Gi Group Holding: Manufacturing Global HR Trends

30 May 2023

Manufacturing is regarded as the backbone of both social and economic development. Accounting for 17% of the global GDP, this industry contributes to the overall growth and competitiveness of countries around the world. Despite the economic and social uncertainty of recent years, the global Manufacturing market has been experiencing substantial growth since 2020, and in 2021 was worth $16.4 trillion.

Many researchers look at Manufacturing from a birds-eye view, basing their analyses on revenue, profit, share price, or company headcount. But these assessments lack the nuanced perspectives of people inside the industry. As a result, they rarely uncover why the latest trends are happening.

In 2020, COVID-19 hit the Manufacturing industry fast and hard. During the peak of the pandemic, the industry faced a shortage of workers and candidates, with quarantine regulations stopping many employees from working. At the same time, raw material suppliers themselves were affected by the pandemic, leading to devastating shortages. While some companies are still feeling the impact of these trends, the Manufacturing market is seeing substantial new growth. In 2021, the global market of Manufacturing was worth $16.4 trillion, 21% more than its value in 2020.

How is this market distributed globally? In total, 54% of the global Manufacturing market is concentrated in Asia. Europe and North America compete for the second position with 19% and 18% respectively. Africa, South America, and CIS regions produce – all together – less than 10% of the total amount of products in the Manufacturing market.

Manufacturing is still a major player in the world’s economic systems, too. According to the World Bank, the Manufacturing industry accounted for 17% of the global GDP in 2021.

According to several Manufacturing companies, two common trends are leading the industry and contributing to its development:
• Increased focus on Automation: Although automation has been picking up speed for some time, Manufacturing companies are investing more in production management software or robotic tools. Manufacturers are using them to improve activities such as processing, assembly, inspection, inventory management, and production planning.
• Growing interest in Sustainability: Sustainability is a top concern for consumers today, and this is having a knock-on effect on businesses. Manufacturers are now gearing production towards sustainability in what appears to be a reversal of past trends. Previous studies showed that just 42% of Manufacturing companies had defined a plan for sustainability in 2021. This put the Manufacturing industry in last place behind other industries.

It is known that Manufacturing is a major contributor to emissions, and this has resulted in increased pressure upon the industry. With data now showing a decrease in carbon emissions globally, there is some indication that sustainability efforts are paying off. In addition, it is worth noticing that another trend, specific to the Brazilian market, is emerging: the increase in the outsourcing of manufacturing/machinery parts purchasing from third-party companies, mainly from China (machine building).

Along Sustainability, Digital Transformation is now a priority for most manufacturers—but how much are the different countries investing in it?

Poland and the United Kingdom are the technology leaders, with 90% of companies saying they have introduced Digital Transformation technologies. Germany is close behind, with a figure of 88%. Among the Digital Transformation technologies, cloud computing and digital integration are the most adopted, followed by big data analytics and cybersecurity.  (Source: Istituto Piepoli)

It’s clear that the Manufacturing industry sees the appeal in innovation. But every change has potential downsides, particularly with new technologies that have not yet been refined. Decision makers expect that the implementation of new technologies will generate increased productivity and efficiency, together with a reduction in costs and an increase in profits. On the other hand, the biggest challenges are the cost of equipment and the lack of skills at the operator level. It seems likely that many companies have invested in these efficiency-enhancing technologies as a response to the pressures of Covid-19 and other issues. Presumably, they expect the long-term improvements to be worth these early teething problems.

In many industries, workers have perceived technology as a threat to their job security. However, in recent years, professionals in Manufacturing have undergone a mindset shift around this topic. Many now see that automation has the potential to create jobs. Countries like Poland and Italy are the most optimistic, believing that automation will have a positive impact on employment. Meanwhile, only 25% of experts in China shared this optimism. This may reflect the makeup of the job market, which has a high number of low and medium-skilled workers.

As consequence of the increase of automation in workplace the companies will become more competitive, this also will affect employment. Industry experts’ expectations are:
• Greater demand for skilled workers. Workers must be familiar with the new wave of automation processes, or at least able to adapt quickly. 
• An increase in salaries will likely follow from the influx in skilled workers. Experts anticipate that the increase in salaries, in turn, will make the industry more appealing to newcomers. 
• Improvements in continuous learning. Workers will have strong reasons to keep updated with the fast-changing environment and increasing automation processes. 
• Technology will impact the HR manager’s role, making it crucial to the company’s strategy. With the increased focused on staff training, recruitment, and retention, Human Resources teams will play increasingly important roles in Manufacturing.

Automation is clearly going to affect jobs in Manufacturing, and 26% of our interviewees think that fewer people will be needed to perform the same task. This presents a major challenge to low and medium-skilled blue-collar workers, who typically have fewer qualifications. OECD research shows that jobs performed by low-skilled individuals face a higher risk of being automatable.

However, this challenge is not an easy one to solve. Of the experts we asked, 33% said that many workers do not have the right skills needed to succeed at new jobs created by automation. Despite this, many experts are optimistic that automation represents a good opportunity. Overall, our thought leaders believe that it will give workers an incentive to enhance their skills or acquire new ones, thus helping them grow professionally and increase their salaries. 

Jobs in the Manufacturing industry will also become more accessible to people with disabilities or other disadvantages. Automation will free employees from physically demanding tasks, which will instead be performed by robots under workers’ direction and control.

Gi Group Holding
Gi Group Holding is one of the world’s leading companies providing services for the development of the labor market. The Group is active in the fields of temporary and permanent staffing, search and selection, HR consulting and training, as well as in a variety of complementary activities

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