How to Overcome HR Challenges in the Manufacturing Industry

HR Challenges in the Manufacturing Industry

Although keeping and acquiring top talent is a rapidly growing concern, HR challenges in the manufacturing industry go far beyond that. To name a few more, some common challenges can include:

• Not enough time
• Time-consuming paperwork
• Uncertainty about laws and guidelines
• Lack of knowledge about policies for employees
• Not enough financial resources to acquire attractive employee benefits

Moreover, many small to mid-sized businesses think they can take on all HR administration themselves, which can only cause more problems. Although you may realize how much time is dedicated to payroll, benefits, onboarding, employee claims, disputes, etc., too much time can be wasted losing employees to competitors with better company culture, benefits, and policies.

Business owners have a lot to do, and HR paperwork can take up hours weekly — where you could be focusing on other tasks that are just as important. Running a business is hard, but it’s even more complicated when bogged down with HR tasks. PEOs take this burden away, freeing up tons of time for you to give your all to other important areas of business while resting assured that your HR is taken care of in the process.

Should Manufacturers Hire an HR Team or Partner with a PEO?

Taking the burden of human resources challenges off your hands can go one of two ways: either you hire in-house or outsource your HR to a PEO. This doesn't always mean that you won't need any in-house HR staff, but you can have a more manageable and affordable HR team while accessing the experience and expertise that PEOs offer.

While determining if a PEO is the best fit for you, there are at least two areas to consider.  

Cost

PEOs cost less than hiring an HR team. You'll have to consider the costs of every team member's payroll, benefits, hiring, training (new hire and ongoing), etc. Then you'll want to ask yourself, "What is the average salary of an HR manager?" In this case, Rasmussen University says you can expect somewhere around $116,720, with many companies going much higher. As for other team members' salaries, the University says you can expect to pay the following:

• HR Assistant — $41,430
• Payroll and Timekeeping Clerk — $46,180
• HR Specialist — $61,920
• Training and Development Specialist — $61,210
• Compensation/ benefits specialist — $64,560
• Labor Relations Specialist — $69,020

For smaller businesses, there is a need for HR, but the cost is too high and not worth hiring in-house. A PEO can help with that.

ROI

PEOs are not only less expensive than in-house, but the ROI is greater. According to NAPEO, companies in a PEO partnership grow 7 to 9% quicker than those that are not, and:

• Have 10 to 14% lower turnover
• Are 50% less likely to go out of business
• Benefit from an ROI in cost savings up to 27.2% or more

Who Should Outsource HR?

Although most — if not all — businesses can benefit from outsourcing HR in some way, those that would benefit most from a manufacturing industry PEO are typically companies that want to expand and grow their business but have limited resources to make it happen.

According to Indeed, an excellent way to evaluate whether your company should outsource HR is by considering how well a PEO will align with your business objectives, considering what your employees think about your current in-house HR team operations, and assessing how well your HR team is keeping up with rapidly evolving laws, practices, benefits/plans, technology, and more.

For manufacturing businesses, in particular, outsourcing can be ideal if you can relate to the following:

• Are small to mid-sized
• Have 25-500 Employees
• Allows you to shift focus from transactional HR to strategic HR, which allows for greater employee-centric focus and company objectives

You're Not Partnering With Just Any PEO When You Partner With PRO

Working with the right PEO can be the 'make-it-or-break-or' for the success of your HR. You don't want to work with just any PEO — you want to work with PRO for outsourced HR. Why? Because PRO team members are at the top of their fields and committed to helping your manufacturing company reach its full potential. Worried about losing the incredible HR team you currently have? No problem! Even if you have a small internal team, you can supplement with a PEO for HR help for manufacturing.

Contact us to learn more about PEO partnerships and what PRO Resources can do for you.