Improved employee retention is a critical HR strategy for manufacturing businesses, helping to ensure that trained, experienced workers are available to maintain a steady workflow. Plus, if you want to accept new orders or transition your company through digital and technological innovations, you need a stable work environment with a knowledgeable staff.
The global talent shortage has been especially challenging for the manufacturing industry, with companies scrambling to fill employment gaps. Fortunately, while you may find it difficult to find and recruit new workers, you have the upper hand when it comes to retaining the talent you do have.
In this article, we’ll discuss employee turnover as it relates to manufacturing and explore why employee retention, rather than replacement, is the key to HR success. Finally, we’ll reveal some employee retention strategies along with examples to keep your facility productive and moving forward.
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employee retention 101
The old adage ‘a bird in the hand is worth two in the bush’ is especially true when it comes to retaining employees. In fact, according to figures from the Society for Human Resource Management, an employee in your ‘hand’ could be worth three or four in the ‘bush,’ thanks to the costs of recruitment and training.
Therefore, unless you have an unproductive or undesirable employee, it’s much more cost-effective to retain them by helping them engage in the workplace.
Time is ticking on implementing a strategic employee retention program, with manufacturing labor in high demand across the globe. Case in point — a recent Deloitte survey reported that nearly 45 percent of American manufacturing executives had to turn down work because of talent shortage.
employee retention, rather than replacement, is the key to HR success.
why you need an employee retention program
It’s impossible to prevent everyone from leaving your organization. Some employee turnover is inevitable: people retire, relocate or move to other positions within your company, for instance. Others decide to change careers or leave full-time employment for family reasons.
However, skilled employees leave big shoes behind — and between recruitment, training and onboarding costs, they’re expensive to replace. Moreover, candidates with the right skill sets aren’t always easy to find in the logistics and manufacturing sector, so it makes sense to try to retain existing employees rather than find new ones.
Retention involves more than monetary expense. When top-performing workers move on, the remaining team dynamic changes. Skilled employees motivate their coworkers; when they leave, productivity stalls. If you’re in the middle of an extensive production run or going through a logistics expansion and need to maintain productivity, you want a stable team.
Also, attitudes are changing across the workforce and if you don’t actively work to retain employees, you may find yourself coming up short. For instance, data from Randstad’s Workmonitor 2023 report shows that 54% of workers would leave their job if their sense of belonging wasn’t strong enough, pointing to the increasing importance of fostering an inclusive and equitable workplace.
how to develop an employee retention program
To reduce staff turnover, your HR team needs to focus on retention initiatives before manufacturing employees depart through voluntary resignations.
Suitable retention strategies, however, are difficult to determine if you don’t know why your workers are leaving in the first place. Therefore, your employee retention plan must begin with some research.
The right data can help you develop a deeper understanding of your company culture, including why people leave. Here are ten ways to gather helpful information:
- Create an anonymous survey. Employees don’t always feel comfortable talking about work-centric issues. A survey can encourage dialog, and you can use incentives to increase participation.
- Conduct exit interviews. Consider hiring an independent consultant to lead exit interviews. People often find it easier to speak frankly with interviewers who don’t directly represent the companies they work for.
- Speak to popular employees. Some workers become informal leaders on the warehouse or factory floor. Speak to them one-on-one to see if they can provide insight into workforce morale.
- Make engagement interviews routine. When engagement interviews happen, as a matter of course, people open up more. So, consider making them part of your HR routine, and praise employees when they provide helpful information.
- Tackle bad managers. Keep an eye on supervisors and managers in your organization and take complaints seriously. Provide managers with leadership training and hold them accountable at every level.
- Analyze patterns. Is turnover more common in a particular department? Do specific types of employees leave more often than others? Do certain workers hold more stressful positions than others?
- Dissect your company culture. An external consultant can provide an outside perspective and help you analyze your company culture. For example, is there a sense of purpose at your business, or do employees feel uninspired?
- Evaluate engagement. When people feel engaged and interested in their work, they stick around. Try to determine if top-performing employees feel fulfilled and enjoy their assigned tasks.
- Read between the lines. When workers who usually perform well begin to withdraw or underperform, you can safely assume they’re not happy. Talk to them about why that might be — and take them seriously if they feel burned out or dissatisfied.
- Assess processes. Sometimes, employees leave because they’re micromanaged or because they disagree with corporate procedure. Reassess policies and procedures regularly to make sure they’re working as intended.
three employee retention strategies that work
Once you’ve created a short list of why people are leaving or are willing to leave your organization, you’re ready to take the offense. These three employee retention ideas can help you change your company culture for the better while improving your retention rate.
