Threading the Needle on the Future of Work

Threading the Needle on the Future of Work
Industry Week August 2021
By Stephen Gold

“Others are going to a hybrid model, and we’re going to be competing for talent. So how do we do a good job of threading that needle to make sure that we’re not making decisions … that put us at a disadvantage in terms of getting talent?” – Manufacturing CHRO, Summer 2021

Nothing exemplifies the transformation of the past year more than manufacturers’ 180-degree philosophical pivot regarding their work models.  They aren’t alone on this journey, of course, but historically the factory sector has been slow to evolve. That is not so much the case anymore. The question is not if manufacturers will change, but how they’ll thread the needle to create a balance that ensures workforce stability.

A recent Manufacturers Alliance survey of 400 human resource and function leaders in large manufacturing companies, conducted in partnership with Aon, offers perspective on the extent of this challenge. Prior to the pandemic, almost nine out of 10 manufacturers had an in-person-only work policy for executives and factory workers alike; over the next three years that number will diminish to two out of 10, with the majority adopting a hybrid work model. The findings, published in a study titled The Future of Flexible Work in Manufacturing, demonstrate a post-pandemic evolution – perhaps even revolution – in manufacturers’ strategies, priorities, barriers, and tactics for managing their workforce.

One clear takeaway is that attracting and retaining talent has grown into an even bigger challenge than it was pre-pandemic.  More than half of department leaders, and two-thirds of HR leaders, reported this at the top of their sleep-inhibiting list of concerns.  This is only exacerbated by the evolution in digitalization and virtual work, which round out their top three worries. Moreover, talent development looks different than before: When asked what workforce training they’ll focus on over the next three years, manufacturers viewed soft skills such as adaptability, leadership, collaboration, and communication skills as central to managing the accelerating change most manufacturers expect.

A second takeaway from the survey is that virtual work is here to stay.  Not only do almost nine of 10 manufacturers recognize flexible work models as being important in the next three years, one-third believe the employee preference, rather than corporate preference, will be the primary driver of flexible work arrangements.  (While this reflects a huge shift for manufacturers, it still lags other industries.  Aon’s HR pulse survey in May 2021 found three-fourths of all businesses are focusing on employee preferences.) Manufacturers’ perspective about the future of work is clearly evolving – almost two-thirds of those surveyed said the top lesson learned in the pandemic was the ability of employees to be productive while working virtually.  As a consequence, hybrid work will become the prevailing model for salaried manufacturing employees in the coming years.

What about factory workers?  While options for flexible work are limited here, as one senior vice president of HR told us, “The manufacturing world is going to have to adjust in order to attract and retain really talented people … especially on the plant floor.” Thus, while seven out of 10 manufacturers presently don’t have flexible work options at the factory level, about 15% do, and 15% more are considering it, including flexible hours, compressed work weeks, split shifts, and shift swapping.  As technology advances, allowing for more remote factory capabilities, flexible work in the factory is expected to grow even more.

Yet another takeaway from the report is that, rather than the traditional top-down approach in decision making here (which we’re seeing in many other sectors, such as financial companies), most manufacturers are creating inclusive task forces to define their future work model.  Not only do almost 90% of manufacturers say that it’s important to develop flexible work arrangements over the next three years, organizational agility – such as flexible work models and reskilling employees into new roles and functions to support evolving business needs – is now viewed by virtually all manufacturers as a prerequisite for competitiveness.

Related to this, roughly 60% of respondents found cultural resistance to change as the primary organizational challenge to future-of-work strategies.  There may be legitimate reasons for this caution.  Some leaders point to preserving their corporate culture as the primary reason they are hesitant to shift to flexible work.  “How do you keep the culture going [in a virtual world]?” asked one leader.  “How do you keep the value system understood, and how do you get that connectedness?”

In other words, how do companies thread the needle in this new era in order to continue attracting talent while ensuring sufficient human interaction to drive collaboration and innovation?  Manufacturers will need to prepare themselves not for a better sameness, but for a better newness.