In the manufacturing industry, 2023 was a year of great change that started with the core asset of any organization—its people. Industry players continued to face the ever-persistent lack of skilled talent, risk aversion, and shifting customer behaviors. Although the adoption of transformative technology created solutions to help address some of these issues, the professionals supposed to be at the helm of these solutions were lacking.

Authors Lisa Hellqvist, Kris Odland, Radiana Pit

Photo: Freepik

The people making up the B2B space on both the provider and customer sides have recognized the importance and time-sensitivity aspect of this pressing matter. As we’ve witnessed this year in our events, a lot of effort was put into developing or adopting solutions that could close the talent gap, address resistance to change, and meet customer needs. But the work has only begun. So, join us as we take a look back at the year drawing to an end and explore the lessons that we need to carry with us into 2024.

1. Diversifying the Talent Pool

The workforce crisis has been causing challenges for industry players in recent years, reaching its peak during the 2020 pandemic. However, the crisis is not nearly over. Its impact has been painfully felt throughout 2023, especially by field service organizations (FSOs). According to our research this year:

  • 65.69% of companies acknowledged a shortage of skilled labor, marking the highest impact of the workforce crisis in the past four years. 
  • 28.43% have also expressed concerns about a potential lack of skilled labor in the next five years. 
  • 37.25% of organizations foresee a need for field service technicians with digital skills in the future. 

An IDC report also found that 55% of organizations witnessed a higher number of employee resignations in the previous year, leading to 37% of them delaying tech initiatives whilst 36% have changed the direction of their goals altogether. This paints a rather concerning picture for the future and organizations are struggling to come up with solutions before their business suffers even more from lack of personnel. 

What Causes the Workforce Crisis?

  • The industry is experiencing a recruitment crisis, exacerbated by pandemic-related layoffs and turnovers. The difficulty in onboarding new talent for technical roles poses a threat to the success of organizations that have undergone business transformation.
  • Millennials and Gen Z struggle to match the hands-on expertise of their seniors, leading to a significant knowledge gap. The impending retirement of the aging workforce makes it more challenging to transfer specialized knowledge and experience to the next generation.
  • Newcomers have different workplace expectations, emphasizing the need for a modernized approach to recruitment and retention. Organizations must adapt to changing expectations, making jobs less physically demanding and incorporating continuous learning and skill development with the help of advanced technology.
  • Market growth, the rise of the gig economy, the aging workforce, and millennial aversion contribute to the shrinking talent pool, affecting productivity, competitiveness, and innovation.

AI Technology to Close the Gap

AI-powered solutions like visual assistance and augmented reality (AR) have gained significant traction this year due to their potential to help organizations make the workplace more attractive and less physically demanding whilst facilitating knowledge transfer between seniors and juniors. Many organizations are now seeing the value of integrating AI into their workflows and, according to the World Economic Forum, 75% are planning to adopt AI technologies within the next five years.

IDC’s 2023 Future of Work predictions further reflect the industry-wide recognition of AI’s potential to change the workplace. AI-driven scheduling alone is projected to lead to a significant 40% increase in productivity by 2025. And come 2030, 70% of field service organizations will be likewise poised to embrace cutting-edge visual assistance solutions. 

By 2025, half of the global workforce will require reskilling to keep pace with advancing technologies. This creates a prime opportunity for field service organizations to proactively position themselves at the forefront of this transformative wave by ensuring their technicians are well-equipped to navigate the technology-driven future that is coming our way.

Lisa Hellqvist, Managing Director, Copperberg

“AI, when seamlessly integrated as a business supporting tool and when it aligns with an organization’s existing processes and core values, offers unparalleled efficiency gains. It’s not about replacing humans but liberating time from mundane tasks, transforming the workplace into a dynamic and rewarding environment. By eliminating idling and paper shuffling, AI enables a more efficient workspace, allowing teams to focus on meaningful, value-added tasks. This not only enhances productivity but also positions the organization as forward-thinking, attracting young talent seeking a tech-savvy work environment. As we embrace AI as an efficiency booster, it becomes a compelling argument for creating a workplace that not only adapts to advancing technologies but also champions a healthy work-life balance, making it an irresistible employment package for many. Let’s not treat AI as the solution to everything but rather as an important tool that can help us building stronger organizations going forward.”

The Impact of Gender Diversity

Technology is only part of the solution to the workforce crisis—sure, it can help organizations preserve their institutional knowledge and transfer it to the next generation, it can help them save time and resources on client calls, and it can take day-to-day operations to a new level of efficiency. But the other part of the solution has less to do with technology and more to do with a change in mindset. 

The Center for Manufacturing Research found that a significant portion of the manufacturing workforce consists of women, currently making up over 29%. Increasing this representation to 35% could add approximately 800,000 more female employees, potentially filling the majority of open positions in the manufacturing sector. Increasing the percentage of women in the manufacturing sector can address talent shortages significantly. 

Companies should focus on policies promoting worker flexibility, child care support, and initiatives like mentorship programs to attract and retain more diverse talent. Organizations that have already enhanced worker flexibility, incorporated part-time options, adjusted schedules, and remote work opportunities, have observed a positive correlation with their ability to attract and retain employees.

