Impact of COVID-19 on Human Resource Crisis in the Manufacturing Industry

Impact of COVID-19 on Human Resource Crisis in the Manufacturing Industry
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Summary
This report aims to examine the impacts of COVID-19 on the human relation crisis emerging in the UK’s manufacturing sector. The report analyzed the manufacturing industry statistically and pinned essential information to identify improvement and process gaps. The analysis conducted a thorough literature analysis to understand the root causes of problems emerging in stabilizing human relations in the UK’s manufacturing sector. Besides, the performed research identified investments made by the subsectors to mitigate the effects of the pandemic on human relations. Lastly, strategic recommendations are made after concluding the analysis to improve the existing situation in the UK’s manufacturing sector. Table of Contents Summary. 2 Introduction. 4 Discussion. 5 Talent Acquisition. 5 Reduced Working Hours and Low Outputs. 6 Training and Development (T&D) Challenges in Remote Working Environment 8 Redefining Modern Business Practices. 9 Employee Well-being and Workplace Safety. 10 Conclusion and Recommendations. 12 References. 14
Introduction
The COVID-19 outbreak introduced a global paradigm shift in different industries. The United Kingdom (UK) experienced similar challenges from the pandemic effects, particularly from labor management and talent relations perspectives. The UK economy is service-based, providing technological solutions, software, and other services to other countries and local businesses. UK’s gross domestic product (GDP) relies heavily on service-based economic activities. However, the manufacturing sector in the UK has equal significance while contributing to the GDP. In FY2022, the British manufacturing sector contributed GBP183 billion to the GDP. The sector generated 2.5 million employment opportunities for local and international talents. Besides, the manufacturing sector offered a 12% rise in wages, the highest recorded compared to other sectors (MAKEUK, 2023). UK’s manufacturing sector is equally relevant to the economy by creating jobs for different talents and offering high wages to households.
Nonetheless, UK’s manufacturing sector has equal relevance in other dimensions. For instance, the manufacturing sector contributes 51% of total exports of tangible goods produced by the UK. The sector is significantly responsible for maintaining economic ties with global trading partners like the United States of America (US) and most countries in the European Union (EU). The British manufacturing sector generates 64% of revenue for businesses to further invest in research and development (R&D) activities. The business community receives 15% of investments from the manufacturing sector to expand trading activities further and continue sustainable contributions to the GDP throughout a fiscal cycle (MAKEUK, 2023). The manufacturing sector is the backbone for sustainable operations of the UK’s business community.
The report aims to examine the fundamental impacts posed by the COVID-19 outbreak while responding to the human resource crisis in the UK’s manufacturing industry. The report will reflect on different statistics and secondary data to identify the areas of improvement. The report will conclude by proposing strategic recommendations to the British government, manufacturing companies, and other stakeholders to secure continuous improvement in the post-pandemic era.
Discussion
Talent Acquisition
Talent acquisition directly impacted the COVID-19 outbreak in the UK’s manufacturing sector. In a report published by UK Parliament, job vacancies in the manufacturing sector increased to a record high during the pandemic. Vacancies in the manufacturing sector increased to 54%, while the remaining proportion is working under low productivity conditions due to COVID-19 restrictions. The overall fiscal impact on the manufacturing sector was inevitable in the economy as companies experienced a talent deficit of 1.3 million during the pandemic. The service-based industry in the UK experienced a high labor supply. Talent inflow in the service sector increased to 112% in March 2020 since the COVID-19 restrictions kept companies operative through virtual solutions (Clark, 2023). However, the manufacturing industry experienced a crisis while acquiring suitable talents for continuous operations. The reasons for talent deficits in the UK’s manufacturing sector are diverse and will continue until the regulatory bodies have relaxed pandemic restrictions in the upcoming fiscal periods.
