The manufacturing sector is under increasing regulatory pressure. As cyber criminals are more actively targeting the industry and compliance regulations are tightening in areas like supply chain due diligence and worker safety, staying in business is getting harder. This heightened regulatory scrutiny is resulting in more fines and higher penalties, which are becoming increasingly difficult to absorb, too. With the average price tag of a single violation now ranging from $78,000 to approximately $1.1 million, compliance has become a strategic imperative for manufacturing leaders to avoid common regulatory oversights and operational risks such as data breaches and physical events that routinely plague the industry.
According to new data from our latest research, The Current State of the Global Manufacturing Workforce 2025 report, manufacturing leaders agree that both a robust, scalable compliance framework and workforce-focused technology can strengthen and simplify their compliance efforts. In practice, however, only 39% of leaders have a technology stack that can support their local and global compliance, align with regional labor laws, union regulations, company policies and procedures. Yet, if businesses fail to meet these regulatory requirements, they face severe penalties and even legal action, underscoring that action must be taken now, before it’s too late.
The growing complexity of compliance and its effects on the industry
Manufacturing leaders who run global organizations with dispersed operations in different countries and regions face significant challenges in terms of balancing compliance, safety and meeting business objectives. Although technology can be a compliance enabler and support standardization in practice, most respondents said they lack an adequate solution that meets their needs. This is despite the majority (88%) indicating that workforce technology could be what is needed to support their global compliance standardization, suggesting that there is something holding them back.
The high cost of compliance is undoubtedly taking its toll on manufacturers, but it’s also diverting budget away from other critical areas. According to a new study from the National Association of Manufacturers, industrial leaders would reinvest 86% of their compliance budget in other deserving business or employee initiatives if they could. Additionally, compared to other industries, manufacturers suffer from a disproportionate share of the regulatory burden. For example, small manufacturers with only 20 employees must absorb more than $1 million in compliance costs, which is a significant amount for any small business.
The recent introduction of AI has also added considerable strain on compliance. Although cybersecurity and data privacy concerns remain top regulatory challenges manufacturers face, now AI is also adding fuel to the fire, triggering heightened scrutiny and regulatory pressure to the industry worldwide. The vulnerabilities associated with AI, along with operational and workforce risks, are contributing to the growing unease of industry leaders surrounding how to keep their business compliant.
The top 3 strategies your manufacturing business should adopt to meet compliance head on
Today’s complex compliance landscape does not afford leaders to delay prioritizing compliance-related spending, given the critical nature of meeting regulations and avoiding breaches. Yet, there are ways to improve compliance confidence to meet critical regulations and standards. We recommend the following three strategies to stay ahead:
- Leverage scalable compliance technology: Innovative workplace solutions can offer the answer to compliance complexity, providing unprecedented flexibility and the ability to effectively manage global operations no matter its location. Most importantly, these workforce technology solutions can support alignment of international standards with local labor laws and regulations, helping to support robust compliance across all regions and countries.
- From antiquated to automated compliance: Automation can not only simplify and automate compliance, but it can also minimize human errors and is cost-effective, saving between 4.8 million EURO and up to approximately 178.6 million EURO for large organizations in overall cost benefits. Automation combined with a right-fit workforce strategic platform significantly reduces risks, prevents costly fines and adapts to regulatory changes, as well as enabling real-time monitoring and reporting.
- Uncover data-driven insights: Manufacturers can leverage new valuable data from their strategic workforce platform to improve and support informed decision-making and boost operational efficiency. These data-driven insights can be used to transform operations, workforce management and support compliance efforts, even contributing to reinforce a culture of compliance within the organization.
The future: a centralized, flexible system, aligning with local and global labor deployment
Our data reveals that, while there are several predominant compliance manufacturing challenges, such as the significant disruption caused by adopting modern technology, skills gaps and new compliance requirements, there are advanced workforce solutions available to empower industrial leaders to solve these issues. Now, they can overcome these mission-critical obstacles by leveraging a dynamic platform that offers automation of compliance steps, such as accurately tracking time and attendance, scheduling in accordance with labor laws, managing certifications and training and assisting with proper recordkeeping.
By removing manual tasks through this centralized, flexible system, documentation becomes streamlined and human errors are reduced to transform workforce management, empowering leaders and teams to achieve greater efficiency and compliance. The path towards compliance standardization, globalization, and alignment with labor deployment, both global and local, is not only possible but a non-negotiable in today’s highly regulated environment.
To learn how to pivot from reactive to proactive compliance and how to apply these practical, innovative strategies and more, read our report.