And it is not just women that are seeking accommodating policies. Both men and women in the manufacturing industry identify the lack of childcare options and support as an issue, with a consensus suggesting it is a more significant challenge for women. Workplace flexibility, including remote work options, is seen as a solution, and some organizations are exploring subsidized or onsite childcare solutions.

Kris Oldland, Editor in Chief, Field Service News by Copperberg

“The issue of gender diversity, or lack of it, within manufacturing and engineering sectors is far more pressing than simply wanting to bring greater parity into the workforce. We are genuinely facing a crisis in all corners of the industry when it comes to workforce shortages, particularly in field engineering roles.

As I discussed in depth in a recent issue of the FSN Digital Symposium where I spoke to Lauren Neal—author of ‘Valued at Work: Shining a light on bias to engage, enable, and retain women in STEM—the critical aspect that shifts this problem from nice to fix to burning platform is the realization in senior management that tackling the gender gap in our field workforces is a huge part in solving a genuine crisis we are all facing as an industry.”

Lisa Hellqvist, Managing Director, Copperberg

I believe this will be a make it or break it question going forward. As Kris pointed out, the crisis of workforce shortage across all corners basically make it non-viable to no longer be considered an attractive employer for close to 50% of the potential talent pool.

Basically this is a great challenge for anyone in the industry, it is clear to me that those who are not trying to bridge this gap actively by enhancing their chances to attract more new talent, will be outrun by their competition.”

Changing Workforce Expectations

The next-generation workforce, comprised of Millennials and Gen Z, places great emphasis on workplace diversity and brings with it a set of expectations that require a forward-thinking and dynamic approach.

Adapting to Evolving Expectations

Flexible work models: Work-life balance is important to both newcomers and retiring workers, they seek out schedules that accommodate personal needs and allow for a harmonious integration of professional and personal life. Offering flexible work arrangements, which may include options for remote work, adjusted work hours, or part-time opportunities is key for employee satisfaction and increased productivity.

Technology integration: The next-generation workforce, having grown up in a digital era, anticipates a workplace where technology is not just present but is seamlessly integrated into daily operations. Organizations can achieve this by leveraging AI, AR, and visual assistance platforms. This not only enhances operational efficiency but also aligns with the tech-savvy preferences of the younger workforce, making the work environment more engaging and productive.

Social and environmental causes: Organizations can differentiate themselves and attract top talent by showcasing a genuine commitment to social and environmental causes. This means aligning organizational values with issues that matter to the workforce, such as sustainability, diversity, and community engagement. By actively participating in and promoting these causes, organizations can create a culture that resonates with the values of the younger generation and fosters a sense of purpose and pride among employees.

Career development and professional growth: Prioritizing continuous learning, skill development, and mentorship is attractive for workers at the beginning of their professional journey. Organizations can create opportunities for career development and training to show support for their workers’ professional ambitions. This not only enhances the skill set of the workforce but also contributes to a positive and supportive organizational culture.

2. Accepting Change as the New Normal

To diversify the talent pool and address the challenges that will persist in 2024, change needs to be properly managed across the organization. It’s crucial to recognize that change management is not a one-time outcome but an ongoing process that affects people at every level of the organization. Attempting to implement all changes within a specific timeframe, driven by external factors like the advent of a new year, often results in failure. The secret to success lies in taking small, incremental steps to not only change the organizational culture but also foster a culture of resilience and flexibility where innovation is not hindered by people’s risk aversion.

Strategizing for change vs. being open to change 

It’s one thing to prepare for change and another to embrace what’s coming, to have the foresight to turn a potential challenge into an opportunity for growth, and to accept that change is a constant reality in business or otherwise. A mindset of the former often leads to imposing changes on employees which does not help satisfaction rates, while the latter entails fostering an organizational culture where people collaborate for change. 

According to Oak Engage’s recent Change Report, a significant 43% of people believe their employers are ill-prepared to manage workplace change, and a concerning 70% of change projects crash and burn. This indicates a critical need for organizations to shift from a strategy-centric approach to a cultural one, where change is not a pressing force that meddles with people’s business but a principle embedded within the professional mindset.

The importance of organizational culture cannot be emphasized enough. According to Gartner’s Change Management study, 46% of Chief Information Officers (CIOs) identify culture as the biggest barrier to success. CEOs leading digital transformation projects expect deep cultural changes, with 42% describing this as essential. The resistance to change often stems from a lack of trust, itself rooted in a lack of communication and collaboration. And so, it is fair to say that successful change hinges on trust in leadership and alignment between teams and organizational goals.

Preparing for change is critical in the New Year

The consequences of unplanned changes equally threaten the positions of leaders and the bottom line. Forbes reports that 31% of CEOs face dismissal for inadequately managing organizational change. Furthermore, 18% of employees contemplate leaving their jobs when significant organizational changes occur. Preparation thus becomes paramount to ease the fear of the unknown and highlight the positive and long-term impact of changes to come.

