ML Journal

Manufacturers can apply a three-step strategy to recruit and retain a diverse pool of talent that will enable them to be and remain competitive.

 

TAKEAWAYS:
● To attract diverse talent, manufacturers need to develop an effective and intentional talent sourcing strategy.
● Trade schools, college campus events, women’s associations, veterans’ groups, and high school programs are potential talent sources.
● A strategy for creating a diverse and inclusive workforce must embrace diversity of personnel and diversity of thought.  

 

As manufacturing becomes more digital and as industrial businesses find themselves in a fiercer battle for talent with tech companies and other sectors, building a diverse employee base is essential. Diversity is not just paramount when it comes to skill sets. Having a more diverse workforce in terms of racial, gender, educational, generational, and cultural backgrounds can allow companies to tap into new perspectives and ideas, giving them a competitive edge to drive innovation. Being intentional and strategic about attracting and engaging a diverse workforce can better equip companies to scale the business and increase profitability.

The manufacturing industry has historically suffered from a lack of diversity, especially among women and minorities, who are underrepresented in both entry-level and leadership roles. As a result, businesses miss out on a huge pool of potential talent that could bring new ideas, creativity, and problem-solving abilities to the table. And in the current labor market, manufacturers cannot afford to miss out on appealing to a broader talent pool.

There are signs that companies are making changes, however. According to the RSM US Middle Market Business Index special report on workforce published in January 2024, 41 percent of middle market firms indicated they are focused on recruiting a more diverse base of employees—that is, minority, disabled, and older workers. (The RSM US Middle Market Business Index survey data in the fourth quarter of 2023 was derived from a panel of 1,500 executives recruited by The Harris Poll using a sample supplied by Dun & Bradstreet.)

“Being intentional and strategic about attracting and engaging a diverse workforce can better equip companies to scale the business and increase profitability.”

 

“In a tight labor market, businesses continue to optimize workforce strategies through human capital management,” the report noted. “Those include recruitment and retention tactics—such as remote or hybrid work, wage increases and other compensation offerings—talent experience initiatives that align with business objectives, and assessments of their physical workspaces.”

Three key steps can help companies approach these recruitment and retention tactics while prioritizing diversity.

Step 1: Develop a Sourcing Strategy

For most manufacturers, defining their talent pools, their brand as an employer, and overall employee value proposition will likely be the place to start in developing an intentional talent sourcing strategy. Human resources teams should collaborate with other functions of the business—such as operations, production, finance, and marketing—to identify where and how the company can reach out to diverse candidates. Potential sources include trade schools, high school programs, campus events, women’s associations, veterans’ groups, and others.

Employee value proposition will be a key part of the sourcing strategy. Companies need to offer a compelling story about why someone would want to join their team and what makes them stand out from other employers in the industry. Manufacturers will also need to align their sourcing strategies with their workforce plan—essentially by creating a road map of current and future talent needs based on business goals.

In the current labor market, businesses also need to understand the value of transparency for job seekers. Considering the prevalence of platforms and online communities where current and former employees can share salary information and overall workplace reviews, manufacturers that proactively engage in these forums might find opportunities to extend their talent pool reach and build their brand.

Step 2: Implement Systems to Enable Those Talent Pools

Technology is another central element of a successful strategy to build a diverse workforce. Companies need to have systems and tools in place that enable them to connect with and recruit efficiently and effectively from a variety of talent pools.

Applicant tracking system software, for instance, can automate and streamline parts of the recruiting process and help companies push their listing through a wider variety of platforms. Such systems can also help collect and screen applications, schedule and conduct interviews, send offer letters, and track other data. Tracking systems and other HR tools enabled by automation and/or artificial intelligence don’t just help the employer, they can also improve the candidate experience overall.

Applicant tracking systems and other automation tools for job listings can also make it easier for businesses to use more inclusive language in job descriptions and other communications. This can be critical in helping a broader array of potential employees feel welcome and understood.

Step 3: Educate your Workforce on how to Recruit

Companies need to educate their existing teams—especially hiring managers—on how to recruit a diverse range of candidates and make them feel welcome and valued as new hires or potential hires. This education might come in the form of training and guidance on unconscious bias, cultural awareness, compliance, interviewing skills, and other topics.

Hiring managers and employees throughout the business also need to feel empowered to be ambassadors of the brand and culture from a workplace perspective. Organizations might encourage employees to share their on-the-job experiences and stories with potential candidates.

“Companies need to offer a compelling story about why someone would want to join their team and what makes them stand out from other employers in the industry.”

 

Employee involvement in attracting a more diverse workforce might also come in the form of candidate referrals, employee participation in recruitment events, and mentorship programs. On the education front, leadership needs to train teams on how best to create a culture of inclusion and retain diverse talent.

It’s not just employee diversity that is becoming more important. Other forms of diversity are imperative.

“Diversity of thought is important at every level of the business, including the board of directors,” as noted in “Diversity among middle market manufacturers: A pivotal talent priority,” another RSM article published in March 2024. “In 2021, Nasdaq introduced rules requiring companies listed on the exchange to disclose board diversity, and the U.S. Securities and Exchange Commission followed suit. Such standards for public companies can often become the de facto standard for private companies, too.”

A Workforce for the Future

By following these three steps, manufacturers can start building a more diverse and inclusive workforce that can bring new skills, perspectives, and value, all of which can ultimately lead to a more robust bottom line. Companies need to be intentional and strategic about this plan; those that are not proactive about building a multifaceted approach to recruitment and retention will be at risk of falling behind.  M

About the authors:

 

Kendra Blacksher is a partner and industrials senior analyst at RSM US LLP.

 

 

 

Marni Rozen is a principal at RSM US LLP.