
Based on our research, this is the most cost effective way for manufacturing companies to recruit. Additionally, it is a great way to reach younger candidates who, as we discussed earlier, are getting more difficult to attract. Assuming your company has at least one or multiple social media pages, the first place to start is to post your job opening on your company’s page with a link to the posting on your site. On Facebook, there are different groups that you can post your job in as well which are specific to your area. If your posting on Twitter or Instagram you can use the hashtags #hiring #jobs, or #careers in your post. That means that your posting will show up whenever someone searches for the hashtagged word on either of these three platforms. LinkedIn is another avenue you can take, and their steps for posting a job are quite easy to follow. If you want quicker results, you can advertise your posting on any of these platforms.
Because this is the manufacturing industry, using social media as a means to recruit often gets overlooked. Our advice: this is a great place to start because it’s 100 percent free. You should try posting an open position and then proceed accordingly based on the quality and the quantity of applications you are receiving from the post.
Here is another example from Mayville Engineering Company where they are killing two birds with one stone by posting about a job fair they plan on attending. Notice all the hashtags they are using.
We understand that using social media can seem daunting. If you don’t have a social media presence or feel as though you could be getting more from your current social accounts, we offer social media management as one of our services here at Foremost. We’ve increased the follow count and interaction for many of our clients, and would love to replicate similar results for your manufacturing company.
8. All other forms of outreach
We know that throughout this article we have focused on digital strategies to improve your retention and recruitment efforts. It’s what we do and what we know. You may feel that traditional mediums like billboards, commercials, or print are more within your wheelhouse or align better with your company’s brand if you’re not that active online. You may have had success with one of these mediums in the past and have a great relationship with your local TV or radio station. The only problem with this traditional advertising approach is that you’re paying for views that don’t resonate with your message. Take a billboard for example, what percent of the people driving by it are actively looking for a manufacturing job? In our experience, a $5,000 ad spend can go a lot further digitally than it can on something like print. When you recruit digitally, it is also a lot easier to measure who is coming to your site and where they are coming from. By having access to metrics like these it enables you to double down on what’s working and cut out what isn’t.
For instance, let’s say you’re posting on job boards and social media and find that far more candidates are coming to your site from social than they are from the job board. If that is the case, you’ll probably want to focus your efforts on social or even look into advertising there. Additionally, a digital recruitment strategy will attract a younger, more diverse pool of applicants.
That said, we don’t want to deter you from what has worked in the past, but would like to at least encourage you to try something new to see if it can increase the speed, efficiency, and quality of your hiring process.
How To Eliminate Turnover
The best way to eliminate hiring costs is when you don’t need to do it. This is why retention is so important. The longer an employee stays with your company, the more valuable they become through their years of repetition, practice, and understanding of why your manufacturing company operates the way it does. That said, a study by Tooling U-SME found that 43 percent of manufacturing companies face an annual turnover of 20 percent or higher.
Before we get into how to cut down turnover, let’s look at some of the reasons why manufacturing employees leave. Once you understand the reasons why people are leaving, you will have a better idea of how to get them to stay.
Employees usually leave for two reasons: they’re either dissatisfied with their job or the environment they’re in, or they feel as though there are more attractive job opportunities elsewhere. The way to combat this is to make sure that you’re providing a healthy work environment that incentivizes employees to stay. Keep an eye on things like micromanagement, hostile employees, and keeping the general mindset of your staff positive and upbeat. Put yourself in your employee’s shoes and ask “is this somewhere I’d enjoy spending 40 hours a week for the next 10 years of my life?”
Here are four of the best ways to eliminate turnover at your manufacturing company.
1. Provide a safe work environment
Safety should be the number one priority at your facility. If employees feel as though what they’re doing is not safe, they will undoubtedly leave for somewhere they’re more comfortable with. You can provide a safe work environment by automating safety procedures, making it easy to report problems, and responding quickly. Automating safety procedures means keeping your software up to date and consistently training your employees on best practices. When problems or accidents do arise, you should encourage your employees to report them and then take immediate action to make sure the issues don’t persist. By acting quickly, your employees will feel as though they’re working somewhere where people care about the safety and efficiency of their day to day duties, and in doing so, encourages employees to stick around.
2. Using employee recognition apps
Employee recognition is a great way to build a healthy culture and sense of camaraderie throughout your company. Recognition should not be limited to management; employees should be able to recognize hard work from one another as they’re the ones in the trenches - day in and day out. Having modern recognition software in the form of an app on a cell phone where employees can check in throughout the day can make all the difference in the world. Human beings like being recognized for the hard work they’ve done. And when people see their peers getting recognized and rewarded for a job well done, it encourages them to replicate the efforts in order to receive the same praise. Put simply, behavior that gets rewarded gets repeated. Furthermore, instituting an employee recognition program allows managers to see who the top performing employees are - something that varies in difficulty depending on the type of manufacturing you are doing.