The stress induced by change programs is rather substantial, with 73% of affected employees reporting moderate to high-stress levels. The anxiety makes workers feel like they have no control over their jobs, they perceive change as a threat to their security. Upper management has a serious responsibility to communicate clearly and help their workers understand why and how changes occur. For this, change managers are essential. They are the solution for those 41% who identify a lack of trust in leadership as the most significant reason for change resistance. 

Increasing success rates in 2024

While change programs have a high failure rate, there is hope for the better. A transformation is 5.8 times more likely to be successful when CEOs communicate a compelling, high-level change story. However, a good story is not enough. For transformation efforts to deliver the promised results, organizations must properly equip their people to navigate the transition to a new way of working. 

Kris Oldland, Editor in Chief, Field Service News by Copperberg

“One of the things I’ve seen consistently across the last decade is the importance of change champions within the workforce. If done correctly, this not only helps move the needle in terms of adoption rates across the board but also brings the rising stars of the organisation into roles where they buy-in to the organisation.

Some of the best ideas that can really drive efficiencies and innovations have come from organisations that put their trust in those on the front line, who observe what delights and what disappoints customers each and every day. Your change champions can be more than drivers for easy adoption, they can be the catalyst for longer-term, more impactful change that will shape your success in the future.”

3. Keeping the customer in sight

There are the people on the one side of the organization who keep the business going, who need support through changes and better ways of doing their jobs. Then there are the people on the other side of the organization—the customers—whose satisfaction is directly proportional to employee efficiency and whose behaviors, needs, and preferences inform transformation processes.

The rise of customer-centricity

The increased preference of B2B customers to shop online in recent years has prompted organizations to pivot toward online sales and place a greater emphasis on the customer experience. The global pandemic accelerated this digital transformation in 2020, enabling businesses to serve customers remotely, ensuring continuity, and creating new opportunities for digital interactions. Since then, B2B customers increasingly favor self-service options, with a significant uptick in large online orders over the past year.

This surge in online sales has led to the increased adoption of digital marketplaces and in 2023, organizations have significantly increased investments in e-commerce solutions. This trend is expected to continue in the coming years.

Lisa Hellqvist, Managing Director, Copperberg

“E-commerce has become the lifeblood of B2B manufacturers, responding to the evolving preferences of customers and becoming indispensable for business success. In today’s landscape, the significance of digital marketplaces and robust e-commerce solutions cannot be overstated. They not only provide a seamless avenue for online sales but also cater to the growing demand for self-service options. As we navigate the future, embracing e-commerce is not just advantageous; it’s business critical. Meeting the needs of the modern B2B purchaser requires a strategic investment in digital platforms, ensuring that manufacturers stay agile, competitive, and aligned with the preferences of their clientele.”

Maintaining focus on the customer

Despite the industry-wide transition to online and hybrid sales, the persistent influx of supply chain disruptions and inflation concerns are putting organizations at risk of losing their focus on delivering exceptional customer experiences. However, compromising CX for the sake of short-term profits leads to a lack of customer trust and diminished competitive advantage. Excellent CX is an investment for the long term and a source of a wealth of data for organizations to improve their operations, products, and services.

CX Is a Reflection of Organizational Alignment

  • Shifting towards a customer-centric e-commerce strategy requires organizational alignment and a cultural shift. Creating a company culture that places the customer at the center is essential for delivering positive and relevant experiences.
  • Collaboration between different departments, including sales, marketing, and product development, is crucial for gaining meaningful insights from customer data. A collective effort enables a deeper understanding of buyer behavior and the development of a positive customer experience that fosters loyalty and drives profit.
  • The direct impact of CX on business growth has become more apparent over the past two years. Prioritizing CX in e-commerce is about creating memorable online shopping experiences, building supply chain resilience, and improving production planning.

Elevating the customer experience

A successful CX strategy strongly relies on customer data. Organizations can effectively leverage it for customer segmentation, which allows them to scale their online business by creating personalized experiences based on customer demographics, behavior, and preferences. In the digital-first era, being customer-centric is synonymous with being data-driven, and data is instrumental in predicting customer responses to various market dynamics.

Customer-centric brands report profits that are 60% higher than those that fail to focus on CX. And so, it is no surprise that a whopping 80% are planning to increase customer service budgets in 2024. This could involve the integration of AI, video, data, and personalization to elevate the customer experience further. AI, in particular, holds the potential to automate interactions, with 72% of business leaders agreeing that expanding the use of AI or bots across the customer experience over the next 12 months is very or somewhat important. 

Kris Oldland, Editor in Chief, Field Service News by Copperberg

“Ultimately, while technology continues to empower us in almost every aspect of our working lives, and as we are rapidly facing the shifting tides of digital transformation, the one constant we can anchor ourselves to is that service is inherently still about people.

Great people deliver great service, and great service is what keeps customers returning to us in good times and bad.

While we simply must embrace technology to be able to keep pace with our own goals and those of our customers, we mustn’t forget that this is there to create the space for even richer human-to-human interactions that add value on all sides.

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