New Articles
  April 30th, 2015 | Written by

How U.S. Manufacturing Can Fuel Its Own Resurgence

[shareaholic app="share_buttons" id="13106399"]


  • Three-fourths of U.S. manufacturers have difficulty finding capable personnel. Here’s how to change that.
  • U.S. manufacturers should conduct corporate performance appraisals to locate talent shortages.
  • Manufacturers operating in enterprise zones are often eligible for hiring credits and workforce-related tax refunds.

U.S. manufacturers face a unique problem: despite high unemployment, the industry still suffers from a skilled-labor shortage. According to the Wall Street Journal, more than three-fourths of U.S. manufacturers reported having difficulty finding capable personnel, based on statistics developed by Accenture PLC and The Manufacturing Institute.


The advanced skills required by manufacturers are far more complex today than they were just 20 years ago. Manufacturers once had a limited shopping list for talent prospects (machinists, tool and die specialists, etc.). But with technology changing nearly all facets of production and jobs, the industry is demanding a labor force with a much more advanced skill set.

Here are three ways the industry could create a talent pipeline to fuel its ongoing resurgence.


The first step is conducting a corporate performance appraisal to identify where talent shortages exist. This helps target where talent upgrades are required. Staffing and performance challenges are often interconnected, and can have far-reaching implications for a company’s efficiency.

For example, if a company is experiencing a decline in market share or a sharp increase in returns or warranty claims, it may be time to reinvigorate the research and design (R&D) staff with new talent to spark new ideas. Poor retention rates, complaints and missed orders can also be signs of a need for talent improvement in client-facing positions. Companies lose customers for plenty of reasons, but regular assessments of sales and service staff is crucial in minimizing negative feedback.

Behind the scenes, a robust and adequately trained maintenance staff is crucial in minimizing costly equipment failures and upholding safety standards. From a product perspective, frontline operators ensure safety, quality and timely delivery of the product. The right talent and properly established systems, such as standardized work, can ensure that these employees can safely and efficiently handle their jobs.

Beyond those on the front lines, talent across all levels is imperative to a company’s day-to-day function. Signs of poor management such as issues with grievances, absenteeism, and labor turnover can arise once talent is identified and hired. Companies must make sure good employees aren’t driven away by poor managers.

Next, the second step is a review of opportunities missed due to a lack of new talent and ideas. These can include new processes for doing business, new products or new customers and markets.

A number of manufacturers are pursuing improvement methodologies, such as lean manufacturing or Six Sigma. Unfortunately, many process improvements never progress beyond basic implementation. Establishing performance management systems that allow managers and employees to grow their skill sets and lead improvement efforts is an important step when implementing new systems and chasing new leads.

Furthermore, a rising economic tide can lull manufacturers into complacency regarding product development. R&D talent should drive efforts to create new products that incorporate new technologies, materials and software. And it’s important for talent to capitalize on new markets to penetrate – manufacturers don’t want to miss out on new business because there isn’t enough or the right kind of sales talent in place.

Human resources staff can supplement this analysis via performance reviews and employee surveys with questions such as: Do employees need training to fill a skills gap? Are they willing to relocate? The end result is a talent development plan with long- and short-term components. In the short term, identify urgent skill requirements and corresponding quick solutions, such as outsourcing, temporary staffing, new hires or reallocation of employees. For long-term staffing success, a talent pipeline plan should be established to focus on recruitment of new talent and long-term employee development, training and retention.


Manufacturers will have to fight for the talent they need. More companies looking for talent means that competition for the best talent is increasing.

Manufacturers must consider a range of approaches to attract job candidates as well as retain existing talent, especially for advanced skill sets. Smart executives and HR leaders get the most out of their talent, including both new hires and longtime workers, with a comprehensive strategy that includes multipronged recruiting and complete recruitment packages, a hire-then-train option, and full onboarding and coaching.



Manufacturers also have a range of financial supports available for growing their workforces.

The federal government offers several notable hiring incentives, including the Work Opportunity Tax Credit for companies that hire individuals from specific target groups, including veterans. The Make it in America Challenge seeks to encourage foreign and domestic businesses to build and/or expand their operations in the United States. Up to 15 awards will be made to accelerate job creation by encouraging re-shoring of productive activity by U.S. firms, fostering increased foreign direct investment, encouraging U.S. companies to keep or expand their businesses—and jobs—here at home, and training local workers to meet the needs of those businesses.

U.S. states, cities and counties have also established enterprise zones. Companies operating in these zones are often eligible for hiring credits as well as add-on, workforce-related tax refunds. Many of these states offer additional hiring tax credits.

Through taking a comprehensive approach to hiring, and making use of existing economic financial supports, U.S. manufacturers have the opportunity to reverse the talent gap their industry is facing. And with the right talent in place, the industry will be well positioned to produce a brighter future for itself and the overall economy.


Rick Schreiber is Memphis Assurance Managing Partner and Manufacturing & Distribution Practice member at BDO USA LLP. He has more than 20 years of public accounting experience in the manufacturing, distribution, retail, technology, and healthcare industries. He also has extensive experience with IPOs, secondary debt offerings, and mergers & acquisitions, and working with private equity companies both at the fund and portfolio levels.