What can businesses do while labor costs rise amidst an existing labor shortage?Article published on Jun 15, 2022
The 2020's have seen businesses facing one challenge after another with a global pandemic creating a ripple of consequences we may observe for years to come. It's near impossible to pinpoint causes in these kinds of situations and this post won't speculate on causation, but one recent unprecedented challenge modern businesses are facing is the spike in labor costs.
According to a recent report in Bloomberg titled "Employment Costs Surge Most Ever, Stoking U.S. Inflation Concern", labor costs have spiked 4.5% up from last year, representing the highest increase in more than 20 years. The article goes on to say that wages and salaries for civilian workers specifically also rose 4.7% from a year earlier, (which is also the highest increase on record.)
While our generation's businesses may be getting used to "unprecedented conditions", rising labor costs have a huge impact on operations from top to bottom, just like any other piece of this incredibly complex puzzle. Add this to the existing supply chain issues and labor shortage, and the puzzle becomes more complicated still.
What are businesses doing to meet labor challenges?
Some companies are trying to allow remote work without sacrificing their ability to monitor employee behavior with new employee-monitoring software. Still others are looking to automation, finding ways for machines to do what employees once did.
Manual labor industries can't always lean on these strategies and must get creative in their approach to the existing labor challenges. For instance Tyson's newest effort includes paying for its employees to pursue associates, undergraduate, and masters degrees, covering courses from 35 Universities. According to Business Insider's report on this effort, Tyson's Executive Vice President John R Tyson reasons that "Providing education benefits will continue to lay a foundation for personal and career growth for our team members".
This are all big changes which require an immense amount of planning and intentionality. But what are some simple changes a business could make today to cut costs and keep employees in mind.
Can manufacturing industries make their employees jobs easier?
Is it possible for employers to ease up on labor costs by making their employees jobs easier or less stressful?
One way to look at this is to make the physical labor itself easier by talking with employees, examining their tasks, and looking for the opportunities to meet their specific requests. Our customers for example may decide to order barricades in a box for easier assembly and transport. Or perhaps this could be as simple as allowing assembly workers to sit when they're tired, (as famously discussed by Amazon workers on social media.)
While articles like this one titled "How to make your manufacturing jobs more attractive" outline common sense ideas like increasing job flexibility, adding mentorship programs, and incentive programs, there is nothing more valuable than communicating directly with your employees. Your employees will know what simple changes could make a difference in their day to day obligations.