When top performers resign unexpectedly, teams are left impaired. Morale goes down, managers have to redistribute work and productivity could decrease — for a while, at least.
According to Deloitte, employers in many sectors — including logistics, automotive and manufacturing — currently have to deal with a ‘talent paradox.’ Unemployment in many parts of the world remains high; in spite of this, businesses find skilled and technical positions very hard to fill.
If skilled workers are hard to replace, it seems sensible to look for ways to retain talent. The good news is this study also found that more than 8 in 10 surveyed participants planned to stay with their employers for at least the following 12 months. You can leverage that enthusiasm to your advantage — but we’ll go into that later.
In this post, we’ll talk about employee turnover and we’ll explore why employee retention, rather than replacement, is the key to HR success. Finally, we’ll reveal three ways you can reduce turnover and retain highly skilled employees at your facility.
employee turnover 101
It’s impossible to prevent everyone from leaving your organisation. 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.
According to a recent Gallup poll, however, over half of voluntary resignations are avoidable. In other words, more than 50% of the workers who quit any given organisation could have been persuaded to stay. Unfortunately, their managers had no idea they were unhappy — or, even worse, took them for granted.
In the U.K., manufacturing businesses have a 17.6% turnover — more than 7% higher than the Society for Human Resource Management’s (SHRM) 10% ideal turnover rate. In the U.S., companies in the manufacturing sector lose 2 in 10 of their workers every year. In China, the situation is even more dire: the turnover rate at some production facilities tops 300%.
why high turnover matters
Skilled employees leave big shoes behind — and between recruitment, training and on-boarding costs, they’re expensive to replace. 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 to find new ones.
According to the Deloitte study we referenced earlier, when highly specialised workers don’t feel engaged in meaningful work, they leave their employers in search of more significant roles. According to the Manufacturing Institute, U.S. manufacturing industry training costs for new employees exceed $3,000 per capita — and it seems logical to assume that those proportionate costs apply globally.
Turnover matters beyond monetary expense. When top-performing workers leave, 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 you’re going through a logistics expansion and you need to maintain productivity, you want your teams to be stable.
retention, not replacement
To reduce employee turnover, it’s important to focus on retention initiatives before staff members begin to depart en masse. Assuming the Gallup survey results we mentioned earlier apply equally across every industry, many voluntary resignations in the logistics, manufacturing and automotive industries are preventable.
If you can stop skilled employees leaving, your recruitment costs could diminish. The right retention strategies, however, are difficult to determine if you don’t know why your workers are leaving in the first place.
The right data can help you develop a deeper understanding of your company culture. Here are ten ways you can gather useful 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 conduct 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. 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 organisation, and take complaints seriously. Provide managers with leadership training, and hold them accountable at every level.
- Analyse 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 can help you analyse your company culture. Is there a sense of purpose at your business, or do employees feel uninspired?
- Evaluate engagement. When people feel engaged and interested in the work they perform, they stick around. Try to determine if top-performing employees feel fulfilled, and if they 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 burnt out or dissatisfied.
- Assess processes. Sometimes, employees leave because they’re micromanaged or because they don’t agree with corporate procedure. Reassess policies and procedures regularly to make sure they’re working as intended.
three powerful strategies for employee retention
The first step in tackling employee turnover is to conduct a thorough assessment of your business. Once you know why people leave, you can craft a custom strategy to turn your company into a place in which people want to work. Here are three ways to change your company culture for the better.
1. offer flexible scheduling
During the coronavirus pandemic, employees at many companies began to work remotely. Office-based logistics personnel adopted Zoom and spent their hours working from home. Delivery drivers continued to log hours on the road, but went contact-free when picking up or delivering parcels. Some logistics businesses implemented a second shift to minimise contact between people.
Factories changed in response to COVID-19, too. 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; a select few shifted to a remote manufacturing strategy, albeit with fewer workers on board.
Many economic experts believe that given the number of cloud-based solutions available today, remote work will probably continue beyond the pandemic. This “new normal” will likely apply more to office-based staff than factory workers, however: after all, the very nature of factory work demands on-site participation.
Flexible working options for production facilities include flex scheduling and shift swapping. 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. According to a 2018 survey by The Workforce Institute, 35% of employees would take a 20% pay cut if they were allowed to work four days a week, rather than five.
With the right oversight and optimal platforms in place, flexible scheduling works surprisingly well. Even better, employees like flexible schedules. Flexible workers feel more productive, less stressed and more satisfied with their jobs. In short, they’re more likely to stay with their employers.
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. Well-trained employees get progressively better at tackling challenges, so they feel more confident and, in turn, more fulfilled.
The type of training you provide will depend upon what your company does on a day-to-day basis. For maximum impact, training courses should be relevant to an employee’s job, or to the job they’d like to do in the future. If you conduct regular engagement interviews, ask your workers what kind of training initiatives they would like to participate in.
Ideally, training should begin shortly after hiring, and it should continue throughout the employee’s tenure with you. Six distinct types of training exist:
- Orientation. At orientation training, you introduce your company culture, your mission and your values, and your organisational structure. 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. At this stage, new team members receive progressively more complex job-related training. They learn how to perform tasks independently as their skill sets expand.
- Soft skills. New employees learn team-related skills like communication, leadership, conflict resolution and corporate ethics. You can use this type of training to nurture teams, and to identify potential future managers.
- 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 partner
Flexible scheduling and training programs undoubtedly help improve employee retention. Another highly effective way to reduce staff turnover is to work with a recruitment agency. After all, flexible schedules and communication courses only boost retention if they’re applied to the right workers.
Professional recruitment agencies find and recruit the right employees for your organisation. Many candidates look great on paper, but then fail to perform after they’re hired. Recruiters have years of hiring experience — after all, they recruit for a living — and know what truly great talent looks like.
The best recruitment agencies 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 significant time — and a lot of money.
Some recruitment agencies continue supporting workers they help to hire — even after they’re on your books. They collaborate with you to provide supportive training, which can help to improve the chances of long-term employee retention.
how Randstad can help
Randstad can help you strengthen and improve your workforce — and retain the talent you already have. Our global pool of prescreened talent and decades of recruitment experience make us a reliable staffing partner for manufacturers, logistics companies and trailblazing automotive firms all over the world.
We transform the stress of recruitment into a golden opportunity for development. Leave hiring, onboarding, training and support to us, and focus on growth and innovation at the executive level.
If you’d like to read more about employee turnover and learn seven of the best retention-boosting tips, download our comprehensive guide today.