Published on January 24, 2024
This year’s manufacturing outlook, a roundup of top analyst trends: sky-high quit rates, balancing effectiveness alongside the employee experience, and good news, there’s still plenty of gas in the digital transformation tank.
The industry analysts are polishing their crystal balls to a gleaming shine for 2024. Here are the most interesting forecasts we read about the future of connected work and employee engagement for this year.
1. It’s the 2024 Jumbo Edition of Where’s Waldo for Talent
This one topped pretty much every prediction list we saw.
Quit rates in manufacturing were 40% in 2023, with a gap of over 600,000 jobs remaining unfilled in the US. Sector-wide pay increases did stem the bleeding slightly, but clearly not enough to make a significant dent in solving turnover.
Deloitte expects labour market tightness to continue with a firm grasp into 2024. Manufacturers agree with this assessment as a recent survey by the National Association of Manufacturers (NAM) found almost 75% of manufacturing executives believe that attracting and retaining a quality workforce is their main business challenge. ‘More of the same’ means we’re stuck in a perpetual loop of hire, train, quit.
Deloitte noted two ways manufacturers are being proactive in order to break this cycle and improve their employee attraction and retention:
- Tapping into the knowledge of retirees by keeping them engaged as their careers wind down either through continuous job opportunities or as mentors to transfer knowledge to younger workers.
- Finding new opportunities to upskill existing workers, such as offering training during the freed-up hours digitization and automation can bring frontline employees. This arms your workforce with advanced digital skills, which are needed for a career path in today’s smart manufacturing universe (see section 3).
Manufacturers need to make sure they’re making the most out of their investments or else they’re throwing more cash out the window. Forrester expects that spending in employee experience software will continue, but the tools won’t be used to improve workers’ lives (and thereby retention), but instead prioritized to make HR functions more efficient. Efficiency gains are all well and good, but this ignores the original problem that the software was created to solve – manufacturing’s chronic struggle with employee disengagement and dissatisfaction.
“This will create an opportunity for companies that consciously choose to zig toward employee experience while so many others are zagging away from it.”
2. Up, Up, Costs Everywhere, Up
Inflation is not only driving up raw materials costs (+3%), but also wages (+5%) and energy prices. Experts are reinforcing their call for manufacturers to increase spending on cybersecurity, bringing it in line with other industries to protect their tech infrastructure and employees’ devices from mounting data breaches and cyberattacks. To top it all off, facilities and equipment insurance costs are climbing due to more downtime and interruption claims caused by damage from extreme weather events. All these mounting cost pressures have manufacturers looking for ways to remain competitive. Digital tools like Poka improve worker productivity while reducing waste in daily operations. It’s also one of the most effective ways to reduce onboarding and training costs – getting workers fully trained, faster and reducing pressure on L&D staff.
3. Quiet Enthusiasm – Digital Transformation is Still Expected to Drive Competitiveness
Thanks to investment and growth in the sector, manufacturers will continue to “embrace new technology and digital transformation will likely be important for manufacturers” as they look for opportunities to capture opportunities and tackle challenges, Deloitte said. Backing up this claim, 86% of surveyed industrial leaders said smart factory solutions will be primary drivers of competition in the next five years.
What’s today’s opportunity cost if you fail to land your digital transformation double-back flip? According to Forrester, expect to see up to 30% of Fortune 500 companies quietly easing back on previous commitments to set up onshoring factories. “We’ve […] seen some expensive embarrassment as overconfident early movers failed to get (individually great) machines, software, and people working together quite as well as they expected.” Commissioning a new plant is incredibly complex, but digital tools like Poka can help coordinate people and machines to get a new plant up off the ground in record time through rapid skill development, onboarding and paperless operations.
4. Data Will Feed Advanced Insights
In previous years, we focused on capturing and storing manufacturing data. In 2024, we mine it for gold. With advanced analytics, manufacturers are able to identify and respond to trends in real-time, make informed decisions about increasingly complex problems and uncover new opportunities. Global Trade Magazine said companies using big data are 58% more likely to surpass their revenue targets.
The good news is that the how of it is becoming easier too. With integrations and built-in dashboards like Poka Analytics, more and more non-technically trained staff can use these tools to great effect. Digitization of previously paper-based factory floor checks, audits and processes means that a whole new wealth of data is being unlocked for evaluation. Data analytics is also being integrated more and more native applications, adding more value and versatility into existing manufacturing applications.
2024 Is a Year to Stay Strong
While the winds of fortune bluster hot or cold for the year’s promised revolutionary technology – the industrial metaverse, or AI for example – this can easily overshadow the less flashy, slowly building trends. These three predictions call out the need for manufacturers to stay steady and capitalize on their innovative strategies for workforce engagement and digital transformation or else confront the consequences of stagnation.
