The Effect of Reshoring Manufacturing: How Manufacturing Impacts Accounting and Finance

May 8, 2025

The return of manufacturing to U.S. soil, otherwise known as reshoring, is reshaping the landscape for accounting, finance, and human resources professionals. As companies localize operations to build resilient supply chains and capitalize on federal incentives, they face new pressures in cost accounting, capex forecasting, tax planning, compensation strategy, and workforce management.

Localized Cost Accounting and Capex Forecasting

In 2024 and 2025, U.S. manufacturers continue to invest in domestic facilities, with construction spending reaching a record $238 billion in June 2024, though growth is slowing from previous highs. This surge, fueled by clean-technology investments and federal incentives, demands more sophisticated cost accounting to track higher input costs, labor, and overhead. Capital expenditures are projected to rise 5.2% in 2025, reflecting ongoing modernization and automation efforts to offset persistent labor shortages and rising compensation. Accurate forecasting and scenario analysis are critical as companies navigate a volatile environment marked by fluctuating demand and input prices.

Tax Planning in a Dynamic Policy Landscape

Reshoring brings new tax complexities. The administration’s 2025 tariff overhaul and ongoing federal and state incentives for domestic production require agile tax planning and compliance strategies. Companies must maximize credits for clean energy and advanced manufacturing while managing increased scrutiny and regulatory requirements. This creates demand for finance teams skilled in both tax optimization and compliance.

Compensation Trends and Pay Transparency

Compensation remains a top concern as manufacturers compete for skilled labor in a stabilizing but still tight market. Total compensation for private industry workers rose 3.9% from June 2023 to June 2024, with wages up 4.1%. For 2025, salary budget increases are projected at 3.7%–4.0% for nonunion workers, slightly below the peaks of 2022–2023 but still above pre-pandemic norms. Pay transparency is accelerating: more companies are sharing pay ranges with employees and candidates, and 70% plan for pay equity adjustments in 2025. This transparency is essential for retention and for meeting evolving regulatory and employee expectations.

Balancing Wage Competitiveness with Rising Overhead

Manufacturers must balance the need for competitive wages with the reality of rising overhead and compliance costs. While inflation and input prices have stabilized, they remain elevated and overhead continues to climb due to technology investments and regulatory demands. Many companies are turning to performance-based pay and skills-based compensation models to reward and retain top performers while managing costs. Flexible benefits, pay-for-performance, and off-cycle adjustments are increasingly common as firms seek to personalize rewards and control expenses.

Workplace Impacts: HR’s Leadership Role

The shift to onshoring and automation is not just operational, it’s personal for employees and how it impacts their day-to-day. As companies adopt AI and advanced technologies to address labor shortages, employees may face uncertainty, reskilling needs, and cultural adjustments. HR leaders are critical in guiding organizations through this change, emphasizing transparent communication, robust training, and support for employee well-being. Fostering an inclusive, adaptive culture helps mitigate the emotional toll and ensures a smoother transition.

Looking Ahead: A Competitive, Resilient Future

Reshoring is expected to accelerate through 2025, with executives projecting a 4.2% revenue increase and modest employment growth as the sector rebounds. The ripple effects will continue to challenge and transform accounting, finance, and HR functions. Success will depend on agile cost management, proactive tax planning, transparent and competitive compensation, and empathetic HR leadership.

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