The manufacturing industry provides 17.2 million American jobs, or about
one in six private-sector jobs. But this major industry is not without
its challenges: manufacturers are highly regulated and unionized. They
also experience lots of seasonal work fluctuations and frequently have
to deal with employees across many disparate locations. As such,
manufacturers are under constant pressure to maximize efficiency.
Here’s a closer look at some of the challenges manufacturers face:
Rules & regulations
Manufacturers must deal with strict labor legislation, managing compliance with the Department of Labor (DOL) and with the Occupational Safety and Health Administration (OSHA). They can often be tripped up by improperly classifying employees as exempt or not paying overtime correctly, resulting in a visit from Wage and Hour Division investigators. Workplace safety is also a prominent concern, since many manufacturing jobs can put employees at risk of serious injury if safety protocols are not followed. That’s why OSHA training and up-to-date safety policies are critical.
A highly unionized workforce presents certain HR and payroll
challenges. Payroll systems must be able to easily handle union
deductions and required pay scale differences. Reporting tools must be
able to provide accurate documentation for discussions with union
leaders. Some union matters may also require the skill of an experienced
HR professional to help secure and maintain good relationships and help
the business follow all union rules.
Fluctuating workforce & seasonality
Many manufacturers deal with a certain amount of seasonality, which impacts labor demand and consequently, employee hours. Time and attendance systems must be able to handle changing schedules and have employee hours flow seamlessly into payroll. They must also provide immediate visibility into employee absences and missed punches, enabling supervisors to take corrective action and ensure that work is not interrupted.
Recruiting for specialized skills
A recent survey found that 49% of organizations are struggling to hire qualified talent for critical positions, and some of the hardest positions to fill include skilled trade workers, engineers and machinists. Recruiting for specialized skills can be a major challenge for manufacturers, making it all the more important to streamline the hiring process and guarantee that the right talent is getting to the right place at the right time.
Manufacturers must often manage communication, scheduling and reporting across many production facilities. Giving employees cloud or mobile access to schedules, pay history and time off balances caters to a workforce who is not often near a desktop computer. Integrated, cloud-based HR, timekeeping and payroll allow management to be mobile, responsive and have access to the data they need across all locations.
78% of manufacturers offer health care benefits to their employees, which is 24% higher than the national average. Using an HRIS can help ensure that benefits management, open enrollment and carrier communication are done quickly, correctly and in compliance with government regulations.
Reporting & analytics
Insight into labor costs
Despite technological advances, many manufacturing processes are still very labor-intensive. Organizations need insight into how much is really being spent on labor, which is often the number one cost of doing business. With sophisticated reporting tools, leaders can see labor costs across locations, analyze trends in overtime and make informed workforce decisions.
Responding to trends
Having quick access to labor data also allows manufacturers to respond to trends in real time. For example, if they notice that overtime has been unusually high over the past week, they can adjust schedules to compensate for the trend.
Access to other employee information can be powerful as well. When
managers can view each employee’s OSHA training completion, industry
certifications and expiration dates, they can be proactive about
ensuring that training is completed and certifications are renewed.
This helps the manufacturer remain in compliance and promote a safe
How to manage manufacturing challenges
Manufacturing requires workforce management products that are flexible enough to serve their unique needs yet powerful enough to get the job done. To be a strategic and successful manufacturer, companies need the right HR, payroll and timekeeping technology.
Paycor’s technology solutions give manufacturers the tools they need
* Robust time attendance clock system with employee and manager self-service, scheduling and missed-punch notification
* Mobile app that lets employees view pay stubs, request time off and contact coworkers
* Custom reporting that allows you to analyze trends in labor costs, compensation and benefits
* Applicant tracking that simplifies the hiring process for specialized skills
* HR management, including streamlined benefits enrollment and employee recordkeeping
* Compliance management, including OSHA injury report tracking and FMLA tracking
* Intuitive payroll that handles union deductions with ease
* HR Support Center, an online knowledgebase with sample policies and HR best practices to increase the efficiency of your HR staff
* HR On Demand, providing access to HR professional who can answer your questions
See how Paycor’s HR, timekeeping and payroll technology helped manufacturer US Liner increase efficiency and reduce labor costs.
Sources: NBC, MetLife, Manpower 2012 Talent Shortage Survey, CRS Technologies
Take Compliance Quiz
How effectively is your organization managing compliance risk? Find out and get a customized plan.Take Quiz
Stay Up to Date
Sign up to receive our latest research and expert advice.
Check your inbox for an email confirming your subscription. Enjoy!