Nearly 78 million manufacturing employees will retire in the United States over the next 10 years, according to the National manufacturing institute, and 82% of manufacturing CEO's say the skills gap will affect their ability to service customers.
Manufacturers today are having difficulty hiring and retaining skilled workers and when coupled with historically low unemployment rates, companies are finding themselves in situations where traditional staffing models are not cutting it -- they need a Plan B -- a contingency plan for staff shortages when local staffing agencies aren't able to support their evolving needs.
Thankfully, there are staffing companies like MADI that specialize in contingency planning and providing staffing solutions specifically for staff shortages. Traditionally, this service has been used during labor disputes -- for when a union workforce goes on strike or is involved in a lockout at their facility -- but as it turns out, this method for sourcing workers nationwide and quickly mobilizing experienced workforces across the country is a PERFECT solution for staff shortages and skills gaps.
Why consider a contingency plan for staff shortages?
Companies have traditionally relied upon regular local staffing agencies to fill in these staffing gaps, but these agencies are experiencing the same hiring challenges as the businesses they're servicing. A lack of available candidates often results in staffing agencies delivering unskilled and under-qualified candidates creating set backs such as longer training periods, high turnover, and increased costs -- which is not a recipe for achieving operational stability and catching up on production backlogs.
If you were to draw a circle around your plant with a 50 mile radius, how many EXPERIENCED manufacturing workers would there be? Of those, how many would be unemployed or employed and looking for a new job? Much less. With the average unemployment rate in the U.S. being 3.8% in March 2019, human resources are very limited -- and EVERYONE is competing for them. When your Human Resources and Talent Acquisition teams are putting their hands up in the air because they don't know what else to do to source talent, it's time to reconsider how you're sourcing talent to match the changing labor market and gig economy.
How To Develop A Contingency Plan For Staff Shortages & Skills Gaps
The main components of a business continuity plan include a business impact analysis, recovery strategies, plan development and testing/exercising.
Business Impact Analysis (BIA)
A business impact analysis predicts the consequences of a disruption of a business function and process and gathers information needed to develop recovery strategies. In the case of staffing shortages, consider the impact of:
- Lost sales
- Delayed sales
- Increased expenses such as overtime, outsourcing, expediting costs, etc.
- Contractual penalties
- Customer loss
You'll also want to consider timing, duration, operational and financial impacts. When would a worker shortage have the biggest impact on your business -- during your busy season or at the end of a particular month or quarter? This will help you determine when it's time to start considering implementing your staffing contingency plan.
Recovery strategies include alternate means to restore business operations to a minimum acceptable level following disruptions such as machinery breaking down, utility outages, supply chain interruptions and natural or man-made disasters. In the case of a staff shortage, however, this may include overtime for full-time employees and a mix of traditional staffing agencies or a contingency staffing service.
In states with extremely low unemployment such as North Dakota, Iowa, South Dakota, Wisconsin and Tennessee, companies are finding that temporary agencies are having the same trouble finding skilled labor and they're supplying under-qualified workers which increases training time and causes high turnover and increased costs. When traditional staffing agencies aren't delivering the quantity or quality of temporary help you need and desire, then bringing in labor from outside the area with the help of a contingency staffing provider may be required.
Contingency staffing companies are typically used when a company needs to fill open positions quickly. By sourcing their talent nationwide, these companies can respond more quickly, with more workers, and with a more skilled workforce than a traditional staffing agency.
Reach out to a contingency staffing provider to learn more about how their service works and how quickly they could provide support in the event that you suddenly need staff quickly. Response time can vary between job categories and industries, so it's better to understand this now than to be scrambling in a pinch later.
For example, turnaround time can vary depending upon skill sets and number of personnel needed such as skilled CNC Machinists and Welders as opposed to Assembly workers or Machine Operators. Determine what might be a realistic ask for your business needs -- what if you need to add a team of CNC Machinists or Welders or maybe another 100+ assembly workers to your operations. Download our free staff shortage contingency planner to prioritize your skilled trades and production roles and identify potential staffing gaps.
Then speak with a contingency staffing vendor about your potential needs and the type of support they could provide to your organization if needed moving forward. Some questions to ask include:
- How quickly can a team be on-site after a request is made?
- Who would on-board the temporary workforce?
- How many people can our management team actually intake and train at once?
- Would you need to ramp up the workforce over several weeks?
- Will the temporary staff work on the same shift or across different shifts?
