WorkJam, the leading frontline employee engagement platform, today published new research revealing that UK manufacturers are attempting to manage growing cost pressures while maintaining workforce engagement and retention. More than half (52%) of organisations have reduced or slowed hiring over the past six months, yet employee engagement (16%) and retention (15%) remain among the sector's biggest workforce challenges. The findings are based on a survey of 142 manufacturing professionals conducted at Smart Manufacturing Week 2026.
52% of UK manufacturers reduced or slowed hiring in past six months.
76% use AI to support workforce or production operations, but only 11% at scale.
Reducing costs is sector's biggest challenge for 19% of respondents.
24% slowed recruitment in skilled production and engineering roles due to labour costs.
40% changed workforce management due to Employment Rights Bill and labour regulations.
67% rethinking how they manage operations.
Reducing costs has become the sector's biggest challenge, according to 19% of respondents. Nearly a quarter (24%) of respondents said rising labour costs and productivity pressures are causing them to slow recruitment in skilled production and engineering roles, while 23% said they are increasing prices to offset higher costs. Almost 40% of respondents said the Employment Rights Bill and wider labour regulations have already forced them to change how they manage their workforce. More than two-thirds (67%) said current pressures are leading them to rethink how they manage and organise operations, while half said cost control is now taking priority over employee experience.
While AI adoption is widespread, most manufacturers remain in the early stages of implementation maturity. More than three-quarters (76%) said their organisation is using AI to support workforce or production operations, but only 11% reported deployment at scale. Just 7% are investing in AI primarily to improve the shopfloor experience, with most organisations focusing instead on efficiency and productivity objectives.
Mark Williams, Managing Director EMEA at WorkJam, stated: "Manufacturers are currently facing difficult business decisions, but as the findings suggest, many also recognise that reducing costs cannot come at the expense of workforce capability. Engagement and retention remain high on the agenda because experienced frontline and production employees play a critical role in maintaining productivity and operational performance. Manufacturers now need to invest in technology, such as AI-powered frontline employee engagement platforms, to improve efficiency and simplify operations while continuing to provide managers and frontline teams with the support they need to do their jobs effectively."
About WorkJam
WorkJam is the frontline employee engagement platform built for manufacturing. It provides a single channel for targeted communication by plant, role, shift, and skill level, with employee self-service and AI-powered workflow automation accessible on any device, and labour compliance built into the architecture. Some of the world's largest manufacturers rely on WorkJam to strengthen culture and become a workplace of choice by reaching the right employees with the right information.
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