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Ever-changing tax laws, human resources and technology require companies to always be aware of the market trends in order to stay competitive. Just recently passed in 2017, the Tax Cuts and Jobs Act makes major changes that will impact all taxpayers. The labor skills gap, while not new, remains a priority for all companies in 2018. And lastly, use of automation should be evaluated before an investment is made to determine if the benefit outweighs the cost. Following are three top trends corporations should watch in 2018.
Tax Cuts and Jobs Act (TCJA)
The current tax reform is a hot topic affecting manufacturers in 2018. The key provisions manufacturers will want to pay attention to are changes relating to tax rates, interest deductions, net operating losses, expensing of capital expenditures and the Domestic Production Activities Deduction (DPAD). These changes will include both favorable and unfavorable results for taxpayers. Manufacturers will need to evaluate all changes to understand the overall impact on their respective tax situations.
Labor Skills Gap
The labor skills gap is not a new issue but should continuously be addressed. A skills gap happens when there is a shortage of hirable, skilled talent that is needed to help businesses grow. In order to stay competitive and relevant, leading manufacturers need to address this issue and effectively hire and retain workers. As a reaction to the problem, top companies have begun partnering with their communities to help foster the talent that will be needed in the future. Getting involved with technical and community colleges, sponsoring STEM initiatives and crafting their own training and development programs are some examples of this. Additionally, there are federal and state initiatives that support apprenticeship programs or possibly provide loans to companies that hire skilled workers.
Use of Automation
The goal of automation generally is to eliminate simple, yet time-consuming tasks. The proper use of automation in manufacturing is essential to staying competitive both today and into the future. Automation reduces production time, increases accuracy and decreases costs. Manufacturers will need to determine the best use of both labor and automation in order to produce optimum results. Factors that will need to be considered are the amount of investment needed (in both dollars and time), the various skills of the labor force, the scalability of various processes and the desired outcome of the various tasks.
While these are just some of the trends affecting the manufacturing industry in 2018, it is important for all businesses to stay informed in order to remain competitive. Please contact your GBQ advisor to learn more.