May 26, 2020

Manufacturing 2020: How to make COVID-19-era workforce agility part of your organisation’s permanent DNA

Adam Aguzzi, Senior Principal, Industry Advisory at Ceridian, explains how perfecting workforce agility now can help your organisation adapt and thrive in uncertainty, forever.

The term “agile” has been a popular buzzword for years now. It’s been so overused and misunderstood that some have even declared it dead [i]. But, if we boil it down to its original intention, the term “agile” still means something in manufacturing. It’s about leveraging people’s innate flexibility to adapt processes and respond to change, two concepts that we’ve seen play out in manufacturing during the COVID-19 pandemic.

The pandemic has been one big exercise in agility for the manufacturing sector. It’s easy to think that we’ll eventually settle into a new, calmer reality – except that the manufacturing sector was already operating in a context of constant, rapid change prior to the pandemic, due to the effects of globalisation and widespread technology adoption under Industry 4.0. Which means we can either white-knuckle our way through the crisis, or we can use this as an opportunity to make agility part of the sector’s permanent DNA. Organisations that choose the latter will likely have a significant competitive edge, because constant change is the next normal.

Anatomy of an agile manufacturing workforce

 

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According to the article The Relationship Between Work Organisation and Workforce Agility in Small Manufacturing Enterprises, in the International Journal of Industrial Ergonomics, there are three pillars of workforce agility: proactivity, adaptability, and resilience [ii]. We’re seeing each of these pillars play out right now in real time. Take Alderman's Drinks in Manchester, which switched drink production to start producing bottles of hand sanitiser and made a million bottles within the first week [iii]. And that’s just one story of many UK companies that pivoted almost overnight to produce medical equipment, or to meet changing consumer demands for food and essential goods – a great example of adaptability and resilience.

In the new reality, the world will continue to change in ways we can’t always predict. Manufacturers will need to prepare the workforce for this prolonged uncertainty, removing the barriers that make it difficult for people to adapt and embrace change. It’s the difference between your workforce driving innovation because it’s who they are, versus being dragged along reluctantly as your competitors define the rules of engagement.

Three lessons on adaptability from the pandemic that we can apply to the broader Industry 4.0 journey

So, what can we learn from the COVID-19 pandemic that will matter later on? As it turns out, a lot. In this article, I’ll explore three key lessons in adaptability that, if you can learn from and solve right now, can help set your workforce and organisation up for long-term success.

 

 

1. How to maintain production and pivot quickly, even with fewer people

Unemployment is expected to be at around 8.5% by the end of 2021 [iv]. While it marks the end of the historically low joblessness rates that heightened the war for talent over the past few years, it doesn’t spell the end of the shortage of skilled talent manufacturers are facing. For one, the skills gaps predicted before the pandemic – 2.4 million unfilled jobs by 2028 according to Deloitte – will still be an issue [v], as certain technology skills sets remain scarce. At the same time, changes to the global supply chain are poised to create jobs at home, while the “silver tsunami” of retiring workers will reduce the workforce significantly and take away the most experienced workers.

This all compounds to create a situation where manufacturers will likely be operating with fewer people on the line than may be ideal, at least some of the time. While the pandemic is already serving as a dress rehearsal in leaner operations for some essential manufacturers [vi], all organisations should be thinking about how to cope with having fewer workers without sacrificing production levels or missing growth opportunities. Doing so requires a “resiliency plan” with the right blend of best practices in business continuity and operational efficiency. An automation strategy alone won’t get you there. Having a plan for your people is critical.

To start, succession planning is critical when facing unpredictability in staffing levels. Succession planning is often considered a leadership development strategy – and it is – but it can also support business continuity. A 2019 joint study by Ceridian and HR Research Institute found that only 20% of HR professionals feel they’re adequately prepared for any employee in a key position to leave [vii]. As manufacturers redesign jobs to provide more flexibility, a strong succession plan will include both leader and critical non-manager roles, and it will be integrated with other talent management programs – such as learning and development.

 

 

Knowledge management is another critical component to consider. With the impending mass exodus of baby boomers, there’s a significant risk of institutional knowledge and experience heading out the door with them. Organisations will need to digitise their knowledge management and transfer processes to ensure it’s captured for the next generation of the workforce to carry forward. Traditional approaches that just included safety videos and company policies will need to be expanded into upskilling for tomorrow’s needs. Empower workers to take control of their career path and get ready for their next position.

The final piece of the puzzle is building efficiency in systems, processes, and people management. Manufacturers need to examine current digital transformation projects and confirm that workforce management is prioritised. Providing operations managers with visibility to the actual (not standard) costs of every decision in real time will give them a powerful tool to control costs, reduce cost variability, and become both more efficient and predictable. This will never diminish in importance. Given most manufacturers’ second highest expense is labour, it could mean the difference between pivoting profitably or accelerating losses.  

