Reshoring and demand growth is happening at a time when the existing skilled workforce is approaching retirement. As experienced workers begin to age out of the workforce, there’s a lack of up-and-coming talent with the required skillset and experience to replace them.  Manufacturers are already feeling the impact of this, both in terms of capacity constraints and increased costs for hiring and retaining workers.  Many look to increased incentives to attract talent, or even capital improvements to reduce the need for workers, but a simpler and often overlooked approach is available.  Eliminating waste by reallocating lower skilled work can help your organization better utilize your existing workforce, and help you upskill the next generation of workers to take their place. 

In the aftermath of the unprecedented economic downturn caused by thepandemic in 2020, the manufacturing sector has displayedresilience in recovering lost jobs.As a matter of fact, it is not about the availability of jobs; it's aboutfinding and retaining the right workers to fill key positions. As of June 2023, there were582,000 job vacancies within the manufacturing sector, highlighting theurgent need for innovative approaches to talent acquisition and retention.

In the realm of business, evaluating different paths of opportunity involves an assessment of risk versus the value proposition. When the potential returns far outweigh the risks, the decision becomes easy. For manufacturers and distributors seeking streamlined workforce solutions, this process is no exception. The question arises: "How can my business optimize its operational efficiency and maximize returns?" Enter Veryable, an innovative platform that redefines operational efficiency, transcending the limitations of traditional staffing firms.

The rise of the gig economy and the emergence of app-based platforms have fundamentally altered the landscape of work, allowing individuals to earn income and access services in new and innovative ways. However, these advancements have not come without their share of challenges. Recent regulatory decisions and proposals have ignited a debate surrounding the proper classification of independent workers within this evolving ecosystem.

Automation, whether robots or co-bots, are drawing a lot of attention these days with the 43.7% growth of e-commerce and the increasing fulfillment needs across a number of industries and consumer categories.  We’ve all heard the familiar refrain that automation is taking over in manufacturing and logistics, but that has not been the case due to offshoring versus automation.  

As a company decision-maker, you know that continuous improvement is critical to competing, and digitization is all but required to win in today’s market. However, stakeholders don’t always agree on the best way forward. Often the introduction of any new technology to your long-standing operations is a battle, and buy-in at all levels is necessary to maximize value creation.

Whether you are a business or an Operator on the Veryable platform, one of the first things you’ll notice is the Operator reliability rating. That sounds like something you’d want to score highly on, but what does it mean?

As someone in charge of who comes in and out of your building every day, you’re rightfully concerned about their safety and anything that might jeopardize that. There’s a lot of thought put into who you hire and work with every day, because the right people make a big difference.

So you’ve heard of on-demand labor, and you’re almost ready to try it out, but first you want to know what type of work these workers can actually do. Maybe you’re looking for specialized workers, but you don’t have a need often enough to hire someone full-time. Or maybe you’re looking to support your existing skilled workers by bringing in workers to help with setup and cleanup tasks.

If your company regularly gives out overtime and your workers have come to expect it, you might be hesitant to adopt any solution that would wipe this away for fear that your employees would get upset about their lost income and quit. Likewise, if you’re already having employee satisfaction problems, you might hesitate to test the waters with any labor solution that might cause concern about job security.

The safety of the people working in your building is a top priority. You’ve probably spent considerable time and money ensuring that your operations are safe and accident rates stay as low as possible. So it’s natural that you’d be concerned about safety when bringing in people you haven’t worked with before.

When you shop for something, you look for ratings and reviews by other people. In the age of the Internet, that’s just how it goes. But even before the Internet, word of mouth was how people decided between Bill’s shop or Bob’s. 

Scaling your manufacturing business is hard work. You know that you will have to spend money to achieve this goal, but maybe you aren’t sure where your money would produce the greatest return on investment. Perhaps you’re even wondering if there are ways to scale without spending.

If you’ve ever engaged with independent contractors for a project, you likely understand how difficult and confusing worker classification can be in the United States. 

You’ve just gotten a 10% increase in orders, 1 employee is out on a scheduled vacation, and another two have called off for the day. Now you find your operations team is short and you’re scrambling to make sure you can fulfill orders. What are your options?

Have you ever tried to fix something that required a tool or a part, but once you had the tool, you still couldn’t solve the problem?  I’m flashing back to trips between my house and the hardware store, after getting home and via trial and error, realizing I needed a different size, different brand, or different tool altogether.  

I spent the early part of my career in Corporate Finance for many recognizable names in consumer goods manufacturing, and no matter how sophisticated the financial reporting system was, figuring out what hourly labor truly cost was always quite an exercise. If answering this seemingly simple question is difficult for a large Fortune 100 company to answer, it is not surprising that many of the businesses I talk to on a weekly basis simply are not educated on the true cost of their “$10/HR” labor.

“If you try to be everything to everyone, you’ll be nothing to no one.” – Unknown, perhaps the author?

In a recent conversation with an Operations Director, he was describing how his break room has grown quiet over the past few years. The change in break room atmosphere is not due to a poor work environment or staffing issues but rather how everyone now interacts with their phones instead of each other. The workforce is changing right in front of us and fast, as I can relate to a few years ago when a manager could not get a word in edgewise in the break room – even when he was announcing he bought lunch for everyone!

Labor Trends in US Manufacturing

As we mentioned in the Megatrends post, US manufacturers are facing a number of headwinds when it comes to sourcing their labor.  These manufacturers differentiate themselves by employing a skilled labor force to create products.  However, Most US manufacturers are small firms with 75% of them employing 20 people or less.

The skills gap problem

The manufacturing industry is booming, and soon there will be more jobs than workers.   Where have all the workers gone?  They are retiring at an alarming rate, and the manufacturing industry has failed to appeal to the younger generations. Traditionally, manufacturers have looked to technical schools, unions or apprenticeship programs to provide skilled labor. The problem with these traditional models is they aren’t working for the new workforce.  The training and apprenticeship programs are too long, too expensive and have too much turnover.

Businesses today face numerous challenges with adding capacity to their operation. They need a solution that can get capable, vetted workers inserted into their operation as soon as possible.

Online Growth 

Veryable offers a marketplace for on-demand labor that allows businesses and workers to connect. This use of a digital platform is similar to companies such as Uber, where a service is provided on-demand. According to the McKinsey Global Institute’s report, discussed in our previous blog, around 15% of independent workers have used an online platform to find work, but this number is growing. The benefits of using a digital shared labor pool are endless. The MGI survey gives us a few concrete examples of the benefits of an online platform.  

Millions of people around the world are waving goodbye to the traditional cubicle work life and saying hello to independent work. 

The large-scale redistribution of operational intelligence is an underrated consequence of digital manufacturing and other IoT based operational capabilities.  We previously explored how to think about Digital Manufacturing as a specific category of use cases and this installment will pick up specifically on the labor implications of such use cases.

As both employers and employees know, there’s a perpetual struggle to balance between the interests of a company and those of its employees. Companies benefit by cutting costs while increasing production, whereas workers benefit from increased pay and flexible hours. As we’ve mentioned before, neither party can be faulted for these expectations, which is why it is high time for a solution that satisfies everyone’s needs. And that’s exactly what a shared labor pool creates: a competitive environment that benefits both sides of the equation.

Manufacturing technology and the impact on human capital

In an interview with Strategy+Business, Joe Kaiser, CEO of Siemens, commented on the future of the manufacturing workforce saying that "remaining human resources will need different skills than workers used to have... People will still be in the factory, but they will be doing different work than they used to. Reskilling workers is a lot of hassle."