By Kevin Kane, President of First Business Bank’s Southeast Wisconsin Market
I’ve always believed it’s important to be a resource for clients and to support our business community with important information. The perfect example are two surveys of businesses and manufacturers in Wisconsin over the past few months. First Business Bank’s Business Statistics & Trends Report, a snapshot and predictor of business activity in our state for almost two decades, and the Wisconsin Manufacturing Report*, a new, annual in-depth survey of manufacturing executives sponsored by First Business Bank.
As I compare the findings of these two reports, a few similarities emerge. They are, perhaps, not unexpected, but I think they offer insight into Wisconsin’s manufacturing climate in 2022.
Business & Manufacturing Optimism in 2022
The Business Statistics & Trends Report showed that business leaders are optimistic for 2022; they project an increase in sales, and higher profits — though not proportionate to the increase in sales. The labor shortage, supply chain issues, and inflation are challenges they identified; the talent hunt is a top priority. Those challenges will undoubtedly put pressure on profits, but not enough to dampen optimism for the year ahead. Although this survey isn’t specific to manufacturing, it paints a picture of the overall business climate in Wisconsin.
As it turns out, the manufacturing industry’s experience is largely aligned with those greater findings. The same cautious optimism is reflected in the Wisconsin Manufacturing Report when it comes to revenue and profit projections for the coming year, though there’s a sense that the economic climate is not as positive as it was five years ago. Manufacturers in Wisconsin also identify the same challenges related to the cost and availability of supplies, recruiting and retaining employees, and inflation concerns.
There are some nuances: larger manufacturers are more concerned with the labor shortage and smaller ones with the supply chain challenges, but clearly the labor force is a significant factor. Wages have gone up as manufacturers try to attract and keep talent, but many are also focusing on the workplace experience and investigating automation. They’re interested in diversifying their client base and see the value in a formal, growth-focused strategic plan.
Solutions for Wisconsin Manufacturers
As manufacturing leaders head to Manufacturing Matters, I suspect they’ll be looking for solutions. We know from our manufacturing clients that they want practical, actionable takeaways they can use to improve their business, fuel their growth, and improve resiliency in the face of current and future challenges. I have some thoughts of my own for specific steps they can take to accomplish just that:
- Create and implement a strategic plan. Those who don’t yet have a formal strategic plan need to create one. It will not only be a roadmap for how to achieve critical goals, but also allow them to more intelligently allocate scarce resources and capital, and to measure the effectiveness of their efforts. For example, developing an intentional approach to automation to help drive efficiencies.
- Initiate a talent marketing plan. As manufacturers become more marketing savvy, they can create a talent marketing plan specifically tailored to recruitment and retention of employees. A well-rounded plan will allow them to effectively differentiate themselves from other companies competing for talent, perhaps in ways that go beyond the obvious tactic to increase wages. Additionally, employee engagement surveys can provide insights on how to improve the employee experience, as well as become a powerful recruiting tool.
- Measure satisfaction. Measuring customer satisfaction will help manufacturers know precisely what they can do to serve their customers better. Insights gained from this effort may also open the door to product innovation, ideas to attract new clients, or ways to enter new markets.
- Cross-train employees. When the labor market gets tough, gaps in bench strength become more evident. Cross-training employees and investing in leadership training for those who show promise can be a game-changer for manufacturers. It won’t happen overnight, but its effects will be far-reaching and last for many years.
There’s probably more to say, but that’s exactly the purpose of Manufacturing Matters 2022 conference. It’s an opportunity for Wisconsin manufacturing leaders to get together, exchange ideas, and explore solutions that will benefit everyone.
In my role at our business-focused bank, I enjoy the opportunity Manufacturing Matters offers to learn new things and share best practices with the business community. At the event, whether we’re meeting for the first time or seeing each other in person after a while, I look forward to connecting and helping your business be even more successful in 2022!
*The Wisconsin Manufacturing Report was commissioned by the Wisconsin Center for Manufacturing and Productivity (WCMP) in collaboration with WMEP Manufacturing Solutions (WMEP) and the University of Wisconsin – Stout Manufacturing Outreach Center (MOC). It was sponsored by First Business Bank.