The 20/80 Rule: Why America’s Smartest Manufacturers Keep Only 20% Full-Time
The most competitive manufacturers in America have discovered something that traditional companies are still missing. They staff their professional workforce using a ratio that would have seemed impossible just five years ago: 20% permanent employees, 80% on-demand contractors.
This isn’t a temporary trend. This is the new standard for operational excellence.
If you’re still building your team the old way—hiring every specialist as a permanent employee—you’re burning cash, limiting flexibility, and putting your company at a severe competitive disadvantage. The math doesn’t lie, and the companies that figured this out first are leaving everyone else behind.
Learn how to build a flexible professional workforce →
The True Cost of Full-Time: Numbers Most Companies Refuse to Calculate
Let’s talk about what that automation engineer, controls technician, or project manager actually costs you when you hire them full-time.
Most executives look at salary and think they understand the expense. A $95,000 per year automation engineer seems reasonable. That’s roughly $45 per hour, right?
Wrong.
Here’s what that engineer actually costs over three years:
Direct Compensation:
- Base salary: $95,000 × 3 years = $285,000
- Annual raises (conservative 3%): $8,835
- Bonuses and profit sharing: $28,500
Benefits Package:
- Health insurance (employer portion): $45,000
- 401k match: $25,650
- Payroll taxes: $21,803
- Workers compensation insurance: $8,550
- Unemployment insurance: $2,850
- Life and disability insurance: $4,275
Overhead and Hidden Costs:
- Recruiting and hiring costs: $12,000
- Onboarding and training: $18,000
- Software licenses and tools: $15,000
- Office space and equipment: $27,000
- HR administration time: $9,000
The Real Killer – Idle Time:
Here’s the part most companies never calculate honestly. That engineer you hired for a critical project isn’t working on billable, value-creating work anywhere close to 40 hours per week.
Between meetings, administrative tasks, training, vacation time, sick days, holidays, and the periods between projects when you need to “keep them busy,” your automation professional is doing real engineering work maybe 60% of the time. Some companies see utilization rates as low as 50%.
You’re paying for 6,240 hours over three years (40 hours × 52 weeks × 3 years).
You’re getting productive work for maybe 3,744 hours.
That’s 2,496 hours of wasted salary. At the fully-loaded rate, that’s roughly $180,000 of labor cost producing zero value.
Total three-year cost: $691,463
And we haven’t even discussed the biggest risk yet.
The Risk Factor Nobody Talks About Until It’s Too Late
What happens when that hire doesn’t work out?
Twenty to thirty percent of new hires fail within the first year. When that automation engineer you spent six months recruiting turns out to be a poor cultural fit, lacks the skills they claimed, or simply doesn’t perform, you face devastating consequences:
Cost of a Bad Hire:
- Severance package: $25,000-$50,000
- Legal costs if they dispute termination: $15,000-$75,000
- Lost productivity during their tenure: $40,000-$100,000
- Recruiter fees to replace them: $20,000-$35,000
- Team morale impact: Immeasurable
- Project delays while you backfill: Often devastating
An employee who doesn’t work out can sue. They have employment law protecting them, and wrongful termination claims—even when you win—cost tens of thousands in legal fees.
A contractor or service company? You end the agreement. Clean. Professional. No lawsuit risk.
Before platforms like Automate America existed, flexible professional staffing meant dealing with unreliable temp agencies or paying premium rates to expensive staffing firms. It was a fragmented marketplace where opportunities were hidden, access was limited to insiders, and nobody worked together efficiently.
That world is gone.
How the 20/80 Model Actually Works
The smartest manufacturers realized something fundamental: you don’t need to employ every specialist you might ever need.
Here’s the model that’s taking over:
Your 20% Core Team:
These are your strategic leaders. Your plant engineering manager. Your senior controls engineer who knows every machine in the facility. Your maintenance supervisor who’s been there twelve years and knows which pump is about to fail just by listening to it.
These people hold institutional knowledge. They manage relationships. They make strategic decisions. They guide contractors and manage projects.
They are not doing the detailed PLC programming on every project. They’re not pulling cable. They’re not spending three weeks commissioning a robot cell.
They’re managing the work. Directing the vision. Ensuring quality. Making sure your 80% delivers excellence.
Your 80% Flex Workforce:
This is where the magic happens.
When you need a Siemens TIA Portal specialist for a six-month project, you bring in a contractor through Automate America. When you need three electricians for a two-week shutdown, they’re available immediately. When you win a major automation project and need five robot programmers, you scale up instantly.
When the project ends, so does the expense.
You’re not paying benefits. You’re not covering idle time. You’re not managing vacation schedules or dealing with performance reviews. You’re getting expert labor precisely when and where it creates value.
The math is simple: if you only need specialized expertise 60% of the year, why pay for 100%?