According to the UK Parliament report, most manufacturing sector talents were deliberately inactive to serve companies. The local talents were concerned about the social and health paradigms during FY2020 since the fatality rate peaked. Besides, most talents in the manufacturing sector identified the COVID-19 outbreak as an opportunity to secure high wages and better accommodation incentives from the employer (Clark, 2023). As a result, talents practiced deliberate inactivity to increase demand and market value in the national manufacturing industry.
Furthermore, the social distancing and halts on international traveling restricted inflows of foreign workers in the British economy. Foreign workers contribute 31% of the talent pool serving the UK’s manufacturing industry. The social distancing and other constraints applied by the regulatory bodies to control the widespread virus restricted the penetration of foreign workers into the economy. At the same time, local talents were inactive in managing the economic cycle (Clark, 2023). As a result, the COVID-19 outbreak fundamentally impacted the human resource crisis in the UK’s manufacturing industry. The sector experienced disruptions from local and international talent supplies, driving the economic contributions to the national crisis in the long run.
Reduced Working Hours and Low Outputs
In February 2020, the manufacturing output in the UK was reduced to 0.3% in eight subsectors. Subsectors like automotive, food and beverage (F&B), textile, and pharmaceutical industries struggled to achieve justified outputs under the COVID-19 restrictions and deficit in labor supply (Panjwani, 2023). The impact continued until June 2021, when the manufacturing industry’s contraction in talent supply remained constant. Most subsectors exhausted inventory to produce finished goods and deliver them to the consumer market during the pandemic. The total employment rate in the national manufacturing industry remained constant at 8%. At the same time, the demand for skilled labor continued to grow due to market forces and shaping the GDP structure in the UK (Panjwani, 2023). The manufacturing industry in the UK experienced a total shock from the pandemic due to disruptions in talent supply and exhaustion of inventory while delivering finished goods in the marketplace.
According to the International Labour Organization (ILO) report, the UK’s manufacturing sector experienced a catastrophic impact due to the COVID-19 outbreak. The social distancing practices reduced outputs by 7.2% in FY2020, disrupting the financial contributions made to the GDP. Besides, the UK suffered a loss of output since reduced working hours influenced the optimum utilization of talent in the manufacturing industry (ILO, 2020). UK followed strict COVID-19 restrictions to maintain a balance between the social and economic well-being of households. However, the holistic impact on the manufacturing industry reduced overall GDP and made economic ties vulnerable worldwide.
The UK experienced further challenges in human relations during the pandemic due to reduced working hours. A fundamental challenge is the loss of economic ties established with the American and European economies. The pandemic restrictions were strict in the UK compared to the EU and the US. As a result, most trading countries shifted economic exchanges with the American and European economies to satisfy global demands for pharmaceutical and F&B products. Besides, the UK experienced another challenge since the pandemic created manufacturing opportunities for countries in Southeast Asian and African regions (ILO, 2020). Reduced working hours due to a minimal labor supply and low outputs created manufacturing opportunities for emerging countries worldwide.
Training and Development (T&D) Challenges in Remote Working Environment
ILO published another report in FY2020 highlighting the potential impacts of changing workplace practices under the ‘new normal’ notion introduced during the COVID-19 outbreak. ILO claimed that half of the global workforce would encounter a livelihood crisis since the new standard notion has transformed the demand for labor skills. Manufacturing and service industries worldwide adopted virtual solutions to continue operations under the pandemic constraints imposed by the regulatory bodies (ILO, 2020a). Approximately 1.6 billion workforces were transformed into an informal economy created during the pandemic through virtual solutions. However, the global manufacturing sector experienced potential impacts of reduced working hours and other post-lockdown measures practiced by the regulatory bodies to prevent the virus from becoming widespread. UK’s manufacturing sector experienced a significant impact of the informal economy created by virtual interactions (ILO, 2020a). As a result, most companies in the UK’s manufacturing sector experienced additional costs of T&D to retain talents and keep skills relevant in the new ordinary notion.
UK’s manufacturing industry shifted to virtual solutions immediately to cope with the chang...