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What makes an industrial company stand above its peers?

28 November, 2018

Carolyn Lee
Executive Director

The needs and demographics of the American workforce are changing and, as we explored a few months ago in a white paper released jointly by PwC and The Manufacturing Institute—the social impact and workforce arm of the National Association of Manufacturers—manufacturers in all sectors industrials, consumer markets, technology and refiners/petrochemicals are striving to lead the way in creating a more welcoming and accommodating workplace. Indeed, for industrials of all sizes, diversity and inclusion (D&I) programs are not just viewed as a “nice to have” but rather a top priority for their businesses.

Moreover, there is increasing agreement that while setting the tone from the top is critical to creating a welcoming culture, clarifying expectations and achieving goals, it is also important to encourage grassroots engagement of employee groups to drive initiatives from the bottom up. This employee-led activism is doing much to change the face of manufacturers and industrial sectors such as oil refiners and petrochemical companies.

It is no surprise that, as demographics in the U.S. continue their formidable shift, employee-led engagement is helping reshape the face of manufacturing. Employee-led groups, typically called employee resource groups (ERGs), can range from small and informal gatherings to hundreds or even thousands of members organized across continents (in the case of large multinationals) and covering a wide spectrum of issues, including D&I for women, older workers, LGBT employees, ethnic or racial minorities, people with disabilities and military veterans, just to name a few.

What we found in our research and conversations with D&I leaders is that whether small and atomized or large and well-organized, ERGs share common aims and strive toward similar outcomes. They create a platform for employees to share experiences and to advocate positive change around D&I. Thus, regardless of a company’s size, structure or starting point, the collective wisdom ERGs can impart on their organization’s leadership can create value throughout the company, sparked by the very employees who are affected by D&I initiatives—thus, the bottom-to-top influence.

Organizations striving to hire or promote more women, for example—consider that in 2017 less than 30% of the U.S. manufacturing workforce was composed of women1 —might turn to their ERGs for insights and advice. Experience breeds expertise, so the best people to explain why this is, and lead companies toward solutions, are likely to be female employees in manufacturing themselves. It seems an obvious point but an important one nonetheless.

ERGs can help organizations develop more diverse leadership as well by advocating and organizing mentoring programs, and they can even help organizations articulate and communicate views on important social issues—including gender, race, sexual orientation and more. In addition, industrials will likely continue hiring more foreign-born workers, and ERGs can help ease the transition to make workplaces more accommodating for them. The latest U.S. Census showed that about 14% of the U.S. population is now foreign-born, the highest percentage recorded since 19102.

Today, manufacturers face a sea change in demographics. A looming retirement cliff and the need to attract younger workers means companies face a two-pronged challenge: retaining the current generation and recruiting the next one. Thus, the need for manufacturers as well as other industrials including refiners and petrochemicals to ensure that their employees have ERGs dedicated to their emerging needs and preferences is obvious because—as our research has shown—in a world where talent has many choices, manufacturers will benefit by making the sector a more welcoming, equitable and attractive place to work. Encouraging and supporting the creation of ERGs is one important way to help do so.

NOTE: This blog is the third in a series from The Manufacturing Institute and PwC on D&I. Check out our past two posts where we explored how executives can initiate and expand D&I at their companies and how businesses can advance these priorities, regardless of their starting point.