What This Looks Like in Real Manufacturing Environments
A pharmaceutical packaging facility in South Carolina runs their entire automation department this way. Their core team consists of:
- One automation engineering manager
- Two senior technicians (one mechanical, one electrical)
- One controls engineer
Four people. Permanent staff.
For their recent line expansion project, they brought in through Automate America:
- Two validation engineers (three months)
- One Rockwell specialist (four months)
- Two electricians (eight weeks)
- One HMI developer (two months)
- One mechanical designer (six weeks)
Total contractors: Seven professionals at various times.
The project finished on time, under budget, and everyone went home happy. The pharmaceutical company didn’t commit to seven permanent headcount. They didn’t pay benefits for seven more families. They didn’t wonder what they’d do with all those people after commissioning.
They paid for exactly the expertise they needed, when they needed it, and not one hour more.
A food processing plant in Michigan just modernized their entire facility using this model. Their engineering manager told me: “I used to lay awake at night wondering if I had enough work to justify my team. Now I sleep great. I know my core guys are fully utilized, and when we need specialists, they’re a phone call away.”
From Silicon Valley to the Midwest, this is how successful teams operate now. It’s not revolutionary anymore. It’s standard practice.
The Professional Contractors You’re Not Accessing
Let’s destroy a misconception right now.
The professionals in the Automate America network aren’t people who couldn’t find jobs. They’re the exact opposite.
These are automation engineers who mastered their trade, put in their 10,000 hours, and made a deliberate choice: they wanted control over their careers. They wanted to choose when, where, and for whom they worked. They wanted to work in different industries every contract—pharmaceutical one month, automotive the next, aerospace after that.
Some want to travel the world. Some want to stay local and pick their projects. All of them are bold, talented, hard-working, and reliable.
You’ll find:
- Young engineers with intelligence and guts who are building the foundation for their own automation companies
- Seasoned experts who retired from permanent work but want to keep their skills sharp with one or two contracts per year
- Skilled project managers and salespeople who land contracts then bring in Automate America professionals to execute the work
- Industry specialists who’ve seen twenty different plants and can solve problems you didn’t know existed
These aren’t your second-tier options. These are often better engineers than the ones you could hire permanently, because the market keeps them sharp. If they don’t deliver excellence, they don’t get the next contract. That’s powerful motivation.
The Training Advantage You Can’t Get From Permanent Staff
When you hire a controls engineer permanently, they learn your systems. They get comfortable with your Rockwell installation or your Siemens setup. That’s valuable, but it’s also limiting.
When you bring in contractors who’ve worked at fifteen different facilities in the past three years, they bring insights you can’t buy. They’ve seen how the pharmaceutical plant solved a similar problem. They know the trick that the automotive supplier uses to cut commissioning time in half. They remember the clever solution that the aerospace facility implemented last year.
Cross-pollination of ideas is worth more than institutional knowledge in many cases.
This is why forward-thinking companies send their core staff to skills training at institutions like Greenville Technical College in South Carolina or Michigan colleges offering industrial automation programs. They keep their 20% team sharp on fundamentals and emerging technologies.
Then they supplement with contractors who bring real-world, multi-industry experience that no training program can teach.
Greenville Technical College – Mechatronics Programs
Lake Michigan College – Industrial Technology
Contract-to-Hire: The Smart Way to Eliminate Hiring Mistakes
Here’s the strategy that eliminates almost all hiring risk:
Run a three to six month contract first. See the person in action. Watch how they work. Evaluate their technical skills in real situations, not in an interview. Assess their cultural fit while they’re actually on your team.
If they’re excellent, convert them to full-time. If they’re merely good, thank them for the contract work and move on. If they’re struggling, end the contract professionally.
No wrongful termination lawsuit. No performance improvement plan. No uncomfortable conversations with HR and legal. Just a professional conclusion to a contract arrangement.
The contractor benefits too. They get to see if they like your company, your leadership, your culture. They’re evaluating you just like you’re evaluating them.
This is trust with verification. This is smart hiring.
The Industries That Figured This Out First
Food processing operations were early adopters. Their seasonal nature forced them to think differently about staffing. You need extra capacity during harvest season, then you scale back. Permanent staff for seasonal surges never made sense.
Pharmaceutical manufacturers came next. Project-based work with strict validation requirements meant they needed specialists intermittently, not permanently.
Aerospace suppliers followed. Long project cycles with intense work periods meant feast-or-famine staffing challenges.
The automotive industry—though it represents significant work volume on Automate America—isn’t where we’re focusing this message. We’re going after the food and beverage plants, the chemical processors, the semiconductor facilities, the battery manufacturers, the distribution centers adding automation, the medical device companies upgrading lines.
Every industry needs automation expertise. Every industry faces the same math. The 20/80 model works everywhere.
