How Tariff Uncertainty is Reshaping Manufacturing Workforce Strategies

Over the past four months, there have been no fewer than eight changes to U.S. tariff policies. So it’s no surprise that this tariff uncertainty has sent shocks across both domestic and international manufacturing markets:

• Rising import and pass-through costs
• Supply chain diversification, with nearly 40% of manufacturing CFOs planning to accelerate new purchases to guard against disruption
• Production planning delays in the face of complex investment decisions
• Strategic workforce planning, including reshoring and reduced hiring plans

In the wake of ever-changing regulations and dynamics, it can be difficult to make informed workforce decisions. Should you offshore or reshore? Should you ramp up hiring or pump the brakes? Or do you need to rethink your approach to your manufacturing workforce altogether?

Here’s how we’re thinking about tariff uncertainty right now, plus our best advice to help you adapt your workforce and stay competitive in 2025 and beyond.

How U.S. tariff policies have evolved this year

This year has seen near-continuous changes to U.S. tariff policies. Some of these announcements were expected, but others have taken the manufacturing sector by surprise. Here’s a brief timeline of what’s happened so far:

If your head is spinning from reading that timeline, you’re not alone. Regardless of what you think about the tariff policies, there’s no question that the change and uncertainty makes it difficult to plan for the future and make strategic manufacturing decisions.

Key factors to consider when making manufacturing workforce decisions

For the last 50 years or so, manufacturing businesses have made decisions assuming a relatively stable environment. The Covid-era disruptions of supply chains and other processes upended this reality. Now, tariff uncertainty has exacerbated that trend.

When making key workforce decisions, manufacturing leaders need to consider a number of critical factors:

• Supply and demand are in flux, which predictive forecasting is essential to maintain the workforce levels that can meet production demands
• Manufacturing labor shortages are still a critical concern, which means you need to invest not only in workforce acquisition, but also training and upskilling to prepare your people for the changing face of manufacturing work
• Both rising costs and fluctuating demand may require a more flexible approach to staffing—like contracting, contingent, RPO, or MSPs
• Risk management and scenario planning should be an integral part of managing your workforce —including contingency plans to maintain resilience in the face of multiple tariff and global economic scenarios
• Consider how digital tools can streamline your workforce—over 80% of large manufacturers are using tools to optimize scheduling and operational efficiency
• Always keep an eye on costs, productivity, and ROI, and reallocate resources where necessary

How to make strategic workforce decisions amid tariff uncertainty

With those factors in mind, let’s dive into some practical tips you can use to remain competitive and resilient in 2025 and beyond.

1. Cross-functional scenario planning

Tariffs don’t just affect HR—they impact the whole organization, from operations to finance to supply chain teams, etc. That’s why it’s critical for manufacturing leaders to engage in cross-functional scenario planning to understand the broad impact of tariffs on the business as a whole. From there, leaders can anticipate various outcomes and tailor their workforce responses accordingly.

For example, one of the tariffs’ stated goals is to reshore manufacturing production and talent. However, given that the U.S. is already facing a looming deficit of 1.9 million manufacturing workers by 2033, meeting this goal is easier said than done.

If reshoring is indeed the ideal response to these tariffs, then manufacturing leaders need to invest in aggressive recruitment, training, and capacity building to meet demand. This requires strategic, collaborative effort across the organization to bring to fruition.

2. Upskilling, reskilling, and talent pipeline development

Not only does the current manufacturing talent deficit present a challenge for workforce planning, but other disruptions necessitate more upskilling, reskilling, and pipeline development:

• Rapid adoption of automation, AI, and digital transformation (i.e. Industry 4.0) that are shifting the focus from manual tasks to roles that require critical and creative thinking
• Aging manufacturing workforce, leading to a loss of institutional knowledge and experience
• Growing need for workers skilled in IT, operational technology (OT), and cybersecurity to respond to a more connected and data-driven sector
• High levels of innovation among competitors, requiring a more agile and adaptive workforce

As the role of the manufacturing worker changes over the coming decades, it’s critical for companies to  aggressively train and build talent pipeline—starting now. Otherwise, you could end up missing the boat and losing ground to more innovative competitors.

3. Flexible and adaptive workforce planning

In the face of high levels of uncertainty, manufacturing orgs are starting and stopping projects, revising previous workforce plans, and even going so far as to reframe their global strategies. Over a third of companies expect headcount reductions, while the rest are waiting for more stability before moving forward.

The reality, however, is that if you wait to invest in growth until the market stabilizes, you’ll come out of the storm behind your more innovative competitors. A better approach is to engage in flexible and adaptive workforce planning, which can involve using analytics and predictive tools, as well as more flexible talent acquisition frameworks.

One example of these frameworks is a managed staffing program (MSP) with a staffing partner like PEAK.  We use cutting-edge technology to enhance procurement and simplify the logistics of optimizing, managing, and growing a dynamic roster of motivated people. This helps you attract talent fast, while remaining flexible in the face of market uncertainty.

Final thoughts on navigating tariff uncertainty in 2025

Tariff uncertainty isn’t going away anytime soon. Rather than wait for the waters to calm, your manufacturing organization should press ahead—but in an agile, adaptive, and smart way.

The best and most efficient form of workforce management is to partner with an MSP provider, like PEAK. By leveraging our deep talent networks + cutting edge technology, we can create a flexible solution that fits your needs and keeps you agile over the coming months.

Want to learn more? Schedule an MSP consultation with our team today.