7 HR Trends in the Manufacturing Industry

At the turn of the century, the year 2000, the manufacturing industry employed 17.2 million people in the US. As of September 2025, that number was at 12.7 million, a 26% decrease.

This drop represents an increasing talent gap that may be developing into a full-blown workforce crisis. As automation ramps up and veteran workers retire, HR leaders are under pressure to fill roles, build skills, and keep teams engaged on the shop floor.

Why does it matter? Because manufacturing can’t run without people. And HR teams are on the front lines being asked to solve this complex problem (and others) with limited resources.

Hiring and compliance are more complex, burnout is climbing, and keeping on-site workers engaged in an increasingly remote work environment requires more than higher salaries

We talked with HR leaders in manufacturing and uncovered the seven trends impacting HR in manufacturing. Keep reading to get advice on how your HR team can adapt and overcome these challenges.

*Editor’s Note: Quotes have been lightly edited for clarity and concision.

1. Technology and automation

Innovation has always driven the manufacturing industry—from the steam engine to assembly lines to automation—and today, AI is redefining what that means.

What used to be slow, manual, or paper-based processes are now being replaced with smarter systems, with 72% of manufacturing leaders saying they’re using AI to reduce costs and increase operational efficiency.

One leader shared, “I’m a big believer in AI. It would be great to use it to help with employees asking questions to get quick and easy answers to repeated sorts of benefits questions.”

Others see automation as a necessary evolution: “AI is going to play a lot of roles. I don’t see it as a threat but as a companion because it’s going to help change the landscape of how we do work.”

That optimism is real—but so is the uncertainty. For every team eager to embrace new tools, there’s another worrying about the loss of personal touch.

“I don’t think technology has all of the solutions for all people things,” one respondent shared. “There’s a bit more nuance that AI doesn’t quite pick up on yet.”

So how can you help your employees embrace rather than reject new technology? Here are three strategies HR pros mention:

• Communicate clearly about how automation will impact day-to-day work to reduce employee fear and uncertainty.
• Provide upskilling opportunities to help employees evolve with new tools.
• Target automation initiatives on what’s causing employees the most stress or negatively affecting their health.

The goal isn’t to choose between people and technology. It’s to use technology in ways that free people up to do more meaningful and strategic work.

In HR, here’s how your team can use AI as an ally:

• Create clear AI policies, so your team knows how to use it safely and ethically.
• Use automation to offload repetitive tasks, like answering employee questions about benefits.
• Clearly delineate which responsibilities still need a human, e.g., employee management, workplace culture, interpersonal relationship.
• Quickly analyze and find insights in large datasets for tasks like resource planning, budgeting, and forecasting headcount.

2. Talent acquisition and labor shortages

Hiring is a top challenge for HR teams across industries, but it could be hitting a breaking point in manufacturing. The net need for new manufacturing employees is expected to hit 3.8 million by 2033, but nearly half of those roles may go unfilled if the industry can’t close the skills gap.

That gap is already showing up on factory floors. HR leaders say recruiting is “especially difficult for skilled roles,” with hiring often slowed down by complex, security-driven processes. The result? Open positions drag on, production slows, and burnout builds.

To stay competitive, companies are rethinking how they recruit in the following ways:

• Expanding outreach through college and trade-school partnerships
• Increasing compensation for in-demand roles
• Using structured recruitment strategies and benchmarking to guide offers

3. Employee wellbeing and burnout

Job burnout hit an all-time high in 2025, with two-thirds (66%) of US employees reportedly burned out, with Millennials reporting the highest rates (83%), followed by Gen Z (81%) and Baby Boomers (49%).

The reasons cited for this flare-up include:

• Stress over more work to do than time to do it (24%)
• Not enough resources or proper tools to do the job (24%)
• Economic stressors (20%)
• Work overload due to labor shortages (19%)

75% of our survey respondents said managing employee wellbeing (e.g., mental health, burnout) is a top challenge. As one respondent explains, wellness programs are difficult to implement because “the needs and wants are very different across the workforce.”