Naturally, you’re going to want to promote your top performing employees, or coincidentally, get rid of the ones who aren’t meeting the standards of your company. This will create an influx of high quality, and quantity of work that gets done - all from an employee recognition system with a minimal time requirement of management.
If you don’t have an employee recognition system at the moment, or are looking to upgrade your current system, simply do a search for “employee recognition software” and you should be able to find something that aligns with your manufacturing company’s goals and mission.
3. Create an environment that fosters relationships
There is an old sang that goes “you spend more time with your coworkers than you do with your family.” This is especially true in manufacturing where you have the same people showing up to the same building for years on end. By building positive relationships with each other it fosters a culture where people want to show up to work everyday and encourages them to stay for (hopefully) the rest of their career. Coworkers should become friends, and when this happens, it makes it twice as hard for an employee to pick up and leave, and start all over again. You can be conducive to relationship building by offering things like company picnics, softball teams, team bonding exercises, celebrating birthdays, and a variety of other scenarios where your team will bond with one another. This is also a good opportunity to set up mentor-mentee relationships with newer and more senior employees, If a newer particular employee has certain interests, aptitudes, or goals, something like a company softball team would be a great way for them to build a relationship with someone who is where that person would like to eventually be.
It is also worth noting the simple word of mouth marketing your manufacturing company will receive when you have a stable of happy employees. Think about your own past experience: if you hear that one of your friend’s loves working at a certain company it makes you interested in it; maybe even enough so to fill out an application yourself. Believe it or not, there are manufacturing companies who receive a steady amount of applications on a consistent basis without paying for any marketing based solely on the reputation of their company and its employee’s praises.
4. Using skills management software to rate employees
This is a sign of a healthy company, no matter what the industry. When you are able to create an environment that encourages your employees to grow professionally and have a learning mentality it will undoubtedly help with your manufacturing company’s bottom line. First, because both the quality and quantity of work will increase - the prospect of a promotion is more than enough to get your employees to consistently perform at high levels. Second, you won’t have to worry about going through the lengthy, time consuming, costly process of attracting talent from outside of your manufacturing company.
There are a few ways to perfect this process. After all, you don’t want to promote someone simply because they already work at your manufacturing company. You want the best person for the job, no matter where they come from. In addition to your employee recognition software, you might also want to think about skills management software which can help you gauge where your employees strengths and weaknesses are. Additionally, you’ll want to have management check in with your employees to hear about their long term goals and aspirations as it relates to future openings within your company, or even the prospect of creating an entirely new position if you feel as though it plays to an employee’s strengths. When you check in with your employees, it shows that you care about their well being, and longevity within the company.
Finally, offer opportunities for professional development. Maybe that is to learn a new skill that would be an asset to your manufacturing company, or obtain a certain certification. It is important to keep an eye out for these opportunities as they are undoubtedly cheaper than the hiring process.
The hiring process is a costly endeavor, but as we learned above, is not something that well recognized companies have to worry about. When you’ve got a positive atmosphere and staunch reputation, the hiring process at your manufacturing company will take care of itself. More applications and less openings is a good problem to have, and something that you can accomplish with a high retention rate.
No matter what way you look at it, hiring is expensive because of the amount of time it takes to recruit and interview qualified candidates. This is why retention is so important. The longer employees stay at your company, the less you will have to worry about hiring. When you do have to hire, it is our hope that you can utilize the available resources to make your experience as easy as possible. We discussed how the landscape in the manufacturing industry is changing and employees now have to be more skilled to operate machinery utilizing newer technologies. In the same way, the recruitment process has changed as well, and you should be able to mirror that change in your recruitment efforts by adopting a digital focus.
We’ve helped hundreds of manufacturing companies just like yours improve their bottom line through up to date digital marketing and design strategies, which are constantly evolving. There is no greater thrill for us than when we hear from one of our clients that their bottom line has increased due to our efforts, and it happens quite a bit. Our hope is that you were able to glean a few things from this guide that you can put into action at your own manufacturing company.
If you feel as though your digital efforts could use a boost, feel free to contact us. We understand that navigating the digital landscape in the manufacturing industry can be a tricky process and that no two companies are alike. The reality is that you may be leaving money on the table or losing out to your competition if your website and marketing are not on the cutting edge, and this is especially true when it comes to hiring.