manufacturing + distribution
2023 VOL 1
In March 2023, Sikich surveyed more than 130 manufacturing and distribution executives on their optimism, current workforce, hiring and retention strategies, and more. Scroll through the results below.
TAB THROUGH THE RESULTS BELOW.
The Sikich Industry Pulse surveys manufacturing and distribution executives from across sectors and the nation multiple times throughout the year, highlighting and responding to top trends as they arise. The Pulse results provide readers with real-time competitive intel to apply to their business strategies.
In March 2023, 57% of manufacturing and distribution executives rated their optimism a 7 or lower on a scale of one to 10. Climbing interest rates (17%) and overall poor economic conditions (13%) are the leading contributors to this lack of optimism.
MORE OPTIMISTIC VS LESS OPTIMISTIC
What our 2023 economic update with guest speaker, Michael Weidokal. Michael recaps the economic events of the past four years and uncovers issues facing the U.S. and global economies and how they may affect your business.
“With the recent hike in interest rates and inflation hammering the bottom line, I’m not surprised to see optimism lack improvement in our latest survey. I expect many executives will look to cut costs as the economy continues down this path. I encourage executives to continue to invest in processes that create efficiencies across their footprint.
Our survey also illustrated that, although prices are surging, many companies have not seen a downturn in customer demands. With competition for labor higher than ever, I suggest executives consider seeking differentiators within their talent strategy that set themselves apart from the competition.”
– Jerry Murphy, Partner-in-Charge of Manufacturing & Distribution Services
Despite increasing labor costs, stable customer demand forces industry executives to maintain or increase headcount. Our manufacturing Industry Pulse found that 92% of executives plan on maintaining or increasing their workforce over the next 12 months.
Those intending on increasing their workforce plan to do so at a steady pace.
INCREASING TALENT POOLS
With a large focus on expanding headcount, executives responded the time to fill open positions remains consistent compared to 2022, as manufacturers continue to benefit from an increasing talent pool. Some note layoffs in other industries and competitors’ inability to retain employees are keeping the talent pool plentiful.
number of days to fill open positions
current time to fill open positions compared to 2022
factors contributing to positions filling faster
Companies that aren’t able to fill positions as quickly are leaning on temporary workers and mandatory overtime to fill the voids. Fifty-seven percent of executives said it’s at least possible that they will use temporary workers in the next 12 months, with a majority (53%) of those executives adding these workers as a result of the labor shortage. Seventy-four percent of executives are anticipating mandatory overtime in the next 12 months.
An increasingly hot topic in the recruiting space among many leadership teams is pay transparency. Based on our results, of the companies currently or planning to implement pay transparency policies, 49% are doing so to improve recruitment efforts.
While many states have already enacted pay transparency laws, and several others recently joining the movement, manufacturers are struggling to keep up. States with proposed pay transparency bills include: Colorado, Connecticut, Hawaii, Illinois, Maine, Massachusetts, Michigan, New York State, Oregon, Pennsylvania, Vermont and Washington D.C.
Of our survey responses from the states above, only 28% of companies currently have or are planning to implement pay transparency policies.
pay transparency implementation
While executives are focused on attracting new employees, they haven’t lost sight of retaining their current workforce. Employee wages surged compared to the past five years: 81% of executives responded that the current wage increases are at least somewhat higher than the past five years, with 36% responding that they are significantly higher.
wages increasing faster than years past
wage increases over past 12 months
compared to past 5 years
With increasing resignation rates, high inflation and trends like ‘quiet quitting,’ employees are left wondering if their compensation accurately represents their value. HR leaders across industries, who are held accountable for making sure compensation cycles are fair, are all too aware of these trends. We recently sat down with top HR executives to share ideas on how to put an organization’s money where its talent is — and we addressed all things compensation: total rewards, pay transparency, budgets, incentive plans and more. Here’s what they had to say.