The current market outlook is like an unpredictable storm.
Manufacturers in 2022 are struggling big time because of this unpredictability. Not only do they face global supply chain uncertainty, but the cost of running operations is extremely high and there’s a lack of skilled people.
Organizational “brain drain” (also known as “knowledge drain”) means that people with valuable skills or knowledge leave a company and take their expertise with them. With Baby Boomers leaving the job market and employee turnover rates soaring among younger generations, brain drain has become a real challenge.
Fortunately, learning leaders can combat this brain drain.
3 elements of brain drain
In this article, I’ve categorized the elements of brain drain in manufacturing into three areas:
- Knowledge — The value of the skills and expertise of front-line team members. Combat brain drain by continuously improving a global repository of critical operational knowledge.
- Culture — Fostering a corporate culture of recognition and learning where people feel valued and motivated. Combat brain drain by building tracks for “career jobs” for learning and development.
- Technology — Easy-to-deploy front-line-first technologies combat brain drain by making it effortless to capture and share knowledge across teams, lines, and sites.
Knowledge: The “Gray Knowledge Flood”
After interviewing dozens of manufacturing leaders, ranging from learning and processing to innovation and packaging, I've concluded that there’s one common denominator in every conversation, regardless of industry or location: A skills and labor shortage.
According to The Manufacturing Institute, 97% of manufacturers worry about critical operational knowledge disappearing from their organization when employees leave.
And the Association for Manufacturing Excellence finds that the average American manufacturing company has an employee turnover rate of around 37%. This is 10 times the nationwide average—pretty shocking. In April 2022, more than one third of manufacturers reported difficulties in filling open positions. Jobs data released in the US on September 2, 2022 found that there are roughly two open jobs for every person who is looking for work.
About 10,000 Baby Boomers turn 65 every day in the US, according to the Census Bureau. This so-called “gray tsunami” removes a lot of expertise when these workers retire and leave their jobs. In fact, the majority of retired operators have shared less than half of their knowledge. One-fifth said they shared none of their knowledge, according to Express Employment Professionals.
The result is what I call the “gray knowledge flood.”
Whether they’re moving on or retiring, departing workers cause a significant problem. Manufacturing companies should care more about retaining their employees—and capturing the critical operational knowledge they hold. When that knowledge goes down the drain, it can have major negative effects on productivity, losses in revenue, and company culture.
Culture: The Great Recognition
So how do you get front-line team members to stay?
In the latest “Manufacturing Engagement and Retention Study” by The Manufacturing Institute, 69% of front-line employees under the age of 25 stated that “training” is a very important reason for them to stay with their current employer (the number was 42% for respondents above 25). A large majority—65%—of the younger workers also mentioned career development and opportunities as important elements for them to stay.
The top reasons for staying in their current manufacturing job across all ages included enjoying the work you do (83% of all respondents), stability (79%), and a corporate culture that supports work-life balance (69%).
It’s interesting to see that it’s not all about the money; people want to feel appreciated and engaged in their jobs, while developing their skills so they can contribute to something purposeful. A person who feels appreciated will always do more than what is expected.
Matt Fieldman, executive director of America Works, puts this very well: “It’s not ‘The Great Resignation’; it’s actually ‘The Great Recognition.’”
If manufacturing companies want to retain their existing employees and attract new talent, they should focus more on their employer brand. Millennials and Gen Z have consistently shown that they don’t want to work just for the sake of earning money: They want purpose.
Companies can set up on-the-job training programs for front-line team members that involve them in capturing knowledge and shaping processes in order to increase engagement, motivation, and retention. That’s what a culture of learning really is about.
Technology: The front-line tech stack
Of course, we all like to believe in the fairy tale of digitalization as a solution for everything—many of us think that digital transformation has all the answers. However, the reality is that only 26% of all digitalization use cases in manufacturing were scaled beyond a pilot last year, McKinsey research found.
This low number is mainly due to complexity, lack of people, and low adoption rates among front-line teams. If solutions are not user-focused, scalable, and easy to get up and running, a full roll-out of any digital solution will be extremely difficult.
Learning leaders know this all too well.
So how can they help solve the brain drain and labor problem now, without waiting for 6, 12, or 24 months for this unpredictable storm to calm down?
5 strategies learning leaders can use to combat brain drain:
- Audit your procedures. First, focus on what you can do instead of staring blindly at the uncertainties. Start with focusing on your processes and procedures. Are they standardized, documented, and up-to-date? If not, that’s a great place to begin.
- Capture knowledge. Make sure to continuously capture the critical operational knowledge from your front-line team members (while they're still here). Use easy-to-use “front-line-first” tools that are accepted by front-line teams as something that will help them, not replace them. Work knowledge capturing into your daily or weekly routines, not only once or twice per year.
- Involve to motivate. Plenty of research shows that if people are involved in the shaping of processes, they feel much more engaged and motivated in their jobs. Retain and motivate your team members by empowering them to take ownership of your standard operating procedures and work instructions. Set up a “buddy system” where senior engineers collaborate with juniors to create work instructions.
- Inform. Standardized procedures are pointless if nobody is aware of their existence. Share and communicate your best practices so that anyone who needs them has easy access. Create a digital repository of your standard operating procedures and make them visible and easy to use in the workstations with e.g., QR code stickers attached to machinery. Make it scalable by sharing best practices across teams, lines, and sites. Why waste time on creating something that has already been done well before?
- Continuously improve. Future-proof your processes by collecting feedback and improvement ideas from your front-line experts. Allow them to give feedback on the existing standards with their own improvement suggestions. Crowdsource ideas from your experts on the ground and foster a critical mindset—not only in the office, but also on the shop floor and in the field.
The current market might be an unpredictable storm but the thing we do know is that manufacturing still depends heavily on people and their skills. Learning leaders can take the responsibility for deploying these strategies in order to turn the “gray flood” of critical operational knowledge into always-up-to-date “knowledge ponds.” Always relevant and easy to access. Not only will this help onboard newcomers, but it will also help all front-line team members feel both valued and productive—two elements in creating a workplace where they’ll want to stay.
Explore leadership issues with your peers
Shifting learning culture or adopting new training strategies can be an uphill climb; learning leaders do not need to undertake this challenge alone. Share what works, and explore the strategies and skills required to navigate the needs of today’s ever-changing workplace with your learning leadership peers.
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