Biggest challenges — and best remedies
Biggest challenges — and best remedies
This section is part of our roundtable report: Innovation in the Business of Manufacturing
Our participants investigate some of the biggest challenges they’re currently seeing in the industry and potential paths forward. Key discussion points include:
- Recruitment and retention
- Performance and productivity
- How to best leverage Gen Z team members
Finding good employees
Every manufacturer at the MNP roundtables cited the difficulty of hiring good employees. They also emphasized that by good, they don’t mean highly skilled with the capabilities their company needs. They mean people with a strong work ethic. Those who can be counted on to show up, learn, and get the job done.
“You can’t train that into people. They either have it or they don’t,” says Dan Engelage, president of D&R Custom Steel.
Statistics Canada reported that in 2023, nearly half (48.4%) of manufacturing businesses expected recruiting skilled employees to be an obstacle.
According to employment agency Randstad Canada, a major challenge for Canadian manufacturers in attracting good workers is that manufacturing is one of the country’s lowest-paying sectors.
From the employer’s perspective, many find they can’t compete with larger companies on wages and benefits.
Offer appealing non-monetary benefits
Manufacturers say younger employees consider employee benefits an important part of their compensation package [2]. Among those benefits that workers consider to be important:
- Flexible schedules
- Career advancement
- Skills development
- Extra paid vacation
- Healthcare and dental benefits
- Childcare benefits
- Group life insurance
Along with technical tools to perform their jobs well, employees also want tools to optimize their well-being [3]. This is among the reasons they value and use employee benefits: massage therapy, mental health support, naturopaths and more.
One manufacturer found it helpful to communicate consistently with workers about paths to higher compensation. For example, the company offers two paths. The first is moving to a more senior role or a different role. The second is the annual compensation review and update, which takes place at the same time for all employees. This is also when there are discussions with workers about the steps involved in moving into different roles and the timing of those steps.
Hire on attitude, train on skill
“We try to hire more on attitude than aptitude,” says Jim Kranendonk, President of Curtainsider. Other manufacturers concur. Marcel Pantano, CEO of MTD Metro Tool and Die, says, “We used to hire on skill and fire on attitude. Now we hire on attitude and train on skill.”
The faster and better employees are trained, the quicker they become assets to a company. Higher retention, innovation, productivity, product quality, safety, and even customer satisfaction ¬are all byproducts of effective worker training [4].
One business owner finds that supporting workers to acquire their accreditation by the Canadian Welding Bureau, while not a requirement for the work performed by his company, means a lot to his employees. “The welder trainees love being certified.” Most important, the company’s retention rate is high.
As automation in the manufacturing sector advances, so will the need for employees with advanced manufacturing skills. Since workers perceive upskilling and training as a benefit [5], employers should invest in it to support workers' success and highlight this perk when hiring.
At D&R Custom Steel, Dan Engelage says they focus on recent college graduates and apprentices eager to learn the trade. Hired as labourers, new employees have three to six months to demonstrate capability and that so-important work ethic. Then the company guides and supports them in a specific trade.
“You can always train someone to do the technical requirements,” agrees Kevin Sun, COO of Maneva AI. “I would much rather hire a good person than a good technical person.”
Ensure the right cultural fit
To ensure that a prospective employee will work well in their organization, manufacturers want to know that an individual’s characteristics, expectations, and behaviour will align with their organization’s values and work style.
Hali Van Vliet, the lead of MNP’s Ontario HR consulting for private enterprise practice, suggests employers consider cultural fit, including the individuals and teams a prospective employee will be working with and the environment they will be working in. Is this person compatible with the company's culture, goals, and values? With the workplace location and environment? With its people and processes?
She suggests giving prospective employees lots of information about these issues and asking them questions to determine their comfort level.
Mary Larson, National Lead of Strategy Consulting Practice for MNP, also suggests that owners and management teams regularly talk with employees about the company culture. She says organizations need to purposefully build and preserve their culture; a big part of that is repeatedly articulating to employees what they want the workplace to represent.
Be an inclusive employer
“Equity, diversity and inclusion can be a big advantage to employers,” says Larson.
For example, Canadian Manufacturers and Exporters say women represent 48 percent of the labour force in this country but only 29 percent of the manufacturing workforce. This represents a significant potential pool of employees.
Five suggestions to attract women toward working in manufacturing
- More female role models to inspire and encourage young women
- Access to modern manufacturing facilities to help change the perception of manufacturing
- Encourage young girls to pursue an education in STEM and/or the skilled trades
- More inclusive workplaces
- Creative ways to improve work-life balance for employees
(Untapped Potential, Canadian Manufacturers and Exporters)
To expand the pool of prospects and create an inclusive workplace, Larson also suggests that employers consider workers with physical, learning or communication disabilities. “Most accommodations don’t cost much, and employees with disabilities often bring unique perspectives and skills to the team, fostering a positive and collaborative work environment for everyone.”
