By Mike Domingos
Almost every manufacturing executive I know says that today’s rapidly changing landscape is putting pressure on their business. Finding and keeping good people, increasing efficiency and speed to market, gaining a competitive advantage through innovation … these are not new concerns, and yet, they feel more challenging than ever.
To put some data behind the conversations we’re having, we recently sponsored a survey of over 500 manufacturing executives about their biggest concerns and opportunities.
Take talent. More than a third of manufacturing executives say their greatest challenge is recruiting and retaining employees with the right skills. Forty-two percent think recruiting new employees with the prerequisites for on-the-job training will be their biggest talent hurdle in the next three years, while 38% say they expect their largest talent hurdle in that time frame to be a lack of candidates who are interested in working in manufacturing.
Skill shortages underlie other business challenges too; for example, many executives say that retraining existing employees (39%) or finding people with specialized skill sets (32%) is a concern when it comes to implementing new technology.
Innovation is another key issue.
The survey showed that leading manufacturers are focused on new and developing technologies. Specifically, 41% of industry leaders said they expect cloud and mobile technology to add value to their firm over the next three years. Meanwhile, leaders expect the Internet of Things (39%) and cloud and mobile technology / computing advancements (39%) to add value over the same time frame.
One asset that many employers overlook in these moments is their benefits program. Benefits are a business tool, as well as a valuable component of employee engagement and loyalty. By more closely aligning your benefits programs, including retirement plans, with your business objectives, you have an opportunity to turn it into a strategic advantage.
Your employees aren’t all the same. They each have specific needs. They also do different jobs and hold different value to your organization. Your retirement benefits are more important to certain groups of employees than others. So why offer uniform retirement benefits to all your employees?
The short answer is you don’t have to. You can design your retirement plan strategically to provide enhanced benefits to highly-valued employees you want to retain or recruit. This will help you to provide attractive retirement benefits that may outshine those offered by competitors—not just manufacturers, but also employers in other industries that may be seeking similar talent, such as technology professionals.
Plan design changes may also allow you to improve plan efficiency while introducing behavior incentives in order to drive better outcomes for employees without necessarily increasing the budget. The key to this is avoiding the one-size-fits-all approach when designing your retirement plan, and instead providing benefits to employees based on what they need or desire most.
We know that an inefficient retirement plan is an expensive one. Many plans we examine for the first time have inefficiencies that can be identified and quantified. Eliminating these inefficiencies can help you get the most out of your benefits spend. You may be able to spend less money on your company’s retirement plan while still driving the same or better outcomes for employees. Any savings can then be reallocated to other business initiatives, such as investing in innovation.
In his role as vice president, Corporate Distribution and Strategy within Prudential Retirement, Mike Domingos works with corporate manufacturing clients regularly to help solve their retirement and business challenges. Prudential Retirement is a business unit of Prudential Financial, Inc. (NYSE: PRU), and a leading provider of defined contribution, defined benefit, nonqualified deferred compensation plan administration, and institutional investment and risk management services.
For more information about the pressing challenges facing the manufacturing sector or the survey results, visit www.Manufacturing.PrudentialRetirement.com