Putting Talent at the Centre An Evolving Imperative for Manufacturing 2025

Overburdened supervisors Supervisors are eager to help people develop, but they’re finding that they’re able to dedicate less than a third of their time to people leadership, which includes activities related to coaching and employee development. The majority of their time is dedicated instead to individual contributors and administrative efforts.9 Meanwhile, employees cite feeling valued by their manager and having a sense of belonging as two of the most important factors impacting their decisions to stay at a company. Middle managers, in particular, are struggling, with approximately 40% of them reporting burnout – the highest rate of burnout reporting among all job levels.10 This is being reflected among their reporting workers, too: 31% of workers say they are reporting to uncaring and uninspiring leaders. Where managers spend their time, by percentage FIGURE 4 Average share of working time spent in each area, percentage of respondents Non-managerial work Strategy-focused work Talent and people management Individual-contributor work Administrative work23 1828 31 Source: McKinsey Global Survey of middle managers, 706 middle managers, 29 March-8 April 2022. Insufficient rewards, recognition and incentives Wage growth has outpaced inflation. In fact, in 2022 and 2023, it peaked at roughly 8% annualized. In 2024, wage growth has remained around 4%.11 However, additional compensation is not enough to keep frontline workers in their roles. There are two reasons this is true. Firstly, while wages have grown in production roles, they’ve also grown in other sectors, which has incentivized workplace switching and contributed to instability. In cases where wages are below the living wage – which remains the case for many frontline positions – the incentive to switch is even stronger. Secondly, as mentioned above, it’s about more than just wages. Pay matters – indeed, McKinsey analysis from October 2024 indicates that 41% of workers feel their compensation is insufficient.12 The dollar amount is transactional, and it is table stakes. Beyond this, non-monetary factors play in, and the performance of frontline workers has to be supported by things that go beyond the transactional: recognition and appreciation. When workers consider leaving a company, a contributing factor is often not feeling valued by their managers or the organization as a whole. 9 Putting Talent at the Centre: An Evolving Imperative for Manufacturing