Why Automation Service Companies Love This Model
If you’re an automation integrator or service company, you already understand the bench problem.
You need twelve engineers for current projects. Next month you’ll need eight. The month after that you might need twenty. How do you staff for that reality?
The old answer: keep fifteen engineers employed and pray you have enough work. Some months they’re swamped. Some months you’re paying people to organize the shop or attend training just to keep them busy.
The new answer: keep your eight core engineers and project managers. When work spikes, pull professionals from Automate America. When work slows, return to your lean core team.
This is exactly what the most successful service companies do now. They build their business around a core of permanent leadership and flex everything else. When they’re busy, they tap into the network. When they’re slow, their engineers work contracts through Automate America for other companies.
Everyone wins. Nobody sits idle. Work gets done efficiently.
The Philosophical Truth About Professional Labor
There’s something fundamentally honest about the on-demand professional model.
You pay people for creating value. When they’re creating value. Where they’re creating value.
The traditional model asks companies to guarantee income to professionals regardless of whether there’s work to do. That forces companies to either keep people busy with make-work tasks or to overpromise on job security they can’t actually guarantee.
Neither approach serves anyone well.
The on-demand model is direct: “I need your expertise for this project. Here’s what I’ll pay. Here’s the timeline. Are you interested?”
The professional responds: “Yes, I’m available. Let’s do excellent work together.”
Then everyone does excellent work together.
When the project ends, the relationship doesn’t end—it just pauses until the next opportunity. The professional moves to their next project. The company tackles their next challenge. If both parties want to work together again, they do.
This is adult professional commerce. This is how skilled trades professionals have worked for centuries. This is how consulting has always worked at the executive level.
We’ve simply brought this model to automation engineering, controls programming, and skilled manufacturing labor.
The result is a marketplace where professionals have freedom and companies have flexibility.
That’s fair. That’s just. That’s the future.
The Decision You’re Making Right Now
You have two paths forward.
Path One: Keep hiring every specialist as a permanent employee. Keep paying for idle time. Keep absorbing the risk of bad hires. Keep limiting your flexibility. Watch your labor costs balloon while your competitors move faster than you can.
Path Two: Build a strategic 20% core team who manage projects and hold institutional knowledge. Access 40,000+ automation professionals through Automate America for everything else. Scale up instantly when you need capacity. Scale down when you don’t. Pay for value creation, not for attendance.
The companies choosing Path Two are winning. They’re completing projects faster. They’re spending less on labor. They’re accessing specialized expertise they could never afford to keep permanently.
More importantly, they’re sleeping better at night. No more wondering if they have enough work to justify the team. No more panic when someone gives two weeks notice on a critical project. No more recruiting nightmares trying to find a PLC programmer in a market where everyone’s employed.
The anxiety is gone. The flexibility is here.
Moving Forward With Confidence
If you’ve never used on-demand professional labor before, the concept might feel risky. It shouldn’t.
The risk is in the traditional model. The risk is in committing $700,000+ over three years to someone you interviewed for two hours. The risk is in not being able to scale down when market conditions change. The risk is in missing opportunities because you don’t have capacity.
The on-demand model through Automate America is actually lower risk:
- Try professionals on contract before any permanent commitment
- Access specialists for exactly the duration you need them
- End relationships professionally if fit isn’t right
- Scale up or down based on actual business needs
- Pay competitive rates without the overhead burden
Thousands of professionals are available right now. Every major platform—Siemens, Rockwell, Fanuc, ABB, Cognex, Keyence. Every application—packaging, assembly, material handling, process control, robotics. Every industry you can name.
When you need expertise, it’s there.
A Closing Thought
I hope this article gave you actionable insight into how the best manufacturers are structuring their professional workforce. This isn’t theory. This is what’s happening right now in facilities across America.
The 20/80 model works because it aligns cost with value creation. You invest in your core strategic team. You access specialists exactly when they’re needed. Nobody’s wasting time. Nobody’s wasting money.
If you’re an automation professional reading this and thinking “that’s how I want to work,” welcome. You’ve found your people.
If you’re a manufacturing leader thinking “that could solve real problems for us,” you’re absolutely right.
The marketplace is here. The professionals are ready. The model works.
Now it’s your decision.
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I’m grateful you took the time to read this. I genuinely believe the professional on-demand model is more fair, more efficient, and better for everyone involved than the traditional employment structure we’ve used for the past century.
We built Automate America to give every professional around the world fair access to opportunities, and to give every company fair access to the talent they need, when and where they need it.
That’s the mission. That’s the destination.
If you have questions about how this model could work for your facility, call me directly. I’ve spent twenty-five years in this industry. I’m happy to talk through your specific situation.
Tony Wallace
Co-Founder, Automate America
586-770-8083
info@automateamerica.com
