Manufacturing leaders, we see you—grappling with challenges that seem to grow faster than a production line on overdrive.
Not only are you dealing with rising energy costs and supply chain snags. But the relentless pressure of manufacturing labour costs as a result of the UK Autumn Budget 2024, and the upcoming rise in the national minimum wage can feel claustrophobic at its best.
If there is any consolation, you are not alone. A recent report from PwC found that 92% of UK manufacturers (much like yourself) fear these additional labour costs will be the main effect on the bottom line.
But, here’s the silver lining when it comes to managing the cost-cutting pressures: instead of treating HR as a background operation, why not make it your secret weapon to drive business outcomes?
Smooth operations without headaches
Despite hiking employment costs, there is a light at the end of the tunnel. The manufacturing sector is expected to grow in the coming years, with predictions of a compound annual growth rate of 1.27% expected from 2025–2029.
How does this relate to the current challenge we face with cutting manufacturing labour costs?
A lot, actually.
Yes, operational labour costs are one of the biggest expenses on your books. However, cutting costs doesn’t mean you necessarily have to cut your people.
The hidden goldmine of internal mobility
Do you remember what happened in the tech industry during the economic slowdown in 2022 and early 2023?
Anticipating a prolonged downturn, major tech companies (such as Meta, Amazon and Google), implemented large-scale layoffs as a bid to save the bottom line.
However, as the economy began to stabilise and demand for tech services and products rebounded, it was these very companies that found themselves scrambling to rehire talent.
The rapid layoffs, which seemed like a prudent cost-saving measure at the time, led to talent shortages, project delays, and increased competition for skilled workers. In essence, what appeared to be a knee-jerking cost-saving measure, ended up costing their businesses in the long-run.
But, what if we told you that there was a more effective way to tackle this downturn? Yes, just as the headline depicts, it is focusing on skills for internal mobility.
This means understanding the skills, knowledge and capabilities of your workforce. Now, we are not saying that redundancies won’t have to be made. Sometimes they just have to happen. However, if you are going to make people redundant, make sure you aren’t letting go of those who have transferable skills.
For example, say you have a production operator who has experience working the lines but also the warehouse. Instead of letting this versatile employee go during a cost-cutting phase, you could redeploy them into areas where their skills can fill gaps.
All you need is an HR tech stack that speaks to each other. And in the same language.
An all-in-one HR system that connects workforce management, scheduling, performance, and learning and development tools to allow data to flow effortlessly between platforms and give you real-time visibility into skills, availability, and performance.
The result? Internal mobility, reduced redundancy-related costs, and maintained operational excellence.
Perfect timing, every time
On the other hand, reducing labour costs also means scheduling the right number of employees for the exact manufacturing demand.
Picture this: You’ve got a big order coming up, and your production line needs to operate at maximum efficiency. You have a tight deadline, and everything needs to run smoothly and within budget.
By ensuring you have just enough staff—neither too many nor too few—you minimise inefficiencies while maintaining output quality.
This is where the power of merging your production data with your HR data can help you unlock a powerful synergy that allows for smarter workforce planning.
And with the right forecasting and planning tool, you can have the ability to predict staffing needs with pinpoint accuracy, taking into account historical production trends, seasonal variations, and upcoming order volumes.
No more overscheduling or underscheduling. Just a beautifully crafted roster that keeps costs in check and production running smoothly.
Let automation take the wheel
This is where a scheduling tool that compliments your workforce planning efforts is the cherry on top. Because, let’s be honest, while the above information is highly required, adjusting schedules manually, managing shift swaps, and ensuring compliance with UK employment laws can be overwhelming.
Automated scheduling tools streamline this chaos by creating schedules that take into account business demand, staff requirement, employee availability, skills, and Working Time Directive (along with other assigned company policies).
Then, if there are any upcoming absences, swift swap requests, or changes to demand, you get automatically notified, so you can rearrange shifts accordingly.
Staff get notified of changes, and everyone gets on with their day.
That’s what automation is about.
Rinse and repeat for success
When you do create those schedules that manage a production line like clockwork, save that winning formula.
Think of it as your golden ticket to smooth operations. Use it for similar scenarios down the road or tweak it slightly to adapt to future challenges. Trust us, you will end up saving more time, while experiencing less stress. Plus, it’s always nice to have a trusty fallback plan when things get hectic. And your management get to spend that additional time being the people managers that you hired them for.