2. How to understand and serve the needs of your workforce to gain their loyalty

Perhaps the strongest lesson organisations across all industries can take away from the pandemic is the importance of taking care of your people. During times of crisis, the workforce is judging organisations and leadership teams on how well they steer the ship through the storm. This is especially heightened when stories abound in the news and on social media of organisations going above and beyond to support workers, their families, and the community. This is a time when how you treat your people and the working environment you offer will be under a magnifying glass, and your chosen approach can influence retention – positively or negatively.

One key area of focus is your managers. This layer of the organisation plays a critical role in setting the tone and behaviour for lower-level employees, and they may find themselves second-guessing their career choices and desiring more stability. Losing managers hurts the culture in the long run, and also has a negative effect on productivity. Failing to support managers through calm leadership, transparent communication, and resources can cause them to lose faith in the company and leave – maybe not right now in the midst of the crisis, but later down the road. The right technology can help foster better business continuity, change management, and self-service, all of which help build managers’ confidence in the organisation.

And for the younger generations, working for an organisation that cares about its people – and the community – is essential and non-negotiable. Today’s manufacturers are competing with leading companies in every other industry for millennial and Generation Z talent, especially those with hard-to-recruit tech skills. In a concerted effort to plug the skills gap and to attract younger employees, UK manufacturers are upping their investment in their current workforces: 46% are increasing training budgets, 72% are introducing or continuing to run formal apprenticeships and 36% are introducing or continuing to run graduate programmes [viii]. The pandemic may well serve as an opportunity to change the overly negative mindset of the younger generation towards a career in manufacturing, as it provides an essential service to communities.

 

 

All this being said, major events like the COVID-19 pandemic have a way of changing people’s core values. To truly understand what their workforce needs now – and how that will evolve over the next year or so – organisations will need open, two-way communication. Employee surveys will be more important than ever in helping organisations pivot their approach to the employee experience, over and over again, to ensure they can retain the trust and loyalty of their best people.

3. How to rally your people around a purpose – and have them drive change

Going back to the three pillars of workforce agility mentioned at the start of this post, proactivity is the one that may require the biggest culture pivot for manufacturers. Many companies are still using a top-down approach to things like decision-making, problem-solving, and business strategy. This will need to be adjusted to inspire workers at all levels of the organisation and across departments to seek out better and more efficient ways of working.

For a workforce to become proactive, they first need to understand what the organisation is trying to achieve. Aligning work at all levels back to the company goals is very important, and communicating that vision and strategy clearly even more so. When people feel they’re working toward something they believe in, it can drastically improve performance.  A recent report from the World Economic Forum found that a “sense of purpose” in work is the second most important criteria for working millennials, after salary [i]. Given this generation will make up the majority of the workforce in coming years, we can predict that if they don’t support your company’s mission, you’ll risk losing them to another organisation.

 

 

Manufacturers should consider the role technology can play in communicating, tracking, and measuring progress against goals to keep everyone on the same page within the organisation. We’re facing a prolonged period of uncertainty, so change management and transparent communication will be paramount to pivoting quickly and having the workforce drive change.

Moving forward

The COVID-19 crisis has upended every aspect of the reality we knew, but with change comes opportunity. Manufacturers can build a vision that will inspire the workforce to be resilient, embrace change, and solve for the future at every level of the organisation. The key is putting the right strategy and technology in place today that will support the workforce in adapting to whatever challenges the future holds.

 

[i] The Future of Jobs Report 2018, World Economic Forum

[i] Kurt Cagle, The End of Agile, Forbes, August 2019

[ii] Bohdana Sherehiy, Waldemar Karwowski, The relationship between work organization and workforce agility in small manufacturing enterprises, International Journal of Industrial Ergonomics, May 2014

[iii] Every UK manufacturer helping to produce PPE and equipment for NHS workers, The Manufacturer.com, April 2020

[iv] The National Institute for Economic and Social Research, Marketwatch.com, 28 April 2020

[v] 2018 Skills Gap in Manufacturing Study, Deloitte, 2018

[vi] Skills shortages continue to hit growth as UK employers struggle to find the right talent, Cityam.com, Feb 2020

[vii] The State of Succession Management 2019, HR Research Institute and Ceridian, 2019

[viii] Reinventing the Manufacturing Workforce, Make UK, 2018

Adam Aguzzi

Adam Aguzzi is Senior Principal, Industry Advisory at Ceridian. Adam helps leaders transform their operations and strategies to make better decisions that drive business value. He has spent the last 15 years directing programs in manufacturing, aviation, maintenance, and mining. He holds a CPA and an MBA from the University of Toronto.

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