Labor Challenges in Modern Factories: Strategies for Success

In the food and beverage industry, manufacturers are increasingly pressed with the difficulty of securing the right quantity and skill level of labor required to meet their production demand. The “great resignation” brought?unprecedented turnover rates of 40%, and manufacturing is seeing quit rates almost double pre-pandemic levels. With labor challenges not expected to ease in the near future, we are increasingly helping clients attract and retain good talent, while simultaneously helping them refine their manufacturing processes for enhanced efficiency. The good news is we’ve seen a few commonalities working with our clients on such challenges and have developed actionable strategies to navigate these turbulent waters.

In this post we’ll cover some of the labor challenges manufacturers face today, various strategies you can employ to address them, and provide insights into how we helped a manufacturer improve their labor efficiency by 50%.

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The Labor Dilemma

While nearly every industry across the globe is adapting to evolving talent markets, manufacturing facilities face a unique set of labor-related challenges:

1. The Changing Workforce: Many current employees are getting ready for retirement, resulting in employers having to deal with a twofold problem: a loss of experienced talent, and? as many as 85% of manufacturers are having trouble filling open positions.
2. Rising Wages: As wages continue to rise, manufacturers are looking at their spending across the board to understand where they can spend more efficiently and remain competitive.
3. Automation: While automation is undoubtedly going to affect long-term planning, between the large capital expenditures required and the need for quick results, it may not be the solution for a lot of manufacturers’ immediate labor challenges.

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Strategies for Success

Businesses need to adopt a multifaceted approach towards filling and retaining key roles in order to stay afloat and thrive in an ever-competitive market. Some of the strategies that can be employed include:

1. Technical Problem Solving: While it may seem counter-intuitive, one of the best ways to solve labor challenges is to actually solve mechanical challenges. In many factories, machines aren't always set up optimally which often means people are required to make up for the resulting errors and to keep the line running at speed. Working with vendors and internal experts to address the issues that cause these problems can reduce the amount of labor required on the line at any one specific time.
2. Enhance Efficiency: Similarly, making your existing processes more efficient can positively impact your labor challenges. A common situation we’ve seen is if a particular production line is operating at 50% efficiency, strategic improvements – like fine-tuning production processes or optimizing machine setups – can help boost efficiencies, and ultimately gain additional output for each labor hour. This means your outputs will be higher without increasing your labor costs.
3. Optimize Labor Deployment: Adjust your staff levels to match production needs throughout the day to maximize output. For example, adjust staffing levels based on the product being run on the line or let operators call it a day if production ends early. Alternatively, while critical machine operators need to start their days before 7am “start time” to set up machines, other roles needed further down the production line can later, depending on production needs.
4. Enhance Communication: It may seem obvious, but with how busy manufacturers are it can be easy to lose sight of the importance of regular communications with workers. Keeping employees updated, acknowledging their efforts, and providing support when they face challenges can boost morale and retention. Plus, including employees in decisions that affect how they do their job not only ensures that all perspectives are considered for the new solution, but is also likely to increase employees’ sense of ownership and improve the success of the new initiative.
5. Focus on Retention: We’re increasingly seeing manufacturing companies take steps to ensure that they provide better, safer places for their employees to work. Employers are attracting workers by offering career advancement and skills development opportunities as well. With younger workers placing a high value on non-monetary benefits, companies should also consider what they can offer that will help their organization stand out and retain their most talented employees– whether that’s healthcare, flexible work, additional paid leave, childcare benefits or something truly unique to you.

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A Real-World Example We’ve Worked On

An Ontario-based meat producer had successfully grown to prominence in their industry but found themselves grappling with new labor challenges. They reached out to the team at Isaac to help solve them.

The first challenge had arisen as the province’s minimum wages began to rise. Their wage offerings, once a competitive edge in attracting workers, now stood nearly on par with local fast-food establishments. This wage parity posed a significant challenge, as the perceived nature of factory work was less appealing in the job market, resulting in workers opting for customer service roles instead.

Beyond the cost of labor, process issues were becoming more apparent. The factory's strict sanitation and food safety protocols meant that workers took longer to get prepped for work, impacting overall productivity. Plus, while the company had invested heavily in sophisticated machinery and automation to streamline processes, they faced frequent operational challenges. This meant workers often struggled with the technical aspects of these machines, leading to frequent manual interventions that defeated the purpose of automation.

To address these challenges, Isaac worked with the producer to gain a full understanding of their business and develop a series of transformative steps. Working closely with the client, production lines were optimized for improved labor efficiency, resulting in reduced machine downtimes and less strenuous work for the staff. The Isaac team identified and fixed problems that stopped the line, improved machine speed, and corrected individual problems that were requiring additional staffing to mitigate. Isaac also implemented a comprehensive labor management system, which provided real-time data on production lines, workforce requirements, and efficiency metrics. With this data at their fingertips, supervisors could make informed decisions, ensuring optimal staffing levels throughout the day.

The culmination of these efforts? After a year-long project with Isaac, the client achieved a 50% increase in labor efficiency. This transformation not only bolstered their production capabilities but also significantly enhanced worker satisfaction and retention.

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The Road Forward

With a labor shortage, combined with changing worker preferences, manufacturers understand that multiple changes have to be made to adapt and thrive in a changing environment. This involves taking a deep look at their current processes to identify and solve current inefficiencies while also rethinking their hiring practices to reflect the current job market. With the right strategies in place, businesses will be better equipped to deal with the labor challenges facing them today and be able to adapt quickly to future developments as they arise.

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Isaac is a consulting firm that helps organizations save money and achieve their operational goals. Our approach is designed to deliver tangible, long-lasting results through providing actionable insights that produce results in a matter of a few months.

If you are interested in learning more about the types of problems we tackle with our clients, get in touch with us.? We’ve completed hundreds of projects with our unique approached tailored to the specific needs of our clients.

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