- What are the costs to mobilize a team to my facility or facilities?
Contingency Plan Development
If you're in a position where you're concerned that a staff shortage could have a severe impact on your business, then it's important to put together the right team and gain management approval. If a company has never used contingency/travel labor before it can be hurdle to get the entire team on board; however, in today's changing labor climate companies must shift their mindset and talent strategies to overcome challenges such as labor shortages and skills gaps.
Who Should be Involved With The Contingency Planning Process?
The main roles that are frequently involved with this type of planning and execution are Human Resources/Talent Acquisition, Operations as well as Executive Leadership such as the CEO, CFO or COO. The roles can differ from organization to organization and can change with the size of the company.
Small to medium size companies may include human resources, operations and executives/owners of the business. For enterprise companies, regional and/or corporate human resources and operations may be involved as well as the key leadership from the facility looking for temporary staff.
As a rule of thumb, you'll want to include critical stakeholders that will play a role with engaging the contingency provider and working directly with the temporary staff. Everyone involved should be on the same page with regards to expectations, timeline and project management to ensure project success.
Testing & Exercises
A critical component of any contingency plan is testing and exercises of the plan. If your organization is skeptical about using a contingency staffing vendor or concerned that the level of talent provided will be no different from what's being provided by local staffing agencies then the best thing to do is test the service by bringing in a small group of workers.
Maybe you anticipate increased customer demand next year, but have a small need at a facility now -- test it and bring in a small group now. By working with the service provider you'll learn how everything works from employee selection, and on-boarding to project management and billing. If your potential need is 100 temporary workers, for example, start with a small group of 15 or 20 and if all is going well ramp up by adding groups of 20 until you reach your desired staffing level.
Why Contingency Staffing Over Traditional Staffing?
A key difference between a contingency staffing service and staffing agency providing temporary staff and is the contingency planning expertise and project management. With executive management oversight and field supervision to coordinate logistics, on-boarding, and ensure the workforce arrives as a group on-time each day prior to their scheduled shift -- the efficiency, reliability and productivity is unmatched.
Another critical difference between traditional staffing agencies and contingency staffing agencies such as MADI, is the size of our labor pool. Sourcing candidates from across the entire United States opens up the available resource pool for access to larger groups of workers, more skilled candidates, and enables us to rapidly deploy our teams for urgent staffing situations.
Imagine being able to hire EXPERIENCED manufacturing workers from our national talent pool without the restriction of a 50 mile radius around your plant. Imagine being able to have 50, 100 or 200+ EXPERIENCED production and skilled trades workers on-site within two weeks, regardless of your location. This is much faster than the average time to fill skilled production worker positions these days, which is 93 days, according to the 2018 Deloitte and The Manufacturing Institute Skills Gap and Future of Work Study.
Why Access Talent From A National Labor Pool
Adjusting the size of your labor pool alone can solve large-scale staffing challenges for companies in need of hundreds of workers very quickly. This also provides an effective temporary solution for skill gaps when there is a lack of skilled trades and technicians within a particular region.
Rather than leaving production lines down or leaving critical positions unfilled such as CNC Machinists, Welders and Maintenance Techs, more companies are turning to contingency staffing because they're able to hire experienced workers that can step right into their operations, acclimate quickly.
Quickly Ramp Up Manufacturing Operations
With unemployment so low, even Fortune 500 companies offering great pay and benefits are having trouble filling their factories with full-time employees these days. In a situation where there is an unexpected spike in demand, how can they ramp up manufacturing? Finding hundreds of workers locally to add another shift to their operations is nearly impossible, never mind doing so quickly.
This is where having a contingency plan and a contingency staffing vendor to help becomes critical -- because it's a controlled mobilization, an efficient on-boarding process and continued hands-on project management throughout the project to ensure operational stability.
In today's rapidly changing business environment its more important than ever for businesses to remain agile and that goes well beyond technology delivery. We're in a new phase of workforce innovation right now and with increased competition, shrinking product life cycles and evolving customer interests, companies must be able to alter their direction and adjust quickly.
In today's labor market, forward-thinking companies are shifting their mindset on talent, considering different staffing strategies, preparing contingency plans and deploying workforces for staff shortages in order to maintain competitive advantage.
Finding Skilled Welders From All Over The United States
In the video above, Tanya, HR Manager at TCF, describes her experience and the ROI of working with MADI to deliver experienced Welders to her facilities from across the country.