Roadblocks still leading to lacking capital investments, updated hiring practices
TORONTO: Canadian manufacturers are more optimistic about the country’s economic prospects this year, according to a new barometer report from consultancy PwC.
More than 75% of those companies in the survey agreed the economy is on the upswing in 2012, up 19 points from last quarter.
In all, 25% who market abroad are also more optimistic about the prospects for the world economy over the next 12 months, four points higher than the prior quarter. Manufacturers that sell abroad reported stabilized international sales in first-quarter 2012, with 22% reporting an increase in sales.
The bad news, however, is that revenue growth projections for survey participants is 4.2%, which has dipped slightly from the calendar year forecast (4.9%) and lower than the prior quarter’s 12 month forecast (5.3%). Fewer (42%) of the survey respondents are planning major new investments of capital by 2013, a figure substantially lower than what was reported in last quarter (60%) and the third quarter of 2011 (66%).
“What we are seeing is that while there is plenty of optimism on the horizon, there is still the reality of financial instability in global markets. But it is positive that international sales are beginning to stabilize for Canadian industrial manufacturers,” says Calum Semple, PwC’s national industrial manufacturing leader .
Topping the list of barriers to growth is oil/energy prices which is at 59% in 2012, compared to 53% during the last two quarters of 2011. Among the 34% of respondents planning to hire within the next 12 months, the most sought-after employees will be professionals/technicians (22%), production workers (17%) and skilled labor (17%)
More than half of the manufacturing executives interviewed in the barometer study see large gaps in skilled labour. Current approaches employed by organizations in the industrial manufacturing sector to attract talent are not enough to meet the needs of Generation Y (Gen Y or millennials- those born from the early 1980s onwards), a group that will make up 50% of the global workforce by 2020.
The tactics used by the manufacturing industry to attract talent are more aligned to draw the baby boomers (born 1943-1960) and Generation X (born between 1961-1981) demographic group, rather than attracting millennials. Findings from more than 40 senior manufacturing executives surveyed specified that:
“As the manufacturing industry faces a change in the workforce, it’s critical for Canadian manufacturers to start using these non-traditional channels if they are to attract and retain the best talent from Gen Y to fill their skilled labour requirements,” says Teresa Carvalho, a managing director with PwC’s consulting and deals practice.
For Gen Ys, it’s not only about securing a job and the traditional incentive programs such as bonuses. They’re looking for more mentoring, career-path development and variable pay components. However, 90% of the Canadian industrial manufacturing organizations offer traditional forms of compensation. Only 44% and 42% respectively offer career-path development and mentoring.
“Understanding the changing values of the millennials and adjusting to meet their requirements should be on the agenda for Canadian industrial manufacturing companies,” says Carvalho. “Gen Ys are looking for rewards that specifically fit their requirements and where they are in life. Manufacturing executives need to think about flexible working arrangements and initiating creative programs for professional development in order to attract top recruits from universities.”