1. offer flexible scheduling
Factories changed in response to COVID-19 as workstations moved, workers sat further apart, and robots took over some human roles. At some companies, additional shifts were created to accommodate social distancing. Some factories closed entirely during pandemic peaks and a select few shifted to a remote manufacturing strategy, even if with fewer workers on board.
Once things returned to ‘normal,’ some employers reverted right back to their old practices. Employees, however, don’t want to return to the status quo. Randstad’s Workmonitor 2023 survey found that overwhelmingly, across all age groups, flexible hours were critical to job choice; in fact, 48% of U.S. respondents would quit a job if it prevented them from enjoying their life.
Therefore, it may be time to consider flexible working options for production facilities, including flex scheduling and shift swapping. For example, compressed schedules — where people work three or four longer shifts and then take several days off — are a potential alternative to traditional five-day weeks.
With the right oversight and optimal platforms in place, flexible scheduling works surprisingly well. Even better, employees like flexible schedules and feel more productive, less stressed and more satisfied with their jobs. In short, they’re more likely to hire on and stay with their employers.
As a case study, Audi recently developed a pilot program at its Ingolstadt site introducing part-time and flex scheduling on the paint line. The response has been highly positive, with workers, management and board members pleased with the company’s progressive approach.
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2. provide better training
People love to learn. In fact, the opportunity to learn new skills is one of the biggest draws to any new job — especially if that learning leads to promotion. In the 2022 L&D Report by findcourses, results of surveyed employees showed a distinct correlation between job satisfaction and a progressive learning culture. Similarly, 62 percent of United Kingdom employees who felt a lack of learning opportunities also reported unhappiness with their job.
The type of training you provide will depend upon what your company does on a day-to-day basis and what skills you wish to prioritize. Survey results for the UK from findcourses listed the top three priorities as management (39%), closing skills gaps (29%) and tech training (19%).
For maximum impact, training courses should be relevant to an employee’s job or the job they’d like to do in the future, since innovations in manufacturing will call for reskilling current employees. As John Steckler, one of the Directors at Archer Daniels Midland, a global food processing corporation, stated in a recent report on industrial facilities, ‘The operator of yesterday is probably not the operator of tomorrow.’
Ideally, training should begin shortly after hiring and continue throughout the employee’s tenure with you. Six distinct types of training exist:
- Orientation. At orientation training, you introduce your company culture, mission, values and organizational structure. As a result, new employees gain a better understanding of the corporate landscape and settle into their jobs.
- Onboarding. Your well-rounded onboarding training program represents a direct investment in retention. Onboarding covers department goals, technical aspects of the new employee’s role and much more.
- Tech skills. With the advent of the new digital age and Industry 4.0, all workers need up-to-date tech skills. From smart workstations with digital dashboards and watches to increased automation, factories are transforming how we work and communicate. To ensure ongoing success, you need a robust tech skill training program.
- Soft skills. Team-related skills like communication, leadership, conflict resolution and corporate ethics aren’t just for managers. To ensure a cooperative and inclusive workplace, you must show that your company values people.
- Quality control. An essential type of training in the manufacturing, logistics and automotive sectors, quality control programs ensure that products meet particular standards.
- Safety. Safety training is a legal must-have in many environments. Employees learn safety policies and procedures, how to use safety equipment properly, and how to administer first aid. Industry-specific safety training topics like asbestos, construction and food safety might also apply.
3. work with an HR solutions partner
Flexible scheduling and training programs undoubtedly help improve employee retention. Another highly effective way to reduce staff turnover is to work with an HR solutions provider. After all, flexible schedules and communication courses only boost retention if applied to the right workers.
Professional HR firms can find and recruit the right employees for your organization. Many candidates look great on the application and during interviews but then fall short after they’re hired. Recruiters have vast hiring experience — after all, they recruit for a living — and know what truly great talent looks like.
The best HR companies have hundreds or even thousands of legitimate job seekers on file globally. When you contract with them to help you hire people, they reach out to pre-vetted workers before placing new ads. This can help save considerable time — and a lot of money. Some companies, like Randstad, continue supporting workers they help to hire — even after they’re on your books. They will also collaborate with you to provide training and assist with long-term employee retention strategies.
We transform the stress of recruitment into a golden opportunity for development and, ultimately, the retention of employees. By leaving the hiring, onboarding, training and support to us, you can focus on growth and innovation at the executive level.
employee retention guide
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This is an updated version of an article originally published on 05 May 2022 .