For the third consecutive year, we are pleased to be one of the community partners of a survey of Northeast Ohio manufacturers. This year, over 600 manufacturers offered feedback on topics including the state of the economy, hiring trends, innovation and technology. Additionally, Marcum collaborated with Hofstra University to poll CEOs of national middle market companies to ask similar questions, regardless of their industries.
As a preview to the full report we will release in the coming weeks, we wanted to provide initial insights on how our regional responses compared with national survey responses. One important note: the survey was taken before the current coronavirus (COVID-19) crisis; therefore, responses regarding the economy do not reflect current market conditions.
|Prospective economic outlook||72% are optimistic||96% are optimistic|
|Top investment priority||Talent recruitment/retention (63%)||Technology (68%)|
|Third highest investment priority||Cutting operational costs (30%)||Talent recruitment/retention (45%)|
|Will you increase investment in technology?||Less than 50%||68%|
I want to highlight the top callout because survey respondents are generally optimistic about the economy as a whole, which will enable companies to look at investment strategies to make their businesses more competitive. Optimism about the economy generally allows a company to focus on strategies rather than short-term outcomes.
Locally, our survey respondents are very positive about the recruitment and retention of talent as an investment strategy that can impact their business. This metric aligns well with the 60% of local/regional survey respondents who noted that workforce shortage is hampering their growth.
This challenge has been ever-present in this survey year over year, so the question begs to be asked, how can innovation or technology help address the shortage? Regionally only 33% of respondents are actively innovating their recruiting, hiring and retention programs and approaches. When this critical factor is coupled with the 15% of the existing regional workforce who will retire in the next three years, the day of reckoning is coming. Additionally, the hiring, recruitment and retention challenges are an even larger burden in smaller manufacturing companies, where human resources and recruiting are not dedicated functions.
What now? The solution is innovation, whether that means innovating the hiring and onboarding processes, aligning with feeder sources of talent (technical colleges, co-ops, internships or apprenticeships) or investing in industry 4.0 technologies (e.g. automation, Industrial Internet of Things and even augmented reality). The latter would help to increase worker efficiency and make the organization far more attractive to the talent pool, which enables companies to be the employer of choice. I believe the hurdle is a mindset evident in the survey responses to the “top investment priority above.” Innovation is not the top priority, as only 24% of the local/regional survey respondents listed it as a top priority, 40% points lower than the national survey, and it is the game-changer. The local and regional manufacturing community has a large gap to make up to leverage technology and innovation in how they conduct business, recruit and retain employees and increase efficiency in their operations.
Stay tuned for upcoming blogs on innovation as well as our survey report, which can be downloaded in the coming weeks. Until then, if you have questions relating to the survey preview so far, contact Jon at 216-242-0820 or email Jon.