She recommends sourcing employee prospects from college and university immigrant communities by establishing relationships with schools with diverse student bodies. Manufacturers gain access to a pipeline of newcomer talent, while hiring and training immigrants can help to build a workforce that reflects the markets a company serves.
Amping up performance
Manufacturers continually focus on improving their capabilities and performance. They know that what got them here today will not be what’s needed tomorrow.
To stay profitable and competitive, these businesses must optimize the effectiveness and efficiency of their manufacturing operation by using resources appropriately, minimizing waste and inefficiencies, and optimizing the manufacturing process.
This includes keeping employees engaged with their work and motivated to achieve targets. Chris Sweeny, Vice President of Swenco, also raises the issue of an aging management team. “We have several employees on our team who have over 40 years with the company. So how do we effectively make use of that organizational knowledge?”
Leaders must focus on productivity and growth
MNP’s Hali Van Vliet points out the need for effective supervisors and managers at a high level to enable owners to focus on the health and growth of their company. “We see some owners spending too much time dealing with performance issues when they should focus on productivity and growing the business.”
Tony Aziz, CEO of Amir Quality Meats, relates the transformation of the company’s management team. “I was very much involved in day-to-day operations a couple of years ago. Since then, we’ve introduced new ERP systems, new processes and procedures. And we’ve brought in a productive layer of management: plant manager, director of HR, supervisors, team leaders, line leaders. This makes a huge difference in our productivity. Now we’re more profitable, and having a strong team helps us focus on what we need to focus on.”
MNP’s National Value Creation Leader, Hussam Malek, suggests that “when it comes to productivity improvement, the number one impact is made through active management by management.”
Active management is a structured approach to managing and improving performance. This involves developing goals and strategies focused on improving team productivity by promoting engagement and trust, planning and tracking daily performance, motivating through feedback and measuring progress by comparing performance results with goals [6].
Being visible and approachable is another important component of active management. Leaders who walk the production floor daily, like Marcel Pantano of MTD Metro Tool and Die, can significantly impact performance. This simple strategy can strengthen communication, identify problems and opportunities, build morale, and improve employee performance.
Pantano believes it’s important to communicate with all employees. “I walk the floor every morning, look at what’s going on, and talk to everyone.”
The same approach works for Nafisa Madhani, Director of People, Culture & Safety at Steelcon. “We’re always on the floor. We share with employees where we’re going as an organization and the goals of the day.” She says that before management became so visible and vocal, “we weren’t really telling people what was expected of them. So, they thought they were doing well. They had no idea what the expectations were. Now they know. Every day.”
Attentive, caring supervision is vital
In many manufacturing businesses, there can be a gap between the goals of the owner or senior management team and production performance. Passive supervision is sometimes the cause.
Supervisors need to connect with employees and encourage continuous improvement to achieve goals. Dan Engelage, president of D&R Custom Steel, says employees “want to see that you’re on their side. Then they’re willing to support you.” This requires active supervision on the floor — checking progress, answering questions, solving problems and conducting quality control checks.
A global survey reveals that young employees prefer empathetic managers (38%) to experienced managers (9%) when it comes to the qualities of their managers. For these workers, honesty and integrity are five times more important than experience. This is followed closely by empathy and caring about team members, plus empowering and motivating.
Madhani says that capable supervision and leadership by example help to reinforce a strong work ethic at the company. Supervisors get to know all the people they manage, so that ‘people problems’ don’t come up as a surprise. They ask questions so they know that someone’s father is ill or their spouse is off work. Leaders at Steelcon gather once a week to “learn something new, discuss what’s happening and how we can do better.”
Performance feedback needs to be frequent
Madhani finds that daily performance feedback is more productive than annual reviews. “We give feedback every day so that at the end of the year, you’re not talking about how workers can improve because they already know how to do that. Instead, we’re talking about what they want to do next.”
One company has a daily operations review — looking at performance metrics on every production line. The management team also holds weekly and monthly planning meetings to ensure targets are being met.
A variety of regular employee communication channels
It’s understood that effective workplace communication can increase employee morale, engagement, collaboration, and productivity. But what exactly is effective workplace communication?
First, “People want to know where they fit into the big picture,” says Malek. This requires ensuring that workers at every level understand how their individual actions impact the company's success. When change is happening, they need to know what has to change and why and how their efforts contribute to the company's growth and success.
Regarding how manufacturers communicate big and small issues, employee committees, roundtables, and company-wide meetings are popular.
