Modern manufacturing has come a long way from lines of workers performing rote tasks alongside machines. These days, robotic arms are doing an ever-increasing share of the work, reducing accidents and injuries in a hazardous environment. But the need for human minds and hands remains.
Workers engaged in transforming materials, substances, or components into products are at risk of injury from a long list of hazards, from physical exertion and contact with machinery and equipment, to long work hours, slips, and falls. In fact, according to the National Center for Biotechnology Information (NCBI), manufacturing accounts for a disproportionate number of injuries across all industries.
Manufacturers face many hurdles right now—labor shortages, supply chain issues, skill gaps, relentless regulation—but a renewed focus on domestic production and a concerted effort to diversify the workforce offer a more optimistic picture of where the industry may be headed. Between the existing challenges and the new opportunities, the manufacturing industry will have a number of workers compensation-related issues to work through this year, including:
- Rethinking traditional ways of hiring and expanding their labor pool to find workers with the right technical skills.
- Staying ahead of ever-present regulation and Occupational Safety and Health Administration (OSHA) compliance standards that are changing with the industry.
- Using technology to prevent accidents, facilitate training, and prompt positive employee safety behaviors.
In This Report: Manufacturing Trends
We created this guide as a succinct reference tool to help you stay on top of critical trends in the manufacturing industry such as:
- Loss Drivers & Safety Practices
- Safety Technology
- 2022 Outlook
This report is based on industry trends as well as our own discussions with Foresight leadership and broker partners. Keeping an open dialogue with our brokers and customers helps everyone mitigate the potentially deadly or life-altering risks inherent in manufacturing work.
Manufacturing Workforce Trends
- Jobs are tough to fill. The number of vacant entry-level manufacturing jobs continues to grow. Manufacturers find it 36% more difficult to find talent today than in 2019 according to Deloitte.
- More workforce diversity is a necessity. Manufacturing is less diverse than many industries with a makeup that is 59% male and 68% white, according to one study. Without a more diverse talent pipeline, manufacturers won’t be able to fill the jobs of the future. The skills shortage is real. 68% of manufacturers surveyed believe there is a skills shortage in the industry.
Labor Shortages and Adapting to a Changing Workforce
Two factors known to have an impact on workers compensation losses are labor shortages and shifting workforce demographics. While many U.S. industries are wrestling with these issues, the manufacturing industry could take longer to overcome them without some real effort.
The COVID-19 pandemic caused American workers to take stock in what they want in a job and prompted many to look for new roles that better fit their needs. According to a study by Deloitte and the Manufacturing Institute, many younger workers show a lack of interest in manufacturing jobs. Younger workers are gravitating to warehouse and distribution jobs not because they pay more, but because of the work/life balance they offer. Work/life balance also attracts more women —a key demographic underrepresented in manufacturing.
Robots Won’t Eliminate Labor Shortages and Skill Gaps
The labor shortage in manufacturing has several causes, including:
- Retirement, which also adds to the skills shortage
- Younger workers’ desire for work/life balance, which doesn’t mesh with how manufacturing shift work is traditionally structured
- A mismatch between where manufacturing plants are located and the local skilled labor pool
Redesigning jobs tasks so that robotic technology can reduce some human tasks could help manufacturers keep production lines going with fewer workers but doing so also demands more skilled workers.
Currently, manufacturers are having a hard time filling both entry-level positions as well as middle-skill jobs that require some technical training or applied skills. The chart below illustrates the projected job openings from 2019-2029 for some of these middle-skill roles.
Creating More Workplace Diversity in Manufacturing
Labor shortages and the changing dynamics of the workforce are inspiring manufacturers to invest in diversity and inclusion. Manufacturing lags behind many sectors in terms of diversity, but efforts are being made through organizations like the National Association of Manufacturers (NAM) to create a more diverse talent pipeline and find employees with the skills needed for the future.
Women make up only about 35% of the overall manufacturing workforce, and the ethnic makeup is predominantly white, as the chart below illustrates. However, certain manufacturing sectors rely heavily on immigrant workers: Textile, apparel and leather manufacturing is second highest in the percentage of immigrants (36%) across all industries. Food manufacturing is fifth (30%).
Regulatory Trends Affecting Manufacturers
- Manufacturing is a heavily regulated industry. The National Association of Manufacturers says the industrial sector faces 297,696 restrictions on operations from federal regulations, of which 102,734 are related to health and safety.
- Higher rates of union organizing possible. The Bureau of Labor Statistics shows union membership in manufacturing remained flat in 2020 at only 8.5%, but experts say the tide could be turning toward more union organizing.
- OSHA compliance is a top concern. Fiscal year 2021 saw over 10,000 OSHA citations among the three manufacturing codes in the North American Industry Classification System and penalty totals over $45 million.
COVID-19 Vaccination Rules Not Completely Behind Manufacturers
Even with the country trying to move on from the COVID-19 pandemic, legal experts predict that federal, state, and local governments could still impose vaccination and testing requirements on employers. Although the federal government’s vaccination requirements for employers employing 100 or more employees have been challenged in court, and OSHA’s COVID-19 Emergency Temporary Standard was stopped from implementation by the U.S. Supreme Court, new developments could occur with litigation still ongoing. If federal regulation falls apart, state and local governments could take up their own initiatives.
OSHA Inspections Could Increase in 2022
Some law firms specializing in occupational safety hazards predict that 2022 will see higher OSHA citation penalties and more inspection as the current administration increases OSHA’s budget—and that manufacturing will be one of the industries most affected.
