It’s no secret that the manufacturing industry has been impacted by COVID-19 (along with most every other industry). But each type of manufacturing has experienced the impacts differently.
According to an average of results from five Federal Reserve District Manufacturing Surveys*, U.S. manufacturing firms have significantly added to their payrolls in recent months. However, despite the continued trend in overtime spending, the survey shows that overtime has decreased to 3.8 hours of overtime per worker per week through September 2020 from 4.5 during that same time period in 2019.
The industries reporting the highest use of overtime in 2020 are petroleum and coal products (9.3 hours), primary metal manufacturing (5.4), nonmetallic mineral products (4.7), and paper and paper products (4.6). Due to lower business activity related to the pandemic, 16 of the 18 manufacturing industries reported lower use of overtime hours in 2020 versus 2019. Not surprisingly, the two manufacturing industries showing a slight increase in 2020 overtime hours are computer and electronics products and textile product mills.
What does this mean for staffing and workforce management?
For a staffing strategy, it can be difficult to pinpoint when you may need to scale your workforce up or scale it down. As evidenced by overtime hours, it can also be expensive to scale up skilled talent. With the impact of COVID-19 and its volatility, many manufacturing firms are turning to contingent labor to allow easier management of variable workloads.
For instance, if you are in an industry whose business activity decreased because of COVID-19, a contingent staffing model would allow for quick release of nonessential workforce. This model would save administrative time and money and maintain current employee’s morale, but not laying off or letting go essential workers.
If you are in an industry that needs to ramp up due to COVID-19, contingent labor would allow you to not only add skilled labor, but also the appropriate types of labor you need, where and when you need them without the burden of added costs of full-time employees. Plus, by adding skilled talent and avoiding overtime expenses, you lighten the load on your current workforce who may be at risk for burnout.
COVID-19 has certainly impacted manufacturing and in ways no one could have predicted. When it comes to a staffing strategy, it is important to always maintain your ability to be nimble to adjust to market and economic conditions. Partnering with a reputable staffing company can help ensure you have the right strategy in place to operate at peak performance.