One CEO holds a company-wide meeting every month. They discuss good and bad news, what’s new and changing and where the company is heading.
The management team of another company holds toolbox talks and safety talks with employees, sharing everything from new people and products to staying safe on the job.
MNP’s Mary Larson says that discussions about safety are particularly well-liked by employees because they demonstrate that the company cares about their well-being.
All of the manufacturers agree that acting on feedback is key when sharing information and asking for input. Sometimes, the request can be very small — like asking for a fridge to chill beverages. While some issues may seem trivial to management, they can be very important to employees.
Well-structured employee roundtables provide valuable feedback
Roundtable participants concur that employee roundtables, when carefully implemented, are valuable ways for employers to hear about their workforce's concerns and ideas. These manufacturers offer the following suggestions to ensure that roundtables are effective.
- Establish a vision and rules for what can be discussed at the roundtables. MNP’s Hali Van Vliet suggests clarifying expectations. “It’s important to be clear as to what your company can and can’t do.”
- The right facilitator is crucial to ensure the discussion is productive rather than destructive. One company has an HR director facilitate the roundtables. To help employees feel comfortable during these discussions, this individual is on the plant floor every day, connecting with workers and reinforcing relationships.
- Ensure participants understand these meetings are a safe environment where they can ask questions, state opinions, and share ideas without judgement. Van Vliet says everyone should understand that “people are safe, ideas are not.”
- Act on the feedback received.
Succession strategy helps to transition worker generations
MNP’s Mary Larson reminds manufacturers of the importance of succession planning in transitioning to a new generation of management and supervisory teams. “You need to set up a way for succession to happen. How are you going to pass along knowledge and skills? How will you integrate new people and experiences?”
An effective succession strategy requires thinking through and taking action, such as:
- Identifying key positions
- Considering potential successors
- Determining the related experience and skills needed
- Establishing workable steps and a timeline [7]
Data-driven decision-making matters
For many owners of manufacturing companies, experience and gut feeling have traditionally driven business decisions.
Today, with the pace and scope of business change accelerating, data-driven decision making has quickly become essential for making decisions based on objective, quantifiable information.
At the same time, unlocking the innovation potential of data-driven decision making requires moving from a top-down decision cascade to decentralization. This approach empowers individuals and teams to leverage their expertise to solve their problems.
Decentralization enhances business agility by encouraging data-driven decisions tailored to specific needs. This approach also builds a culture of innovation and continuous improvement [8].
Jason Lee, a Partner with MNP’s digital services team, points out that data-driven decision making is also important for management teams and succession. “When you have to hand over responsibilities to another person, they don’t have the same experience as you have, so they need reliable data to make good decisions, maybe even better decisions, because they’re based on facts rather than emotion or intuition.”
Leveraging Gen Zs effectively
Mary Larson of MNP points out the significance of Generation Z in the face of Canada’s aging workforce. Since Gen Z is a smaller cohort than millennials and baby boomers, a natural reduction in the total labour pool is occurring [9].
Looking at Canada’s agricultural sector as an example, a report by RBC indicates that by 2033, 40 percent of Canadian farm operators will retire and a shortfall of 24,000 general farm, nursery, and greenhouse workers will emerge.
So, manufacturers need Gen Z workers, but they sometimes struggle to integrate them easily into their existing workforce.
Roundtable participants mention several areas where Gen Z’s expectations differ from those of their traditional workforce. These include valuing their personal time more than previous generations, such as wanting extended vacation or sabbatical time and shorter workdays or weeks. And they want to have their voices heard.
Who is Gen Z, the generation shaping our future workforce?
- Born between 1997 and 2012
- Comprise more than 24 percent of the global workforce
- Projected to hold almost all entry-level jobs by 2030
- Demonstrate distinct characteristics: digital native, open-minded, ethical, entrepreneurial, quick at learning, good at multi-tasking, short attention span
- Hold unique work values: work-life balance, remuneration, job security, corporate social responsibility
- Workplace preferences: jobs that offer work-life balance and employment security, employers that offer training and development, a culture that values individuality, and equality, diversity, and inclusion
- Expected to reshape the future workplace
(FUTURE WORKFORCE PERSPECTIVES SURVEY, Work-Learn Institute, University of Waterloo)
Shorter work week? Absolutely!
Gen Zs want flexibility in their work schedule. In fact, when choosing a job, they rank flexibility as significantly more important (35%) than salary (4%).
A shorter work week is another popular request of all workers. A recent study found that 93 percent of Canadians are interested in a four-day work week.
Two manufacturers found the same reaction when they surveyed their employees. Both companies instituted variations of four-day work weeks for most of their workforce. One offered team core hours of 9 a.m. to 3 p.m. and flexibility to cover night shifts either before or after those hours.
