Peter Fruehling, VP Sales, Manufacturing
The manufacturing industry is no stranger to navigating operational challenges, including supply chain disruptions, inflation, talent shortages, and now rising tariffs. These barriers can have far-reaching effects on operational efficiency, cost management, and workforce planning.
As HR professionals, it’s essential to understand these impacts and proactively address them to maintain operational productivity. Now more than ever, manufacturers need to build a strong and stable workforce.
In this blog, we’ll uncover the impacts of today’s economic landscape to the manufacturing industry and how HR teams can build a resilient workforce.
The Impact of Today’s Economic Landscape
Today’s economic landscape is impacting US manufacturers in several significant ways:
- Increased Production Costs: Rising tariffs directly increase the cost of imported goods, which can lead to higher production expenses. This increase in costs are either passed on to consumers in the form of higher prices, or absorbed by the manufacturers, reducing profit margins. Some manufacturers have found it economically unfeasible to continue operations at certain plants, resulting in reduced output or even plant closures.
- Supply Chain Disruptions: Delivery times of raw materials and components have not returned to pre-pandemic norms, causing delays in production and missed deadlines. With labor shortages continuing to be a challenge for this industry, the unpredictability of supply chains continues to post a major obstacle. Manufacturers are forced to reevaluate supply chains and find alternative suppliers, which can be time-consuming and costly, further straining operations.
- Workforce Management Challenges: Attracting and retaining skilled workers continues to be a top concern for manufacturers. Economic uncertainty has led to fluctuations in the labor market, making it harder for companies to maintain a stable workforce. From shortages in skilled labor to layoffs to reduced hours to hiring freezes, a smaller workforce can lead to operational inefficiencies, as remaining employees may be overburdened and unable to maintain optimal production levels.
Adapting to Change: How to Efficiently Hire Essential Workers
With the significant financial strain manufacturers are facing, companies are seeking ways to stabilize business operations. There is a growing demand in onshoring and bringing production closer to home to help mitigate the costs of imported goods and allow companies to respond more swiftly to market demands.
Moving operations closer to home also means HR teams are tasked with finding qualified talent efficiently. To do so, manufacturers need to lean on a background check partner who can help them build their workforce.
Here are 4 ways a background check partner with manufacturing expertise can help companies hire and onboard skilled talent while achieving operational efficiency:
- Utilize Recruitment Technology: Implementing advanced recruitment technologies can help speed up the hiring process so workers can get hired and onboarded faster. Integrating background checks with an Applicant Tracking System (ATS) can streamline the hiring process, automate repetitive tasks, and centralize recruitment activities. ATS platforms often include analytics providing valuable insights into recruitment strategies, enabling HR teams to refine their processes and make more informed hiring decisions.With over 100 ATS and HCM platforms, First Advantage helps manufacturers simplify their background check process to save money, time, and provide a better candidate experience.
- Deliver Bottom-Line Savings with Tax Credits: Manufacturers can hire the right talent while reducing their tax burden by utilizing the Work Opportunity Tax Credit (WOTC) program. The program is a federal income tax credit program designed to incentivize employers to hire candidates who face challenges to employment.
Individuals who qualify under the WOTC program can include:
- Food stamp recipients
- Vocational rehabilitation referrals
- Qualified veterans
- Long-term unemployed
- Supplemental Security Income (SSI) recipients
With First Advantage’s automated solution for determining WOTC eligibility, manufacturers can:
- Screen candidates for eligibility as part of the overall background screening process
- Understand new hire tax credit eligibility early in the hiring process
- Navigate complex tax and reporting requirements
- Maintain a positive employee experience
- Provide Tools to Address Compliance Requirements: Manufacturers need to adhere to regulatory compliance due to their unique industry regulations. Failing to comply with these can result in financial liabilities as well as potential damage to the company’s reputation. With varying state and local regulations, such as Ban the Box and Clean Slate laws, manufacturers can benefit in partnering with a background check provider with manufacturing expertise to navigate the complex landscape of laws and promote fair hiring practices.First Advantage offers tools and information needed to help these applicable laws. We also help to address compliance requirements specific to the manufacturing industry.
- Save on Costs with Contractor/Contingent Hiring: To maintain flexibility, manufacturers should also explore hiring contractor/contingent workers who can adapt to changing production demands. Although they may not be traditional employees, conducting contractor background checks with a background check provider who understands the manufacturing industry can help protect an organization’s reputation and mitigate risk.
Staying Resilient and Meeting Your Bottom Line
While today’s economic uncertainty can complicate operations and workforce management, manufacturers have the opportunity to gain the upper hand in finding and retaining top talent. By utilizing recruitment technologies, exploring Tax Credit programs, and partnering with a background check partner with manufacturing expertise, organizations can begin making an immediate impact on their people, their hiring, and their overall bottom line.
Learn more about First Advantage’s manufacturing background check solutions here.
