Workforce Management
How to Cut Manufacturing Costs and Keep Growing
Realign talent, reward smarter, and grow with a better people strategy.
October 27, 2025
Cutting Costs, Not Momentum, in Manufacturing
For manufacturers, pressure to reduce costs is nothing new. The reflex to cut costs often comes with a troubling assumption that savings must come at the expense of your people.
But that’s an assumption, not a truth. And there is another way.
Smart manufacturers are following a better path that protects both performance and progress. By rethinking how work gets done, how teams are rewarded, and where to bring in short-term expertise, manufacturers can free up capital to reinvest without resorting to layoffs.
We believe cost reduction and growth aren’t at odds. They just require a sharper workforce strategy. Below are 4 ways to reduce cost and promote growth.
1 Reallocate Reward Spend to Where It Matters Most
Many manufacturing reward systems were designed for yesterday’s pressures, but today’s challenges demand more precision.
Now is the time to scrutinize reward spend for efficiency and impact. That doesn’t mean reducing compensation. It means reallocating it where it counts most.
Start by examining:
- Shift differentials: Are they still aligned to current production priorities?
- Tool and PPE allowances: Are they standardized or inflated?
- Technology access: Are legacy reward entitlements still delivering value?
Then consider shifting from across-the-board salary bumps to targeted incentives that reward:
- Safe operations
- First-time-right quality
- Successful automation adoption
Tip:
Survey workers about which benefits they value most; perception of fairness often matters more than the dollar amount.
2 Redesign Operating Models Around Efficiency and Flexibility
The traditional manufacturing org chart isn’t always the most effective or cost-efficient way to run a plant. That’s especially true when talent is scarce and expectations are rising.
Now is the time to redesign your operating model around what work truly needs to happen and who’s best positioned to do it.
- Cross train teams to flex between production and maintenance
- Streamline shift schedules to match actual throughput needs
- Use success profiles to define changing role expectations and needed skills
Small adjustments here can reduce redundancy, increase engagement, and ensure every shift runs lean but capable.
Tip:
Identify 2–3 roles with high overtime or vacancy rates and explore whether cross-skilling could ease pressure or reduce headcount costs.
3 Use Interim Talent to Add Agility Without Long-Term Overhead
From robotics pilots to process automation and IIoT (Industrial Internet of Things) integration, new initiatives demand fresh skill sets in a hurry. Hiring full-time specialists isn’t always practical or sustainable, and could lead to necessary workforce reduction down the line.
That’s where interim talent in manufacturing makes the difference.
By bringing in project-based experts for digital, engineering, or process-improvement initiatives, manufacturers can tap high-value expertise without permanent cost commitments. Interim professionals are particularly effective for:
- Launching predictive maintenance programs
- Testing new automation protocols
- Streamlining quality assurance or logistics
Even better, contract cycles can be aligned to production phases or pilot milestones, giving manufacturers control over spend without slowing down progress.
Tip:
Create a roster of trusted interim partners with pre-cleared contracts, so you can scale up (or down) quickly based on project needs.
4 Hold On to Skills That Power the Line
When budgets tighten, you may instinctively want to pull back on workforce investment. But if you're planning for future growth, whether through automation, expanded capacity, or supply chain shifts, now’s the time to rethink where and how you retain talent.
Not all roles carry equal weight for what’s next. The most critical employees to keep close are those with in-demand skills that align with your future operations, not just today’s production goals.
To make the smartest choices with limited resources, you need to sync your talent strategy with your growth plans. That means identifying the skills that will fuel your next phase (think digital maintenance, robotics, line leadership, or advanced quality control) and looking at who in your workforce can grow into those roles.
The Importance of Upskilling and Reskilling
The good news is that upskilling and reskilling existing team members is often far more cost-effective than hiring from outside. Many of your current operators, techs, and leads may already have the drive and potential to step into those future-critical positions.
Once you identify those individuals, step up on communication and development. This is where your EVP becomes a key retention lever. If raises aren’t an option, show them their path forward. Help them see the investment you’re making in their growth, even during lean times.
Clear signals of future opportunity, combined with meaningful development, recognition, and flexibility, can go a long way in keeping your most valuable shop-floor talent engaged and committed.
“Companies are customizing and focusing on rewards to retain top performers or skill sets in short supply.” says Don Lowman, leader of Korn Ferry’s Global Total Rewards practice.
5 Invest in Technology That Pays for Itself
Cutting costs shouldn’t mean freezing innovation. In fact, selective tech investments are often the best long-term cost-savers.
Sensors that enable predictive maintenance, AI-powered process monitoring, and digital training tools reduce downtime and reliance on reactive firefighting, thereby improving labor ROI.
The key? Fund these upgrades with savings gained from operating model redesign, reward optimization, or outsourcing.
Tip:
For each proposed tech investment, model both cost savings and productivity gains. Present ROI in terms of what your plant CFO cares about, like reduced scrap, fewer reworks, or increased throughput.
Manufacturing Leaders Don’t Need to Choose Between Cost and Growth
Manufacturers are being asked to grow in a market that keeps getting tighter and deliver more with less. But the best-run plants know that the answer isn’t in slashing headcount. It’s in rethinking how people work, how they’re supported, and how capability is built.
Korn Ferry helps industrial organizations redesign workforce models that do exactly that, protecting performance today, while building capacity for tomorrow.
Want to reduce costs without compromising plant performance? Korn Ferry helps manufacturing leaders optimize workforce strategy, rewards, and operating models to fuel growth, even in tight budget cycles. Speak with one of our industrial consulting experts today.
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