Navigating the future of manufacturing: Insights from industry leaders 

Navigating the future of manufacturing: Insights from industry leaders  

In mid-October, the  Grow Minnesota! team hosted a focus group with manufacturers of varying sizes and scope, ranging from small, single-facility operations in Minnesota to large multinational companies. The member companies participated to discuss current opportunities and challenges facing the manufacturing sector.  Several key themes emerged throughout the conversation.  

Workforce development and employee retention  

Workforce remains a key concern for manufacturers. While general labor availability has started to improve, competition for skilled workers remains high. After several years of a tight labor market, companies are benefiting from implementing comprehensive strategies to address workforce challenges, including improved training programs, increased compensation packages and additional career pathway development. Several companies shared how they’ve redeveloped their onboarding strategies to accommodate different generational learning styles, including virtual and augmented reality simulations. Leaders shared a particular focus on making manufacturing environments less intimidating for younger workers and addressing workplace dynamics and expectations to build confidence and pride in manufacturing careers. 

Investments in their workforce and communities start early. Industry partnerships with high schools have expanded, including equipment donations, job shadowing opportunities, co-op programs and signing day events. The companies discussed the importance of apprenticeship programs and technical schools, but a persistent gap exists between curriculum and current industry needs, with educational content often becoming outdated by the time students enter the workforce. Companies reported that these initiatives require significant time investment before yielding results, but all plan to continue and expand.  

Operational and cost challenges  

The manufacturing sector faces significant cost pressures from multiple sources. Some participants noted that volatility in tariff policies were creating unpredictable input costs, though companies are attempting to mitigate impacts. Others mentioned utility and energy costs as another substantial concern, with one company sharing how their electricity expenses have increased approximately 50% over the past five years. Overall, these increasing expenses place local manufacturers at a competitive disadvantage compared to other states.  

Regulatory and policy concerns  

Businesses shared several policy concerns that impact their competitiveness and affordability. First, the regulatory environment presents multiple obstacles to business operations and expansion. Zoning uncertainties in transitional areas, permitting complexities and new environmental regulations create ongoing compliance challenges. The implementation of Earned Sick and Safe Time (ESST) and Paid Family and Medical Leave (PFML) was referred to as the “elephant in the room.” Leaders discussed how the new workplace regulations, while well-intentioned, have introduced operational unpredictability. Several companies reported they now plan to hire 1.5 workers per opening to maintain adequate staffing levels. While most already offered similar benefits, the mandatory programs reduce their competitive advantage in attracting talent and diminish worker accountability. The cumulative effect of rising costs and expanding regulations has made it "difficult to justify an expansion in Minnesota," according to several participants.

The Minnesota Chamber Foundation Grow Minnesota! Program plans to host manufacturing focus groups on a quarterly basis across Minnesota. If you are interested in participating and sharing your perspective reach out to Sarah Erickson at serickson@mnchamber.com

For more Minnesota Chamber and Chamber Foundation resources on manufacturing industry, check out

•  Manufacturing matters to Minnesota’s economy
   
• Tracking growth in Minnesota’s manufacturing sector this decade
   
• Costs matter