Putting Talent at the Centre An Evolving Imperative for Manufacturing 2025

It is not necessary to excel in all six talent capabilities to succeed, but the analysis found that among companies leading on talent, all six capabilities were mature – with “spikes” in the areas that made most sense for their context. Indeed, a crucial first step in developing talent investment strategy is understanding the workforce in the context of the site. A company or site seeking to operationalize frontline talent investment should first perform a diagnostic that will inform its direction. This requires taking a holistic look at the labour market(s) where it operates to understand local labour dynamics. The talent imperatives show that companies cannot standardize their approach to talent in the same way they standardize their machines and production systems across production sites. Previous research published by McKinsey in collaboration with the World Economic Forum13 found that understanding local labour market conditions is critical to determining an appropriate strategy. The research suggests there are four types of environments.1.2 Understanding your unique workforce Understanding local talent market conditions can help leaders make better talent investmentsFIGURE 6 Invest in stability Focus on identifying a target talent segment and creating tailored value propositions by selectively investing in aspects that improve loyalty in that segment (e.g. childcare services, language training, corporate housing) and transparent talent development (e.g. individualized career maps, apprenticeship programmes, pay-forward compensation and benefits plans) to attract and retain talent for the long term Invest in distinctiveness Focus on selective investments that balance increasing productivity and creating a best-in-class working environment (e.g. modern facilities, Fourth Industrial Revolution automation capabilities, flexible work arrangements, partnerships for technical training programmes) to attract and retain top talent from the growing market Invest in productivity Focus on deploying effcient processes and advanced technologies (e.g. artificial intelligence, automation, robots and cobots, augmented reality) and developing a workforce with advanced skills and capabilities to get the most out of these advanced production systems End-product manufacturing Manufacturing of end products using fabricated or semi- fabricated products Invest in transition Focus on assessing strategic reasons to operate in the local context, partnering with institutions to reinvigorate local demand (e.g. governement funding or policy change, development of innovation centers) and preparing the organization for a new generation of talent (e.g. succession planning or aprenticeship programmes) to support the transition of the local manufacturing environmentDeficit Projected labour supply-demand balance Surplus Projected labour supply growthIncreasing DecliningKey performance indicator (KPI) improvements Source: McKinsey & Company. 12 Putting Talent at the Centre: An Evolving Imperative for Manufacturing