By Jerry Murphy, partner-in-charge of the manufacturing and distribution services team at Sikich
Manufacturers and distributors have overcome many challenges during the past year. In 2020, the industry led the charge in navigating how to safely keep facilities open. And, many shifted production to support COVID-19 efforts.
Yet, amid these challenges, manufacturing and distribution leaders are hopeful. Conducted in March, the Sikich Industry Pulse revealed that industry executives are optimistic about the coming six months and positioning their companies for growth in a redefined market. Their hope is coupled with the reality of continued hiring challenges and a heightened focus on validating and protecting their data.
Below is an overview of the Pulse findings and what they could mean for the industry’s outlook.
Challenges filling open positions despite loosening restrictions
56% of the Pulse respondents plan to increase their workforce in the next six months, but only 5% are completely confident in their ability to do so. Federal unemployment benefits have been bolstered by additional payments from states, making some individuals less inclined to immediately jump back into the workforce. While some states have begun to dial back extra benefits, manufacturers will have to get creative in their recruitment and retention efforts to keep up with growing demand.
Who’s going to take over when boomer business owners hang up their hats?
Manufacturing and distribution executives said their business succession plans remained largely unchanged (70%) as a result of pandemic conditions. Many manufacturers were already considering selling part or all of their business in the near future, prior to the pandemic. The M&A market is hot; manufacturers that are not currently considering their business’ next evolution may want to revisit their plans.
Beware of ransomware attacks
More than half of manufacturers and distributors experienced at least two cybersecurity events in the past 12 months, with top incidents being email phishing scams (81%), unemployment fraud (42%), and ransomware (9%). And, these are only the cyberattacks that manufacturers are aware of. A ransomware event has many lasting ramifications—permanently losing critical data, exposed sensitive customer/employee info, paying a hefty ransom to recover data, etc. These attacks are no joke.
Data confidence growing
Nearly three quarters of respondents are fairly or completely confident in using their existing data to make business decisions. Data-backed decisions are vital to company growth. The pandemic forced many companies to rethink their existing systems, website platforms and more to virtually interact with their team, dealers and customers. This switch to digital gave companies more data, which in turn allows them to uncover additional insights to support business decisions.
Stay tuned
The Sikich Industry Pulse surveys manufacturing and distribution executives from across the nation multiple times throughout the year, highlighting and responding to top trends as they arise. See the full Sikich Industry Pulse results here, and stay tuned for additional insights from Sikich later this summer.
