While we keep hearing the term “Quiet Quitters” and the “Great Resignation,” manufacturing employees aren’t exactly leaving because they hate their jobs. Some workers stay at their company for many years or their whole lives, loving what they do and feeling like they’re exactly where they’re meant to be. Others, the “job hoppers,” “hop” up the corporate ladder by giving themselves raises with new opportunities or leaving to pursue a different path. Whatever the case, most people and manufacturers alike aren’t going “just because.” In fact, a study administered by OnePoll on behalf of Motivosity suggests that 69% of employees “love” their current job—even 41% going as far as to call it their “dream job.”
Regardless, keeping your employees loyal in a small to mid-sized manufacturing company environment takes work, especially when there are bigger corporate competitors out there. But, what if we were to tell you that there are five core strategies to abide by that can retain all of your employees, regardless if they joined ten years ago or the last quarter? To unpack those, you need to understand why people love their jobs in the first place.
Top Reasons Employees Love Their Jobs
– Clients and co-workers (44%)
– Roles and responsibilities (39%)
– The ability to maintain a good work/life balance (39%)
– The industry they work in (34%)
– Manager/boss (30%)
(Statistics from Motivosity)
What is Employee Retention?
Employee retention measures a business’s ability to keep its employees and lower employee turnover (how often employees leave). In layman’s terms, it indicates how much people actually want to work for you. A high employee retention rate of 90% or higher helps businesses succeed because more dedicated employees make reaching business goals easier.
How To Calculate Employee Retention Rate
Simply divide your total number of current employees during a set quarter by the total number of employees you started with during that same period and multiply by 100. The resulting decimal is turned into a percentage, and that’s your rate.
For example, let’s say you came into Q2 with 56 employees and ended Q2 with 52. Here’s how to set up your equation:
(52 / 56) x 100
The number equals 92.8571429, rounded to the nearest tenth and converted to the percentage 92.9%. That’s a stellar retention rate.
Why Should Small and Mid-Sized Manufacturers Care About Employee Retention?
Caring about your employee retention rate is common sense because when you have a lower retention rate, you also have a high turnover rate. If you have a high turnover rate, you are struggling to get employees to stay with your business. If you’re struggling to keep your workers, you won’t be able to keep up with daily customer demands, innovate new technology during Industry 4.0, or maintain a healthy supply chain. And beyond that? Undelivered or faulty products and unhappy customers. Say goodbye to profit, too.
More specifically, if your retention rate is low, your business probably spends more money hiring new employees than helping existing employees succeed. This is especially difficult for small and mid-sized manufacturers because they rely heavily on their employees to meet production goals. They are more at risk when employees decide to leave because they do not have many workers at their disposal, like large corporations. On top of that, the turnover costs are incredibly high: it’s estimated that losing a worker can cost a company one-half to two times the worker’s salary. That’s not productive manufacturing.
How To Boost Employee Retention
Good employee retention stems from a low turnover rate, continuous business growth, healthy work-life balance, a welcoming work environment, and abundant opportunities. Let’s discuss some main employee retention tactics tailored for small and medium-sized manufacturers.
1. Perform thoughtful hiring practices.
Employee retention starts with hiring the right people. How do you find the right people? Through a comprehensive, detailed recruitment process that ensures you’re hiring the right people. Think of internal and external recruiters, background checks, meaningful interviews, and resume comparisons to find people with the best manufacturing experience and skills. Do they have experience working through difficult supply chain issues and using advanced production technology? Formulate strong questions and consider utilizing resources specifically designed for family-owned manufacturing businesses.
2. Foster a collaborative and inclusive work culture.
Manufacturers need to work in environments where they feel valued; it’s probably the most important element to employee retention. Continually acknowledging your employees’ manufacturing wins, customer satisfaction, and performance metric victories is important to building workplace confidence. Implement custom solutions for manufacturing companies, like rebuilding your operational processes.
3. Offer extensive training and development opportunities.
Are your manufacturers struggling to perform daily activities? They may need to hone their abilities. If your employees and managers aren’t properly trained, they may feel overwhelmed and unable to carry out tasks efficiently. Always give your employees proactive feedback, encourage teamwork, and demonstrate how their work affects customers. Likewise, invest in manufacturing leadership coaching programs to develop the skills and potential of your small manufacturing owners and managers.
4. Communicate; always.
The moment your manufacturers start guessing and making assumptions is the same moment the supply chain disrupts. When employees understand what is expected of them and there are healthy flows of communication, they’re more likely to ask questions when they are questioning. Establish open lines of communication and encourage regular feedback sessions. Provide resources for family-owned manufacturing businesses focusing on effective communication strategies to enhance employee engagement and satisfaction.
5. Offer fair compensation, benefits, and perks.
As pivotal members of the supply chain and creators of our current technological advancements, manufacturers deserve fair pay. Offering fair compensation, benefits, and perks and allowing opportunities for raises when earned shows that you genuinely care about their quality of life. Consider implementing manufacturing workforce development programs that provide opportunities for career growth, skills enhancement, and personal development.
Even though employee retention starts with hiring the right person, it is up to you as a small/midsized manufacturing business owner to work to keep your employees happy, safe, and thriving at their jobs.
If you’re already staring at your retention rate on your calculator and you’re not impressed, take advantage of these tips and resources to raise it. Join the GENEDGE Alliance to get started.