Here are some of the strategies these HR pros put at the top of their list:

• Revamping benefits offerings, especially looking at what’s most valuable to employees (family leave policies, family health insurance coverage, health insurance, dental, and vision)
• Holding health clinics for on-site workers
• Promoting wellness programs to help employees feel better supported
• Conducting regular engagement surveys to identify burnout early
• Emphasizing clear, consistent communication—especially during times of organizational change

4. Compliance and safety

BLS data show a decrease in fatal work injuries for “production occupations,” from 280 in 2023 to 238 in 2024, which accounts for roughly 5% of total recorded fatal workplace injuries in the US for 2024. Meanwhile, a San Diego-based law firm crunched the numbers and predicts that deaths in the manufacturing sector will continue to drop as automation reduces exposure.

However, even with programs and advancements in place, enforcement is uneven. “It’s hard to manage when you have people in leadership positions on the shop floor and in the plant who aren't necessarily on the same page,” said one of our respondents.

So what can HR teams do to help maintain consistency?

• Make sure leaders are aligned on and understand safety standards.
• Train frontline managers on safety and compliance standards, as well as on how to be good leaders.

5. Cultural and language barriers

Manufacturing plants are some of the most diverse workplaces in the country. Diversity can be a major strength, but only if it’s managed with intention. Without clear strategies in place, cultural and language barriers can quietly—but significantly—impact your business.

These barriers can do damage in the following ways:

• Derail safety protocols.
• Slow down communication.
• Create confusion.
• Erode trust across teams.

And they put HR on the front lines of compliance risks, morale issues, and turnover.

Effective communication strategies and employment policies make the difference. Here are some tactics your team can deploy:

• Make sure you have accurate and well-documented legal forms for all employees.
• Hire bilingual team members and frontline leaders.
• Translate key materials like handbooks, safety instructions, and benefits information.
• Offer cultural sensitivity training for managers.
• Keep communication localized and inclusive, especially during onboarding.
• Support psychological safety by reinforcing that HR is a resource, not a threat.

These tactics still require a delicate hand. One HR professional shared their team’s explicit hiring goals: “We focus on hiring people who are multilingual—especially in Spanish—because it’s the most common second language among non-English speakers.”

But language alone isn’t enough. It’s also critical to be mindful of culture, as another pro stressed: “It’s important to ensure managers actively listen to employees from different backgrounds.”

6. Retention of on-site workers vs. remote workers

While many industries have embraced remote work, manufacturing remains firmly rooted in on-site roles. For HR, that creates a unique retention challenge: competing for talent against industries that offer more flexibility.

To retain skilled on-site workers, companies are rethinking how flexibility shows up on the floor. Here’s what they’re doing:

• Offering financial incentives to make on-site roles more competitive with remote options
• Allowing hybrid work for roles that don’t require hands-on or on-site work
• Improving support and communication by putting HR representatives directly at factory locations
• Creating a sense of purpose by helping employees understand the broader company's mission, even in strictly on-site roles

With 62% of HR VPs struggling to implement RTO policies generally across industries, it’s important for HR pros in manufacturing to rethink how they support and retain on-site talent. Otherwise, they risk losing their workforce to industries that can offer hybrid perks and better work-life balance.

The companies that succeed will be the ones willing to redesign the on-site experience to meet employees where they are and give them a reason to stay.

7. Unions and labor relations

Despite US federal workers losing collective bargaining rights, union activity is steadily gaining traction across the US as workers organize to win collective bargaining negotiations:

• In 2025, 10% of US wage and salary workers were covered by a union contract.
• The International Association of Machinists and Aerospace Workers (IAM) union secures an immediate 14.25% wage increase among other provisions after an 18-week strike.
• United Auto Workers (UAW) members negotiate a wage increase of up to $3/hour with Challenge Manufacturing.

HR is at the center of these negotiations and can prepare by:

• Proactively strengthening relationships with employees
• Benchmarking compensation and benefits to stay competitive
• Preparing leadership for conversations around representation and organizing rights