Why Manufacturing Leaders Must Address Dropping Morale

The manufacturing industry has seen an incredible boom and expansion in recent years—great for the economy and great for frontline factory workers.

Since the Inflation Reduction Act (IRA) was signed into law on August 16, 2022, 305 new projects have been announced in 41 states, with investments of $123 billion, creating new 105,454 jobs, as of writing. Annual construction spending in manufacturing is $201 billion, representing a 70% year-over-year increase.

Much of this growth can be attributed to the 2021 Infrastructure Investment and Jobs Act (IIJA), the 2022 Inflation Reduction Act (IRA) and the 2022 CHIPS and Science Act (CHIPS), which “represent the largest U.S. commitment to industrial policy since the Cold War."

However, all this growth will be unsustainable without an engaged and skilled workforce. About 75% of manufacturing leaders say their biggest challenge today is the inability to attract and retain employees. Why can't they attract and retain employees? One of the biggest reasons is dropping morale.

My company, Epicor, recently surveyed 600 frontline factory workers about their successes and challenges on the job for our second annual "Voice of the Essential Manufacturing Worker." They shared that manufacturing workers are slowly losing morale. Only 45% of respondents say morale is high at their company—a drop from 52% in 2023. And low morale increased from 7% to 16%.

To address this growing issue, we briefly mentioned some tips in the report, and I’ll elaborate on those points below with five ways manufacturing leaders can improve morale, engagement and retention in your frontline factory workers.

1. Improve pay or bonus structure.

Pay is generally a top request on how to increase morale and retention, as hard-working employees want to be fairly compensated and valued for the time and skills they bring to their company. Improving pay or bonuses is a top suggestion here—and manufacturing leaders may need to look at their financial structure to accomplish that.

2. Offer flexible work schedules.

Outside of pay, being able to have a flexible work schedule has become a priority for employees since the pandemic across many industries.

Of course, frontline factory workers can't necessarily work from home, but those we surveyed aren't looking for radical autonomy in their schedules. Most simply want flexible start and end times, which may be a simple way for manufacturing leaders to increase happiness and morale. Ultimately, according to a 2021 Gartner report, 43% of workers say flexible work hours are the reason for their greater productivity.

3. Listen to employees and take action on their concerns.

Frontline workers want to feel valued for what they do, and their contributions to the company, yet many don't feel like they're being heard at work. Leaders who want to retain their workforce should make it a priority to listen to frontline workers who can raise awareness on process efficiency or safety issues.

Make sure to take action on that feedback to show that their concerns and needs are being taken seriously. Seventy-three percent of workers who feel like their voice is heard at work say that leads to them being empowered to do their best work, according to 2017 Salesforce research.

4. Address bad supervisor behavior.

There are great supervisors and bad supervisors in every organization. However, bad supervisors who demonstrate poor communication, favoritism and lack of empathy can tank morale and lead to increased turnover.

Manufacturing leaders should identify these leaders and invest in leadership training to grow in their roles, improve their management skills and better lead their teams.

5. Invest in upskilling, technology and sustainability.

One way to improve morale, engagement and retention is by providing your workers with the tools and training they need. This includes offering upskilling opportunities so that they can be masters of new technology and grow their careers—and 71% of upskilled workers said their overall satisfaction with their jobs has increased.

Considering that over half of our survey respondents would take a pay cut to work for a more sustainable factory, leaders should prioritize sustainability efforts as well to retain workers. Finally, invest in new technology so that your workers see you keeping up with the quickly evolving tech world they see around them every day.

Prioritize Engagement Today And For The Future

Investments in the manufacturing industry are only going to continue, but companies will only be able to scale and make an impact if they’re bolstered by engaged, satisfied and skilled workers.

Give them the tools and technology to be as productive as they can, listen to their concerns and ensure that they’re led by empathic and encouraging leaders, and you’ll be set for the future of manufacturing.