Happy employees, healthier margins
Happy employees stick around longer, learn faster, and contribute more. In other words, happy employees equals happy profit margins. In fact, if we look at the research, companies with happier employees have been found to earn 147% more per share than their competitors.
It is the ultimate strategy for sustainable success. Think fewer recruitment costs, lower turnover rates, and a workforce that runs like a well-oiled machine.
However, keeping employees happy goes beyond thicker pay checks. Right now, manufacturing labour costs are already spilling, and pay rises are just not on the cards. But you can compensate by making your employees’ lives easier. Here are a few suggestions on how:
Flexibility that works for everyone
While hybrid or remote work might not be an option for many frontline workers, offering some form of flexibility can still make a massive impact to their work-life balance.
For example, some employees might prefer to work longer hours over fewer days to free up their weekends, while others may need mornings off due to childcare responsibilities or require a consistent break from night shifts. Why not make it happen if it’s safe and feasible?
With elementsuite, employees can submit their availability, request preferred shifts and swap shifts easily, allowing them to organise their work around their busy lives.
Imagine the morale boost when a team member sees their specific needs accommodated – like having Fridays off for their child’s football matches or starting work at 10am instead of 8am so that they can drop the kids off at school.
It’s not just about dodging scheduling conflicts; it’s about building a workplace where employees know they’re respected as individuals. Over time, this trust fosters a happier, more engaged workforce, which means better retention, higher productivity, and lower absenteeism. Yup, you know what that means. Less costs and higher profit margins.
Empower your team with self-service
Not all your manufacturing employees will use ChatGPT to support them with their work duties. But, we can almost definitely confirm that the majority are using it for their personal lives.
Whether it be supporting them with a new workout regime, recipes for Friday night take-aways. Or for those who haven’t used ChatGPT before, they are using AI to either help them with returning online shopping or simply asking Alexa to tell them what the weather will be like next week for their staycation to Wales.
In short, your employees (especially the younger workforce) use AI every day to help them navigate the complexities of their daily lives. Why should their work-life be any different?
With an AI-powered HR assistant like ELLA, they can do exactly that. From asking ELLA who they can swap Friday’s shift with and how many days leave they have, to understanding their pay benefits (and the list goes on), your employees can gain instant answers to their HR queries, without having to wait two business working days for HR or management to respond.
This doesn’t just save money in terms of admin time; it hands control back to your workforce. It’s a no-brainer: your HR team gets to focus on strategic initiatives, and your employees get the tools to take charge of their work-life balance.
Want to learn more about what ELLA can do for your manufacturing business? Book a demo today
Smarter systems, leaner costs
Cutting operational costs is not just about creating effective schedules and making employees happier and more productive; it’s also about optimising processes from top to bottom.
We already spoke about reducing the time it takes to answer HR queries and create schedules. But the right HR technology can do so much more that will help you save hours of administrative work and thousands in operational expenses.
Payroll that gets it right the first time
Payroll errors are costly—both financially and in terms of trust. All it takes is one small misstep, such as a missed overtime payment or an incorrect deduction, and just like a domino, it can set off a chain reaction of discontent (plus an additional 12 hours a month on payroll correction).
Imagine an employee discovering a payroll error right before a weekend or holiday—frustration builds, morale takes a hit, and suddenly, your once-engaged team starts questioning their trust in the system.
Or even worse, the same employee has experienced payroll errors three months in a row, and now the tribunal is involved. That’s just what you need (not!).
Automating payroll processes eliminates these issues by ensuring accuracy, speed, and compliance. Imagine the peace of mind knowing that every payment is calculated precisely, with zero room for error. You can finally have the last working day of the month back, rather than pulling your hair out trying to understand where it all went wrong.
Know who’s clocked in (and who’s not)
It gets better. When your payroll system is connected to your scheduling, time tracking and attendance tools, everything clicks into place like a perfectly tuned assembly line.
Who’s clocked in? Who’s stayed late to finish an urgent order? Ensure you’re never left in the dark with the right systems in place. Whether it’s flagging a no-show before it disrupts production or tracking who’s stayed overtime to lend a hand during a critical rush, the right system will provide you with the information you need to immediately fill gaps or reallocate resources efficiently.
