In the current economic environment, there is plenty of opportunities for employees to find good job offers. As an employee, this is a dream come true; having employers seek you out is an amazing feeling. Along with the positive, and with a current U.S. unemployment rate of 3.6%, come very real challenges for employers such as employee turnover.

“Manufacturers face the disappointment of losing a high performing team player and the frustration of the long-drawn out process of finding a replacement. Feels as if whenever you are making good progress with building your team, the deflating resignation notice shows up and you take a step back.”

A report from the center of American progress found that turnover can cost manufacturers between 16% and 213% of the employee’s annual salary. Turnover is very costly to businesses:

• Staffing costs which include recruiting, and screening activities.
• Productivity costs due to the employee’s adaptation process to their new employer, their processes, and new co-workers.
• Training costs, employees will spend time training the new hire as part of the onboarding process.

Manufacturers have several options when it comes to mitigating the risks for such high costs. Here is a short list of things that manufacturers can do:

Document and Standardize processes – Many manufacturers have a dependency on employee knowledge to execute. The paradigm should shift to creating a solid foundation of processes so when turnover hits, the business is not left with a significant talent gap.

Cross-train staff – This is a very effective way of creating capabilities in current employees. Few manufacturers take advantage of this option, blaming the time-consuming nature of this activity. In my career, I have seen how powerful a cross-trained staff can be.


Girl in a jacket

Develop your leaders – When employees resign, often they are leaving their leader as opposed to the company. Manufacturers should address this tendency by improving leadership skills. Having effective leadership creates an environment employees will consider before deciding to change employers.

Build your processes to reinforce behavior, hiring for culture fit, and promoting from within – All of your processes should reinforce the cultural elements that define your business culture. Build processes that eliminate improvisation during the hiring process and make the candidate selection process more objective. Employees should feel they have an opportunity for growing their careers within your business, embrace the practices that pave the way for employees to thrive and remain with your company longer.

Hire interim help – Manufacturers can utilize the skills and abilities of workers on a temporary basis. When looking to make a good hire. Manufacturers can look at temporary agencies for unskilled labor or hire professionals for interim leadership positions.

In the following weeks, I will expand on the recommendations above.

If your organization is dealing with high employee turnover and you would like to discuss your situation, schedule a call.

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