The CFO Survey, a collaboration between Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, monitors CFO optimism and key concerns. According to the survey, labor quality and availability was the second most urgent issue (after monetary policy) during the third and fourth quarters of 2023. Indeed, it is no secret that CFOs have been deeply concerned about the labor shortage for several years.
Manufacturing companies face a particularly difficult time finding and retaining qualified staff. Across the country, job opportunities for assemblers, machinists, technicians, and engineers frequently outnumber qualified candidates by a large margin. The good news is that there are solutions available to assist companies in attracting and retaining top talent.
Financial Incentives for Workers
In today’s competitive labor market, one way to recruit and retain employees is through financial rewards. These may include signing incentives, stay bonuses (given to employees who stay for a set amount of time), and above-market pay.
Employee compensation packages can be expensive, but employees also value standard perks like health insurance, cafeteria plans, and 401(k) plan matching contributions. Negotiate with providers to determine if you can lower costs while still providing these services to employees.
You might also consider providing “voluntary” benefits such as consumer goods purchasing services, life insurance, or disability insurance. Employees typically pay for these benefits, though they may be payroll-deducted. Employers might be able to give these programs to employees at a cost that’s lower than through traditional channels.
Intangible Benefits
Remember, the idea is to make your organization as appealing to potential employees as possible while staying within budget. As a result, before expanding your wage and benefits budget, assess your employee value proposition (EVP). EVP encompasses everything employees value about working for your organization. It may surprise you, but while salary is important, it is not always an employee’s top priority.
When reviewing your EVP, speak with workers to determine what they value most about working for you. Many employees value intangible benefits such as respect and concern for their well-being, a positive corporate culture, learning and training options, and professional development opportunities.
Take a hard look at the training and development opportunities in particular. Cross-training, for example, can provide an intangible employee benefit while also mitigating a labor supply shortage by maximizing your current workforce. Also, investigate whether an apprenticeship program is appropriate for your manufacturing business. Employees may also be looking for a more flexible work schedule. This can involve flextime (changing the start and finish times of the workday) or compressed workweeks (working the typical number of hours in less than five days).
Finding the Right Fit
Survey your employees to determine which financial incentives and intangible perks they value the most, and identify gaps. Creating a workplace with a strong EVP will assist you in assembling and maintaining a talented, motivated, and productive team, which will benefit your manufacturing business. Contact us to learn more.
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