How to combat rising labour costs in the metalworking industry

Offshore oil & gas labour costs

In many of today’s industrial markets where automation hasn’t taken hold, labour is one of your most valuable resources. Without a skilled workforce, you can’t function. But recently skilled labour has become scarce just at the time when it’s in greatest demand.This imbalance in supply and demand has driven labour costs up, meaning that many of you face a dilemma: leave posts empty due to the difficulty in recruiting employees with the right skills or increase your outlay by paying higher wages to try to attract the best people.

As many of you cannot afford to choose the former, the workforce clearly represents an increasing outgoing in many labour-intensive industries. Those of you in areas such as general metal fabrication, oil rig building and repair, rail, container and pipeline manufacturing employ vast teams to weld, grind and cut all day long, and these combined salaries can soon mount up to significant costs, which can have an impact on your profitability.

Substantial costs

In the EU, the average hourly labour cost in 2017 was estimated at €26.80. Yet this hides the great variation between the costs in member countries, with much higher figures in Scandinavia and generally lower ones in Eastern Europe.This is further underlined by the results of the Labour Cost Index (LCI), which shows the total cost on an hourly rate of employing labour within the European Union; effectively the cost pressure of labour costs on businesses’ bottom line. According to the LCI in March 2018, hourly labour costs in industry rose by 2.3% in the fourth quarter of 2017 compared with the same period of 2016, with the main contributing factor being a rise in wages and salaries of workers.This means that the already significant cost of labour is still rising.

In this context, it’s clear to see why many of you are eager to find ways to save time and increase productivity, without needing to resort to more labour. Labour costs can contribute up to 65%of overall outgoings, so how can you save time and increase productivity without hiring more people?
 
Norton Quantum3 wheel

Improved efficiency

When it comes to productivity, it’s all about working smarter not harder, and this can often be achieved by improving the efficiency of your tools. Norton Quantum3 is is our best-in-class solution for grinding, designed with heavy industry in mind to improve efficiency and increase productivity when you need it most. The wheel itself utilises the Norton Quantum3 technology, with ceramic grains to maximise the effect of the grinding operation. The proprietary shape of the grains allows them to stay sharper and micro-fracture more uniformly even under low pressure or low angles. This ensures that Norton Quantum3 achieves extremely high material removal rates and substantial durability when compared to other traditional products, such as aluminium oxide wheels. In this way, the same workers can do twice the work in the same time to increase business activity or the same work can be done in half the time; in both scenarios, the right tools can help to reduce labour costs.

 

What’s more, with Norton Quantum3 longer product life is achieved through an exclusive strong bond and better grain retention than competitor wheels. This means that fewer wheels are needed, reducing overall process costs and time lost through wheel changes to further enhance the labour cost savings and increase your profitability.

 

Real cost savings
Norton Abrasives recently worked with an offshore company in Northern Europe, where it was clear that labour costs were having a serious impact on the bottom line. Working with them to understand their processes, equipment and workforce, we discovered that the company could make a number of savings. By switching to Norton Quantum3 grinding wheels, the offshore business could cut the number of wheels they needed every year from 20,000 to 9,000. While this represented a significant reduction in the cost of material outlay, it also contributed to the biggest saving of on average €180,000 every year in labour costs. Thanks to the Norton Quantum3 grinding wheel, their team could do twice the work in the same time, allowing the company to scale the business to increase profitability without needing additional workforce, which would eat into their revenue.5

Operator safety

Once you have the right workforce and found the right tools to increase efficiency, you want to keep your employees safe. The Norton Quantum3 grinding wheels offer greater comfort for the user in very rough applications through reduced vibrations, decreasing hand fatigue. This ensures that operators can carry out the work comfortably without losing productivity to meet EHS requirements and combat hand arm vibrations (HAV) while still meeting business targets. The wheel also offers greater control so you can be more precise and achieve greater accuracy whatever your application. Watch our video to see just how much we’ve lowered the vibrations!

 

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So if you’re struggling with rising labour costs and would be interested in hearing about how we can help you to get them under control, please contact us or speak with your local sales representative.

 

 

1 http://bruegel.org/2018/01/the-ever-rising-labour-shortages-in-europe/

http://ec.europa.eu/eurostat/statistics-explained/index.php/Wages_and_labour_costs

http://ec.europa.eu/eurostat/statistics-explained/index.php/Labour_cost_index_-_recent_trends

According to proprietary tests by Norton Abrasives in Q4 2017

According to proprietary tests by Norton Abrasives in Q4 2017

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