Recruiting: 5 Steps to Reduce Turnover in Manufacturing
With unemployment lower than it has been at any time this century and pay increases relatively flat, if turnover isn’t at the top of your list of concerns as a recruiting manager, it should be. Ask 100 people in the job market today about their ideal occupation and invariably you will find they want to make more money, especially as frequently changing jobs has been shown to result in increased pay. A recent poll asking why people currently working would start looking for new employment found 24 percent of respondents wanted more money and 21 percent were looking for advancement opportunities. Additionally, if it’s safe to assume that such advancement would come with better pay, then nearly half of respondents consider compensation first when contemplating their next career move.
Thus, while paying more may be an excellent way to keep talent from leaving your company, it’s obviously not the most cost-effective. Neither is it the only way to reduce turnover, even if you don’t want your staff bringing their pets to work or otherwise can’t go to the lengths some companies are to lure in new talent these days. Below is a list of five best practices you can implement at your manufacturing facility to reduce turnover by making yours a company people want to work for.
1. Calculate your company’s turnover costs.
Is your company merely experiencing some turnover, as all companies do, or does it have a turnover problem? Without having first investigated and defined the situation, you can’t hope to understand, tackle or overcome it. Further, the clearest way to describe a business problem is to know precisely how much money and time, another way of describing lost money, it is costing you. Calculating turnover cost involves factoring in a wide variety of concerns, from easily measurable training and onboarding expenses to murkier losses in productivity and the time it takes to build relationships.
Once you have figured out how much your company wastes finding, onboarding and replacing the wrong people, you will know exactly how much you can save by hiring the right people. Savings in a solid dollar figure is the ammunition you need to justify waiting for that right person to come along. Additionally, paying the higher salary you need to entice that quality hire, or investing in benefits packages you think will change both existing and potential employee opinion of your company for the better, will require solid justification.
2. Know why your people leave.
While workers often cite pay as the factor behind accepting one position over another, people seldom leave jobs, especially jobs they enjoy, for financial concerns alone. We’d all love to be making more money, but working for less than you think you should in a job you know is going nowhere for a boss you don’t get along with is too much to ask of anyone. This just means there’s more to keeping talent than simply paying them more money, because no amount of money is going to convince talented people to stay in a job they’ve given up on.
Getting your team to share with you what they do and do not like about their jobs begins with fostering a work environment conducive to communication, one in which workers know their opinions are valued. Likewise, a hallmark of a quality manager is effective communication: seeking out employee opinions as well as providing feedback about how their overall work performance could be improved. Ultimately, knowing how your people are doing is just as important as knowing what they are doing.
3. Hire the right people to begin with.
It might seem obvious that employees who are the best possible fit for the role you hire them to fill will be less likely to leave than those who aren’t, but often the drive to fill a given position quickly can overcome the more important goal: to fill that position correctly. True, it will take longer to find that better fit, but because you have already figured out how much you are wasting on the wrong people, you’ll know exactly how much that wait will save you.
The key to hiring the right people is knowing who those people are going to be before you even begin looking for them. Remembering there are numerous ways to go about locating talented people, think about what makes the best among your current employees so good, and recall how you found them. Next, go looking for others with those same skills and abilities in the same way. Modeling and repeating success is a good way to ensure those successes keep rolling in, including onboarding and clearly establishing responsibilities for new hires as early as possible.
4. Always be flexible enough.
Everyone knows happy workers are productive workers, so how productive is the worker whose boss refuses every time she asks for an afternoon off to run an important errand? Expecting them to produce premium results should naturally encourage your staff to expect the same from others and the company as a whole, driving improvement across the board. Thus, it is as incumbent upon the company to fulfill its employees’ expectations as vice versa. Build a culture of excellence by expecting and then rewarding exceptional performance with praise and the occasional perk.
Because there is always give and take, pushing workers too hard for too long without time off to recharge will breed burn out and resentment, and ultimately it can drive away your hard-sought talent. Also, managers with the highest turnover should be retrained, as this will speak volumes about the company’s desire to work proactively even through its own mistakes and shortcomings. Finally, flexibility has its limits: employees who are routinely negative, repeat mistakes or cause larger problems should be let go.
5. Develop your employees according to a clear plan.
Working closely with your employees to guide their career trajectory gives them an idea of where their professional future lies and where their job is going to take them. This process should include specific enumeration of what is expected from them and what they will need to do to earn bonuses and pay increases as well as how to advance by moving within the company, either upward or laterally.
Instead of just permitting employees to move between jobs and departments in your company, encouraging a culture of development by consistently promoting individuals from within the company will actively encourage your staff to grow at a pace they feel comfortable with. Also, mandatory training should be de-emphasized in favor of encouraging participation in interesting and engaging personal development training. Such training should be sponsored by the company and made available during dedicated work hours. In this way, managers can get a sense of who wants to get ahead. In effect, those are the people looking to take on new assignments and responsibilities.
Now that you’re an expert on the five steps to reduce turnover in manufacturing, learn how Staff Management | SMX ramped up a leading food and confection manufacturer’s workforce by 118% by investing in associates and community partnerships.