Another has a night shift that works four days a week. “Every weekend is a long weekend and on long weekends, they have an extra day. People love it.”
Provide a sense of belonging at work
MNP’s Hussam Malek points out that previous generations of workers found spirituality at church, community in their neighbourhood, connections through friends and family, and accomplishments at work.
However, pandemic-influenced, tech-raised Gen Z employees haven’t had the same opportunities to establish in-person work relationships over time. This is why many of these young workers often seek all four elements — work, spirituality, community, connections, and accomplishments — from their workplace.
Malek suggests that employers consider how to offer these experiences. For example, can you provide a spiritually enriched workplace that shows collaboration, mutual respect, and a shared sense of purpose? Do you provide a culture with a strong sense of community? How does your company support the local community?
Bring on the tech
Gen Z was born into a digital era and is comfortable with technology. According to CFO magazine , 70 percent of Gen Z employees would leave their jobs for better technology.
They are drawn to workplaces that value innovation, encourage creative problem-solving and leverage technology to streamline processes and gain competitive advantage [10].
Marcel Pantano, CEO of MTD Metro Tool and Die, says two of the company’s Gen Z employees “jumped into our new ERP system last year — without anyone asking them to do it. They quickly became the experts on the system.” Their eagerness and aptitude earned them a bonus, a raise and company-wide recognition.
For Jim Kranendonk, President of Curtainsider, his company invests in new technology “to make the operation more efficient but also to invest in our people. The younger generation loves new equipment.”
Another owner agrees, offering that younger workers look to technology to make their work easier.
Address worker preferences for learning
Gen Z workers prefer a dynamic and fast working environment [11]. “As a small company, our employees cross-train in different areas,” says Florind Molabecirovic, logistics coordinator at Swenco. “They don’t have time to get tired of a role.”
According to eLearning solution provider Moodle, the following kinds of workplace learning appeal to Gen Z, the generation that has grown up online:
- Multiple delivery methods and different types of training
- Quick bits of information delivered via bite-sized learning modules that can be completed in short bursts
- Image and video-based learning materials
- Soft skills training such as communication, teamwork, problem-solving
- Gamification — gaming strategies that enhance engagement with competitions, personal challenges, rewards and recognition
- Training modules available via mobile devices to enable them to learn at their own pace
- Mental health topics and resources
- Personalized learning plans that set them up for success
MNP's Hussam Malek points out that when employers cater to Gen Z's learning preferences, the result is a more content, more productive workforce that is motivated to achieve their employer's business goals.
Looking for feedback, but not conflict
Employees who feel heard and valued tend to be more dedicated to their work. This results in greater productivity, job satisfaction, and lower turnover.
Gen Zs want performance feedback but it's important to present it productively. The youngest working generation considers “any sort of poor feedback as conflict,” says Malek. This requires being solutions-oriented rather than critical and asking employees to assist in suggesting these solutions.
Gen Z workers also want constructive advice and recommendations for improvement that demonstrate their employer is invested in their success. Malek says it's important to consider the employee's personal goals, know where they want to go, and offer ways to help them get there.
Strengths of Gen Z workers
- They’re smart. When it comes to learning, they’re lightning fast.
- They are very efficient and get their jobs done.
- They know exactly what they want.
- They challenge managers to think outside the box and adapt. So, they help to build managers with new skill sets.
- Ultimately, we’re trying to get to the next level of not having to work so hard. Gen Z will take us there — the next level of where human society needs to be.
[2] https://www.randstad.ca/employers/workplace-insights/job-market-in-canada/trends-manufacturing-jobs/
[3] https://www.talentcanada.ca/flexibility-far-more-important-than-salary-for-gen-z-global-survey/
[4] https://www.rapidenterprises.ca/advantages-of-manufacturing-employee-training/
[6] https://www.hracuity.com/blog/proactive-management/
[7] https://sequoialegal.com/blog/succession-planning-in-manufacturing-business
[8] https://blog.cads.ai/intuition-vs-data-driven-decision-making/
[9] https://www.mnp.ca/en/insights/directory/whats-driving-the-labour-shortage-for-canadian-business
[10] https://www.linkedin.com/pulse/what-gen-z-seeks-ideal-employer-thedeskhk-8xrtc
[11] https://www.shiftelearning.com/blog/gen-z-employees-training
Table of contents
- Introduction
- Overview of our manufacturing industry and key trends
- Biggest challenges — and best remedies
- Finding good employees
- Amping up performance
- Leveraging Gen Zs effectively
- What manufacturers have to say about Canada’s declining productivity
- Discomfort with the Big AI unknown
- Choosing the right tech for the right results