Australian Manufacturing Back on Track: How to ride the sector’s trends
It’s a good start for Australia’s manufacturing sector. According to Australian Industry Group’s (Ai Group’s) Chief Executive Innes Willox, Australia’s manufacturing sector strengthened in February 2019. It faltered at the end of 2018 but indicators for production, sales, exports, and employment all improved this year. Currently, the industry accounts for 6% of Australia’s economy. While manufacturing’s share of the economy has gone down in recent years, its prospects are very optimistic. Technology is changing the game for Australia’s manufacturers, and here’s how you can take advantage of the trend.
Automating labour management
Labour costs can account for up to 50% of total business costs. For manufacturers, labour costs should remain closer to 30% to remain profitable. But wages are growing at a faster pace than selling prices. Last year, wage growth hit the highest level in 3 years when the minimum wage increased by 3.5%. Even so, businesses should prepare for more labour cost increases. Calls to change the minimum wage into a “living wage” will be a defining issue in the upcoming elections. Profit margins will remain tight as higher costs will be difficult to pass on to customers. That’s where tech in labour management comes in.
Using tech to manage your rosters and wage costs can result in significant cost savings for your company. Old methods of rostering, whether on paper or Excel, will not yield the insights that modern software can. With workforce software, you can control your wage spend by setting targets for labour costs. You can also use existing roster templates to predict your staffing requirements. Throughout the week, you can even see wage costs in real-time and adjust staffing levels to drive profitability. Managers can have access to all this data on one seamless platform.
Transitioning to a workforce management platform can be intimidating. But there is no better way for manufacturing companies to take advantage of growth than investing in the right software. In fact, it would be hard to succeed without it. Across all industries the automation of administrative tasks, especially in labour management, is best practice. It gives you unprecedented oversight no matter where you are. It also frees up your time for more important tasks like training staff and being on top of wage costs. And all this at a fraction of the time you used to spend in the back office.
Investing in the next generation
According to the Ai Group, “[Manufacturing] businesses in all states remain very concerned about growing skill shortages for experienced, technical and specialist tasks.” Millennials and Gen Zs aren’t necessarily lining up for jobs in manufacturing. In fact, many younger employees want to work for industries like technology and healthcare. And with the manufacturing industry’s aeging worker population, there could be a real shortfall in employees in the near future. Businesses should attract the next generation by hiring apprentices or trainees.
Encouraging the youth to join manufacturing through apprenticeships or traineeships can ensure that there is no shortage of skilled employees. But businesses need to do more to attract them to the industry. One clear way of doing this is by incorporating tech into everyday operations. Younger employees expect that tech is integrated into work. They want to see accessibility, paperless communication, and instant feedback. Explore automated rostering, employee apps with GPS clock-in, and work chat apps to cater to the next generation.
Seizing today’s tech opportunities
The manufacturing industry is undergoing many changes. It has gotten back on track after a dip in productivity and great opportunities lie ahead. However, rising wage costs and a skills shortage can threaten the gains and possibly the survival of the industry itself. It is now up to business owners to strategize for the future. Controlling labour costs is a major hurdle but easy to get right by using tech to set limits and adjust staffing levels. In the same way, tech can be used to attract the next generation to pursue a career in the field. Investing in tech today can increase the chances of a successful place in the manufacturing industry.