A 5-step solution to a high warehouse or manufacturing turnover rate

A warehouse worker who's company addresses high turnover

Every company faces some degree of employee turnover. Positions become vacant because someone quits, is promoted, transfers to a different role, retires or gets let go.

But what happens when your warehouse or manufacturing division has such a high turnover rate that it’s impacting your company’s bottom line? Following these five steps can help.

Step 1: Consider turnover rates industry-wide

The first step is to calculate your turnover rates and see how they compare to others in your industry. Admittedly, this doesn’t really do anything to resolve the issue, but it can tell you if you’re experiencing the same level of turnover as other similar businesses or if your company’s rates appear to be better or worse.

The Bureau of Labor Statistics (BLS) reports that the 2020 separation rate for the manufacturing industry was 44.3%, with a 59.5% separation rate for the warehousing industry. Are your company’s rates comparable, higher or lower? Seeing how you stack up against others can provide some insight as to whether your turnover is normal among industry trends or way out of bounds.

If your rate is close to normal and you want it to improve, this suggests that you have to do something to stand out against your competitors to attract and retain top talent. If your rate is a lot higher, there may be things going on internally that need to be fixed to make your company more appealing to current and prospective employees.

Step 2: Determine your turnover by separation type

The BLS further reports that in May of 2021, the transportation, warehousing and utility industry experienced 259,000 total separations. Yet, of those total separations, only 46,000 were quits. The rest were layoffs, discharges, or some other type of separation.

The reason these numbers are important is because you can’t reduce your turnover until you understand the primary reason certain roles are being left empty. So, take the time to look at your vacancies over the last year to determine the driving forces behind these vacancies.

Are warehouse workers leaving for better-paying jobs, for instance, or is it that you have an older workforce and you’re facing a higher number of retirements? Each type of situation would require a different approach to resolve. And you can’t begin to work on that approach until you know the situation you face.

Step 3: Brainstorm solutions

After you get a better idea of what is causing workers to leave your warehouse or manufacturing divisions at a higher rate, it’s time to do some brainstorming and come up with potential solutions. Include people from varying levels within the company in the brainstorm session. Get ideas from company leaders as well as people currently in positions with high turnover rates.

The goal of this session is to come up with as many solutions as possible, whether they are viable or not. By not setting requirements or parameters, creativity is allowed to flow. Through this creativity, you may come up with ways to rectify the situation that you’ve never thought of before.

Step 4: Implement the top 1-3 strategies

Once your brainstorming session is complete, decide on the top one to three turnover reduction strategies and try them out. One example would be deciding to pay more for high-turnover positions if employees are leaving because they can earn more elsewhere. If people are jumping ship because of poor work-life balance, maybe you give them every other weekend off so they can have more time with family and friends.

Also advertise these “perks” when posting open positions. During interviews, ask potential job candidates what they think of these options and if they were a draw to your company. This will tell you whether they are effective strategies or irrelevant to job seekers.

Step 5: Monitor results and modify as needed

Give three to six months to see if your new strategies have the desired effect. This requires that you continuously monitor your turnover rates, as well as keeping track of the reasons positions are being vacated in the interim so you always have access to the most current information.

If some of your options are working, continue using them. If they aren’t, try one or two of the others your group came up with during your brainstorming session. Sometimes it takes a bit of trial and error to discover what will work best for your company. As long as you keep trying, you’re moving in the right direction.

A trusted staffing company can help you manage your workforce including training and turnover. Get in touch to see the Staff Management | SMX difference.

About the Author

Christina M. DeBusk creates small business content for a variety of publications, some of which include Businessing Magazine, Compendent, Chiropractic Economics, and more. She is also the author behind the column, "The Successful Solopreneur.

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