During the pandemic's peak, manufacturers had trouble finding enough workers, making it challenging to keep up with production and get the products outdoors. As the U.S. supply chain improves, manufacturers must find intelligent strategies to hire and keep good workers in a changing job market.
Although the number of unfilled jobs has decreased since April 2022, CEOs say hiring has become more accessible, attracting and keeping skilled workers is still a big concern for most manufacturers.
Creative Approaches of Manufacturers
Companies are adopting creative approaches to address the ongoing labor issue. GE Appliances offers part-time manufacturing jobs and condensed schedules, allowing workers three days off each week. Companies like Eaton Corp. and Union Pacific Corp. are implementing second-chance hiring programs to tap into the pool of potential workers with criminal records. Siemens AG has established a comprehensive internal workforce training curriculum.
Lack of Child Support Options
The lack of childcare options in rural communities is one major obstacle to building a more vital manufacturing workforce, especially one that includes women, where many industrial companies are located. According to a Center for Manufacturing Research survey, childcare support is the second-largest workplace challenge for female factory employees after flexibility. However, only about 6% of manufacturing company executives reported taking steps to provide childcare support to address hiring difficulties, while the same percentage had done nothing about it. The Biden administration recognized this issue and included access to affordable and high-quality child care as one of the qualifying criteria for the Chips Act's $39 billion direct manufacturing incentives.
Nucor Envisions Extending On-site Childcare
In October, Nucor started building a new $3.1 billion steel sheet mill in West Virginia, which is set to employ 800 full-time workers. The plant is in the Apple Grove community of Mason County, an area with limited lunch spots and childcare centers. According to Nucor CEO Leon Topalian, parents nationwide face tough decisions about affording childcare to return to work. He expressed surprise at employees in Alabama paying up to $2,500 monthly for childcare, equating it to a mortgage payment. To address this obstacle, Nucor plans to construct a childcare facility at its new West Virginia plant.
The company intends to collaborate with a third-party operator for the childcare facility. According to John Farris, Nucor Steel West Virginia's Vice President and General Manager, the company excels at steelmaking but recognizes its limitations in managing a childcare facility. They aim to ensure it becomes a high-quality facility, inspiring employee confidence. While the details are still being finalized, Nucor aims to offer competitive costs for employees and maintain cost-effectiveness for the company. Building on the West Virginia experience, Nucor envisions extending on-site childcare to more facilities in the future, driven by the demand expressed by various divisions within the company.
A "Great Recruiting" Tool
SEW-Eurodrive, a German automation equipment manufacturer with a plant in Lyman, South Carolina, is collaborating with the local school district and the nonprofit Middle Tyger Community Center to enhance childcare options. On another front, Norfolk Southern Corp. has teamed up with Bright Horizons Family Solutions Inc. to provide on-site daycare services at its Atlanta headquarters. In the metro Atlanta area, the average monthly tuition for full-time enrollment in the infant-to-preschool age group is between $1,700 and $2,000. Norfolk Southern helps its employees by subsidizing these costs, reducing the bill to approximately $1,100 to $1,300, as stated by Thomas Crosson, the company's Senior Director of Strategic Communications. While considering on-site daycare for other locations based on demand, CEO Alan Shaw noted that, as a railroad, most of their employees are mobile, with the headquarters being the primary staffing hub. He emphasized the on-site daycare as a valuable recruitment tool, attracting individuals who might not have considered working for Norfolk Southern or in an office environment.
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Trane's Pilot Childcare Projects
Like many companies, Trane faced increased employee turnover during the pandemic, with workers opting for more flexible jobs like being Uber drivers or leaving the workforce entirely. This coincided with Trane becoming an independent heating and cooling specialist after separating from its industrial businesses. Despite the lack of a typical launch celebration due to the pandemic, this transition allowed Trane to define its identity intentionally, according to Mairéad Magner, Trane's Chief Human Resources Officer.
Trane initiated listening sessions at its manufacturing plants to understand worker preferences better 18 months ago. The recurring theme was the need for child care, a crucial factor as many were leaving jobs due to a lack of childcare or its high cost. In August, Trane launched pilot childcare projects in Hastings, Nebraska, and Columbia, South Carolina, recognizing the importance of reliable childcare. The program addresses affordability and accessibility challenges by offering dependent care flexible spending accounts funded by the company based on the number and ages of employees' children. Additionally, Trane partnered with Upwards, a childcare concierge service, to connect employees with existing providers, educate parents on government programs, and support the creation of new facilities in areas lacking childcare options. Upwards focuses on smaller providers, offering flexibility for those with non-traditional work hours, addressing gaps in childcare availability, working to set up new licensed facilities, or assisting existing providers in expanding or relocating to underserved communities.
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