Manufacturers Must Attract Gen Y Employees To Be Successful

June 29, 2007
This segment will determine the future of manufacturing companies, says new study.

Manufacturing must overcome its negative image to appeal to Generation Y (Gen Y) employees since they will constitute 40%-60% of the workforce by 2025. Gen Y is comprised of people born between 1982 and 1993, who are entering the workforce for the first time with primary, secondary, college, or graduate education.

In a new study Deloitte Consulting LLC points out that manufacturing is no longer viewed as a source of stable, high-reward career opportunities. "What Generation Y doesn't know is that, contrary to common perception, the job of a modern manufacturing worker requires strong technology, flexibility, multitasking and team problem-solving skills. The environment in most plants is a far cry from the old images of dark, dirty and dangerous," Deloitte says in its report titled, "Managing the Talent Crisis in Global Manufacturing: Strategies to Attract and Engage Generation Y."

Furthermore, the report points out that there is a growing volume of service-related occupations within manufacturing, including sales, marketing, research and development, customer service, financial and legal services. To succeed in attracting these new workers, the manufacturing industry needs a model of talent management that will address the unique characteristics of Generation Y while speaking to the larger workforce as well.

"While this talent gap varies a great deal across manufacturing industries and geographies in terms of magnitude, age, and skill type, there are common elements," said Leah Reynolds, national practice leader for generational change and total rewards communication, Deloitte Consulting LLP. "Managing these elements -- such as lack of employability, negative image, education, job training and availability of engineering graduates -- should be a priority for global manufacturers."

Attracting qualified workers in countries such as China, India, Latin America and Eastern Europe is becoming increasingly more difficult according to the report. The skills that were most often cited as insufficient were in the areas of leadership, teamwork, English language proficiency and managerial capability.

Challenges identified vary by region:

China: Despite the enormous pool of potential recruits, manufacturers in China face a shortage of talent based on rapid economic transformation, demographic shifts, skill levels, inadequate quality of parts of the workforce and competition for scarce managerial talent.

Southeast Asia: Growing skill requirements in Southeast Asia indicate that in the long run firms that fail to connect to the younger generation will not be able to take complete advantage of migrating to high-value-adding industries.

India: Manufacturing faces stiff competition from services and IT industries in attracting and retaining the white-collar workforce. Cost pressures are growing and many skilled technicians also migrate to the Middle East for better pay.

Latin America: In Brazil, there is a severe talent shortage at the middle management level. As mid-level managers move into leadership positions, there will be an even larger void in mid-level talent pools. Mexico however, is suffering a shortage of technicians (working in production, operations, engineering, and maintenance), assembly line operators, engineers, customer sales/service representatives and maintenance managers.

Eastern Europe: As skill shortages become more apparent in the region, manufacturers feel increasing pressure to pay higher wages. For example, in the Czech Republic, wages were 10% higher in the second quarter of 2006 than they were the previous year -- one of the highest rates of increase in the EU.

Now that Generation Y has stepped into the talent management pool, Deloitte's study indicates that manufacturing firms need to consider how effectively they are providing what their employees value most:

  • Long-term career development and multiple experiences within a single organization
  • Sense of purpose and meaning in work
  • Availability and access to mentors across the company
  • Work-life flexibility
  • Tech-savvy work environment
  • Open social networks that embrace open and honest communication

Click here to view the full report in .pdf format.

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