How the Paycheck Protection Program (PPP) Can Bolster Manufacturing Productivity During COVID-19


41% of industrial manufacturers ranked the reduction in productivity as one of their top three concerns related to COVID-19.

Today, many manufacturing facilities are completely closed to help mitigate the spread of COVID-19. The looming financial impact and potential global recession are top of mind for the industry, followed by the effects on the workforce and productivity loss.

Business closures have hit the manufacturing industry particularly hard because many manufacturing jobs can’t be done remotely. Plus, industrial manufacturing demand has significantly decreased. Unfortunately, plant closures, whether full or partial, can be expected to continue. But in the meantime, many manufacturing businesses are getting some financial relief from the Paycheck Protection Program (PPP).

The Paycheck Protection Program guarantees loans for more than 108,000 manufacturing businesses

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program (PPP) was created. The PPP is defined by the U.S. Small Business Administration as a “loan designed to provide a direct incentive for small businesses to keep their workers on the payroll” and specifies that all loans will be forgiven “if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.”

While there have been some disruptions in the application and funding processes, so far over 2.2 million loans have been guaranteed for small businesses across all sectors, totaling over $366 billion in funding. The manufacturing industry has been one of largest PPP recipients to date with $40.9 billion in approved funding going to over 108,000 businesses.

PPP Tree map

Source: IBISWorld

The PPP will lessen financial impacts and can bolster productivity, but manufacturers will need to consider new approaches

The financial relief offered by the PPP is great news for many business owners, engineers, and production workers employed by the manufacturing industry. However, the stipulations of the PPP loans make some things a little tricky.

Using PPP funds to pay for rent and utilities is straightforward. But in order for PPP loans to be forgiven, businesses are expected to keep all employees on the payroll for eight weeks. This poses a notable challenge since many manufacturing roles are required to be carried out on-site.

With some creative planning, manufacturing businesses that have received or been approved for PPP loans can use this funding as an opportunity to maintain some level of productivity, even as plant closures and social distancing continue.

While facilities are still closed or as they ease into reopening, here are some ideas from OSHA and others that can help manufacturers support productivity.

  • Have employees maintain the recommended six feet of distance from each other whenever possible.
  • Implement flexible working hours and/or stagger shifts to reduce the total number of employees at the plant at one time.
  • Encourage employees to wear personal protective equipment (PPE) and even reposition or build protective barriers around work stations.
  • Think critically about how typical processes can be adapted for the COVID-19 crisis (e.g., use an online system or simple checklist instead of physically punching in and out on a time clock, minimize the number of attendees or conduct huddle meetings online, etc.)
  • Consider new ways for on-site employees to continue being productive remotely, such as online training.

Online training for manufacturing employees can maintain productivity now, and increase it later.

Employees that receive on-the-job training are more engaged and more productive. In fact, studies show that training can improve productivity by 10% or more. And in today’s world, online platforms offer training that is just as robust and costs far less (in dollars and productivity hours) than traditional in-person training.

Investing in an online training solution is one of the simplest ways to keep manufacturing employees productive, on the payroll, and off-site, all while meeting PPP funding requirements. Employees can use this time to brush up on key techniques like GD&T and Design for Manufacturing. They can improve their CAD and CAM software skills to work more quickly and accurately. And upskilling now will mean that manufacturing teams can hit the ground running when plants are operating at full capacity again in the future: skills will be sharpened, faster techniques will be memorized, and fewer errors will occur.

And while the Paycheck Protection Program doesn’t cover training expenses, the Workforce Innovation and Opportunity Act (WIOA) does, and it’s easy for businesses to apply and receive funding quickly. Plus, the CARES Act is currently giving states even more flexibility in granting WIOA funding.

LEARN MORE: See how your business can pay for online training with WIOA grants

Claire Juozitis
About the Author

SolidProfessor commercial content writer and unironic classic rock record collector