OSHA compliance is a top concern for manufacturers as each of the Top 10 Most Frequently Cited Standards pertain to hazards that can occur in manufacturing operations. When you consider each of the Top 10 by similar groups of regulations, the five violations that have the highest number of violations and total fines were:
- machinery and machine guarding
- electrical safety
- hazard communication
- respiratory protection
Key Loss Drivers and Safety Trends
- Latest BLS data for manufacturing work-related fatalities (2020): 340 deaths—42 violence from persons, 76 transportation incidents, 10 fires and explosions, 55 STF, 50 exposures to harmful substances or environments, 106 contact with object and equipment.
- Number of incidents leading to injury or illness involving days away from work: BLS data shows 135,900 cases reported during fiscal year 2020.
Leading Causes of Fatalities
Workplace fatalities in manufacturing have, on average, steadily declined since the 1970s thanks to increased safety programs and automation of certain hazardous tasks. As the chart below illustrates, manufacturing currently ranks fifth in work-related fatalities by industry.
According to the latest BLS data, the manufacturing sectors with the highest fatality rates are:
- Food manufacturing
- Fabricated metal product manufacturing
- Nonmetallic mineral product manufacturing
- Wood product manufacturing
- Machinery Manufacturing
The vast majority of fatalities come from contact with objects or equipment, exposure to harmful substances or environments, overexertion and bodily reaction, slips, trips, and falls.
Leading Causes of Injuries Resulting in Lost Days Away from Work
According to the latest BLS data, the 10 manufacturing sectors with the highest number of worker injuries are:
- Metal fabrication
- Food processing
- Transportation equipment manufacturing
- Machinery manufacturing
- Rubber and plastics manufacturing
- Primary metals manufacturing
- Wood products manufacturing
- Chemical manufacturing
- Non-metallic minerals manufacturing
- Furniture manufacturing
Causes of injuries resulting in lost days away from work vary by manufacturing sector, but overall, the industry breaks down as shown below:
Non-fatal injuries and illnesses involving days away from work by events or exposure, 2020
Emerging Injury and Health Risks
The nature of manufacturing work presents hazards to both physical and mental health. While the introduction of technology has reduced some of these hazards, it has also brought about new ones:
- Manufacturing workers face the multi-layered stressors of demanding quotas and variable shifts, which puts pressure on employees’ personal life balance. As “essential workers,” working through the pandemic added yet another layer of stress. Read more about manufacturing worker mental health here.
- Advanced manufacturing, which involves using new materials, processes, and methods to manufacture products (e.g., 3-D printing, nanotechnology) has also introduced new hazards. In 2019, the National Institute for Occupational Safety & Health (NIOSH) began an advanced manufacturing initiative to investigate worker health implications of exposure to materials used in this type of manufacturing.
- Although the increased use of robotics in manufacturing has reduced some hazardous, highly repetitive, and unsafe tasks, robotic arms move in multiple directions, which has become a new cause of injury. Manufacturers need to account for them in their occupational health and safety plans. Read more about robotics safety here.
Characteristics of an Effective Manufacturing Safety Program
Manufacturing is a broad industry, and risks vary considerably based on the type of manufacturing and the materials, processes, and machinery used in production. An across-the-board manufacturing safety program doesn’t exist (at least not an effective one). However, certain overarching elements should exist in every manufacturing safety program:
- Training and engineering controls that address the top manufacturing hazards identified by OSHA: slips, trips and falls; collisions and caught-between injuries; equipment malfunctions; harmful substances or environments; overexertion; and hazard communication.
- Building a solid safety culture, based on accountability and behavior change should be a top priority for manufacturers.
- Taking a more holistic view of employee health and well-being, as suggested in NIOSH’s Total Worker Health® program, is another critical element. Employers should be sure to include a mental health component.
- Using safety data to produce predictive analytics has shown to not only stop accidents before they happen, but also help manufacturers remain competitive.
Leading Safety Technology Trends for Manufacturing
Technology is changing the face of manufacturing in many ways, but in terms of employee safety a few advances stand out:
- Smart Personal Protective Equipment (PPE) and the Internet of Things are improving worker safety along with productivity by identifying patterns or danger points that increase risk through the use of locating systems, smart lockout/tagout, and phone-based app alerts.
- Technological advances such as additive manufacturing (3-D printing) has brought more safety, flexibility, and efficiency to manufacturing, although exposure to materials from these processes are being studied and developments should be carefully monitored by employers.
- Advanced digital technology adoption and robotics are eliminating some of the tasks hazardous to humans, but interaction between robots and humans still presents safety concerns.
2022 Outlook for Manufacturing
American manufacturers are adapting to constantly changing consumer demands, disruptions, and fast-moving technological changes. They’ll continue to be challenged by labor shortages and the need to attract and retain talent for a new age. Tapping into a more diverse, skilled talent pool will be critical, and offering a safe place to work will help manufacturers to do so.
Technology exists today that can help manufacturers address the workforce, regulatory, and loss trends discussed in this guide:
- Inexperienced workers who engage with digital behavior-based safety tools and training available on handheld devices and in their native language learn safe behaviors faster and more effectively, reducing accidents.
- Digitized OSHA recordkeeping, incident reporting, inspections, and audits help keep employers compliant and aware of changing regulations.
- Data gathered and analyzed from wearables, digitized incident reports, and employee observations quickly identifies safety problems so they can be addressed immediately.
The prospect of bringing more manufacturing back to the U.S. is an exciting one that will improve our economy and help solve the serious supply chain weaknesses exposed by the pandemic. Worker safety tools that engage the new generation of manufacturing talent will be a critical step toward making it happen.