And because the data syncs directly with payroll, you’ll avoid any awkward pay disputes or discrepancies—keeping payroll mishaps at bay and employee trust intact.
Communication that keeps things rolling
Research from Gallup suggests that companies with inadequate listening and communication practices might experience higher turnover rates than those with effective communication strategies. This turnover can lead to staggering losses, especially when every penny matters in tight budgets.
Whether it’s posting new job opportunities, filling last-minute shifts, or even communicating crucial updates to production processes or safety protocols, effective communication is key to avoiding turnover costs.
But with the right internal communication tools, you can turn this around. No, we don’t mean Slack, or Microsoft teams. Yes, these can be useful for organisations that don’t have deskless employees. But in the manufacturing sector, that just wouldn’t work.
What would work is if an internal communications platform was available on the company’s mobile-friendly HR system. Employees would get a real-time notification for updates, minimising confusion or missed memos. It’s like having a direct line to every team member, keeping operations smooth and costs under control.
Data that drives decisions
Everything your people do is data, and that data is the key to unlocking smarter, more efficient operations. You can use it to reveal patterns, predict challenges, and guide strategic decisions that save money and boost efficiency.
Find and fix costly blind spots
Are some departments consistently racking up overtime? Is absenteeism more frequent on certain shifts? By analysing workforce data, you can uncover inefficiencies and take targeted corrective action.
For example, if certain departments are logging excessive overtime, it might indicate a mismatch between staffing levels and production demands. From there, you could decide to implement staggered breaks or scheduling additional support during peak times to reduce overtime costs but also alleviate employee fatigue and boost productivity.
When you have a HR system with advanced reporting capabilities, it can also reveal surprising patterns, such as shifts that consistently have higher absenteeism. Armed with these insights, you can explore the root causes—perhaps it’s due to unfavourable shift timings or a lack of adequate support—and implement solutions like rotating schedules or offering incentives for less popular shifts.
Selecting the HR tech your factory deserves
The right HR software can act as the glue between your operational and HR data, helping you identify and address root inefficiencies, and create a workplace culture that has employee experience and productivity at the top of mind.
The payoff? Reduced operational costs and streamlined workflows that keep your operations lean and effective.
However, in a world swimming with HR technology solutions (all promising the world), it is important to avoid hopping on the trending HR tech bandwagon. Remember, this is an investment in providing your manufacturing teams with the tools they need to work smarter and more cost efficient.
Your investment in HR technology should deliver real and measurable business value. And it all starts with understanding exactly where your HR processes need support from automation—whether that’s scheduling, compliance, or employee engagement.
Perhaps it’s about finding a platform that integrates operational and HR data for real-time workforce insights. Or maybe you need a system that crafts schedules optimised for daily production demands. Every manufacturing operation has its own unique tech requirements, and your choice should align with your specific challenges.
The key is identifying your biggest pain points. Is manual scheduling eating up hours? Does your current software lack the forecasting capabilities needed for precise workforce planning? Are HR teams overwhelmed by routine employee requests? Knowing these answers will guide your next steps.
To simplify this process, we’ve developed a FREE heat map in our HR toolkit to help you pinpoint inefficiencies in your operations. From scheduling bottlenecks to compliance gaps, it highlights the areas where tech can have the most significant impact, guiding you toward smarter, more effective solutions.
Download our HR tech heatmap today and take the first step towards more informed and HR technology investment.
Prepare your workforce for tomorrow with elementsuite
The UK manufacturing sector is evolving, and staying competitive requires more than just keeping the machines running. It’s about staying ahead of industry shifts, adapting to economic pressures, and creating an environment where both operations and employees thrive.
The old reactive ways of talent management need to be left behind. Instead, the focus needs to shift towards future-proofing operations through smart, data-driven solutions that empower teams, streamline workflows and reduce your labour costs.
An HR software like elementsuite provides more than just operational efficiencies; it brings clarity to decision-making, elevates employee satisfaction, and integrates seamlessly with your current HR and production tools.
Ready to see the difference it can make? Take the first step towards a smarter, more efficient future.
Book a demo today and uncover how elementsuite can transform your HR strategy into a powerhouse of productivity and success.
