Value is a funny thing and is truly in the eye of the beholder. Some look at qualitative values such as personal relationships or emotional value to an object or geographic setting. Others take a more quantitative approach to how they perceive value through cost/benefit analysis, and amortization vs. inflation and depreciation. Two things we can all agree on is that neither one is better than the other and that a healthy balance of the two is usually best.  This idea of balance is sometimes challenged in the business world; most notably, when it comes to effective employee training. Organizational training is where these two schools of thought often come to a crux; particularly, within manufacturing. The incurred soft-costs resulting from ineffective training are often under-prioritized by the old school “churn and burn” mentality. For many years keeping production output ahead of employee-based soft costs was the focus; however, times have changed in a very big way.

We often hear these same two phrases from our client-partners.

  1. Employee recruitment continues to be a challenge. How do we find the right candidates at the right time for our open positions?
  2. Employee retention is killing us. Why are we losing so many employees at such an alarming rate?

The reasons one may choose to leave an organization are nothing new to anyone within the manufacturing sector. Those, in no particular order, are…

  • Unsatisfactory wages
  • Work/Life Balance
  • Lack of Purpose & Training
  • Poor Recognition & Feedback
  • Lack of Growth Opportunity

Let’s look a little more closely at each of these and think about some mitigation strategies for these issues.

Reason #1: Unsatisfactory Wages
Wages within manufacturing have steadily increased over the last 5 years due to perceived employee shortages and wage-wars amongst competition. COVID-19 also didn’t do us any favors.  Pay more and you’ll get the people, right? Wrong. Recent studies show that while compensation is a top factor for employee turnover, it is not the sole reason. Depending on the employee’s station and situation in life, wages may not play such an important role in their decision making process. Generational shifts in lifestyle and core-values have turned the “if you pay more they will come” credo on its head and shown changes in perceived value of wage. While this thought process may have worked 20, 30 or 40 years ago, the paradigm has shifted and those generations are aging out of the available workforce. Simply put, if you pay them, they might come but how long will they stay?

Reason #2: Work/Life Balance
It is no secret that in manufacturing you work a lot of hours. Home life is often “2nd fiddle” to working overtime to meet the production schedules and sales orders. When your workforce is short headcount, it means that those who are with the organization are more-than-likely expected to pick up the additional slack. Now, those overtime hours do come with a hefty paycheck, but… did you read the paragraph above? That is no longer the silver bullet solution. 

Within the first 90 days of employment your workforce will experience a cycle you are probably quite familiar with. On days 1-21 the new hire sees the size of their overtime-bloated paycheck and gets excited. Very excited. Days 22 – 50 become a little more difficult. Break-in pain has set in and they are sore and exhausted. They’re making good money but they are too sore to play with the kids or do the things around the house they enjoy. The excitement begins to wane. Days 51 – 90 are typically what pushes your new-hire over the edge. The break-in pain is nearly unbearable, they miss their home life and after a series of no-call/no shows, they are gone. Their values have shifted and as the generational shifts in lifestyle and core-values continue to evolve with the younger generation, this reality will morph from a thorn to a sword in the side of the sector.

Reason #3: Lack of Purpose & Training
No one likes to be ill-prepared for any task. Would you attempt to fly an airplane without taking the proper training? Would you voluntarily rush into a 5-alarm fire without the proper safety training? Lack of proper training is often perceived as the employer’s lack of value in that employee and results in the employee feeling a lack of purpose within the organization.  A common scenario for production facilities today is that as output expectations increased and headcount shrank, the short-term solution was to abbreviate new-hire training and place under-trained new hires on the production floor. This results in higher turnover, which leads to even less training. This catch-22 situation is a very dangerous place to be and you are now cultivating a negative culture trait.

