August 2021 Manufacturing Roundtable Takeaways

Summer 2021 Manufacturing Virtual Roundtable KEY TAKEAWAYS

At the August installment of First American ’ s 2021 Virtual CFO Roundtable Series , executives discussed strategies to attract and retain labor and increasing pressures on cash flows from wage compression , raw material prices and customer payment terms .
BIG IDEAS
P When building training programs with colleges and vocational schools , attendees agreed that offering payment for the work completed should be enough compensation to attract the right candidates to your jobs .
P There was a consensus among the group that despite bonuses being paid to new employees and the increased time and energy it takes to train them , most tenured employees are willing to make the effort because their current workload is too great .
P Attendees agreed one of the main obstacles to new automation projects is the inability to attend physical trade shows and compare the newest products and technologies .
CHALLENGE
Manufacturing financial leaders are experiencing pressure on all sides . From raw material , shipping and freight price increases , to customers requesting longer payment terms , or even paying late , cash flows are being stretched in every direction .
CHALLENGE
Attendees shared a variety of ways they are trying to build a bench of skilled labor and retain these employees past the “ training and ramp up period ”. Many are facing a competitive wage environment and experiencing high turnover .
SOLUTION
Attendees shared that adjusting payment terms for customers that consistently pay late or require longer payment terms is becoming commonplace . This helps manufacturers keep cash flow free and mitigates the effect of “ financing ” payments for both vendors and clients .
SOLUTION
A few attendees shared their success in working with local colleges and vocational schools to build training programs . Another strategy that was shared is adding referral and retention bonuses both timed out to pay over 90 days to increase the employee ’ s loyalty and investment in the job .