For more than three decades, the manufacturing centers that once drove the growth of the industry have been steadily shifting overseas. During the last years of the 20th century, this shift reached a peak as factories practically disappeared from the major American cities where they once dominated the landscape and served as the backbone of middle class growth. The temptation of offshoring became too strong for manufacturing executives and decision makers to resist, and these companies determined that relocating to developing countries could cut labor costs, while taking advantage of tax breaks and sidestepping regulations designed to protect domestic water and air quality.
As companies migrated to India and China, the effects rippled through every aspect of the national economy: factory jobs became outdated and rare, product prices dropped, profits rose, wages disappeared, and consumption habits shifted dramatically.
But a few years into the new century, the pendulum began to swing in the other direction. And at this point, interest in domestic facilities seems to be on the rebound.
Manufacturing executives are seeing fewer wage benefits as developing countries begin to catch up, and at the same time, tax benefits and other incentives for companies that move offshore have started to diminish. Communication technology seemed infinite when mobile connectivity and conferencing capabilities took over the workplace…but at this point, managers recognize that changing a product order is still easier when the production facility lies a mile (instead of ten thousand miles) away.
What does this reversal of the offshoring trend mean for the future of your own enterprise? If you’re a decision maker serving in this sector of the economy, what can you do to keep up with the rapid changes taking place in your industry and the factors that are driving these changes?
The answers will vary according to your raw material requirements, your consumer base, the labor market in your area, and your ability to find and retain talented workers with the skills sets you rely on to keep your business in motion. Your future depends on one question: Will you be able to secure the workers, managers, and human capital you need in order to serve your customers and keep up with demand? If you have questions, the manufacturing staffing and recruiting experts at CSS have answers. Contact our office and arrange a consultation today.