While the compensation and work/life balance woes may be out of reach for an easy solution, this is not. Organizations can be apprehensive to the notion of stepping outside the box and auditing current processes and practices; however, this is something that should be done regularly and with laser focus. Tweaking and updating your training practices and processes is an easy step toward facing your retention problem head-on. However, it is not a one-and-done. It is a moving, living, breathing process and one of which you must stay vigilant with.

Reason #4: Poor Recognition and Feedback
Think of a time you accomplished a difficult task of which you were proud of your performance. Did you get a high-five? Maybe a “good job” from a friend or colleague? Did someone buy you lunch or a drink after work? The human psyche desires recognition and craves these interactions because they improve and increase one’s perceived value of self-worth. Columbia University Ph.D, David Champliss-Johnson states “The desire for recognition, that is to say, the desire to have the approval, esteem, consideration or respect of those around us, whether as individuals or members of [sic] groups, has in fact been described as a vital human need.” This is an organizational-culture shifter for the manufacturing industry. Implementing regular recognition programs is far and away the easiest and most affordable way to combat this issue. In fact, if you aren’t already actively doing so, I’m afraid to look at your retention numbers. Weekly, monthly or even quarterly employee recognition programs, regardless of fiduciary value, are a proven tactic to keep employees happy and feel valued amongst their peers and within the organization.

We’ve all heard the age-old adage “People don’t leave the job, they leave the supervisor.” This statement falls well within reason #4. Lack of feedback or positive reinforcement from peers and/or supervisors is a key cause of your employee feeling unappreciated. Managers and Supervisors have a responsibility to their employees to provide effective feedback, but oftentimes this feedback is perceived as criticism due to how it was delivered. This is sadly a strong reality for many of us. With such high turnover rates, we must also fill Supervisory roles. These positions are typically offered to the employee in that area or on that line who have shown a strong work ethic and effectively get the job done with little to no supervision. However, being good on the production line does not always translate to being an effective leader. Effective leader and supervisory training programs are the #1 and #2 most underutilized programs in manufacturing today. You may think your supervisor training is adequate, but that “Train The Trainers” VHS from 1994 you continue using isn’t cutting it. Effective and current soft skills and interpersonal communication training is vital to setting up that new supervisor to succeed.

Reason #5: Lack of Growth Opportunity
Albert Einstein once said, “Insanity is doing the same thing over and over again and expecting different results.” The desire to advance both personally and professionally is a part of being human. Our innate nature is to grow, evolve, learn and change. It is in our DNA and as the generational shift continues, we must recognize opportunities to ask and allow our employees to grow and develop within our organizations. The first step to growing within an organization is access to and availability of proper training and professional development tools. And, it doesn’t take much to go a long way. That little bit of training can be the difference between one rockstar on Line-A versus a rockstar leader developing their own team of future rockstars. We must be steadfast in our efforts to invest in our own people and let them know of the opportunities available to them. Open communication and available opportunities for growth have an extremely high qualitative value to the current and future production labor force which in turn, will benefit your bottom line long term.

Now, there are exceptions to every rule and we may encounter some that might say they are comfortable and don’t want to change. Organizational behavior studies have shown that what those people actually desire is the opportunity to have the choice to change. Let them know that if they ever want to grow and move up, there are opportunities ready to help them do so. Oftentimes this brief conversation can be a solution to turnover and self-terminations related to Reasons 4 and 5 at the same time. 

Again, there is no all-encompassing, silver-bullet solution to the manufacturing sector’s recruitment and retention woes. These issues require succinct and long-term strategies with fluidity and an ability to continually evolve and adapt to an ever changing environment. As there are some difficult hills to climb (reasons 1 and 2), luckily, there are some very easy and affordable short-term solutions to slow the retention bleed the manufacturing sector is currently experiencing (reasons 4 and 5) leaving the sector at a crossroads (reason #3). The path you choose can directly impact your retention numbers and soft-cost bottom line. The question is, how do you value training?

Contact WorkForge today to experience a free demo of our world class training solution and add value to your organization.