With good people so hard to find and keep, operations executives are aggressively sweetening the pot while putting new policies and processes in place to increase retention.
Each quarter, TBM assembles an operations executive roundtable—a group of middle market manufacturing and service sector executives from major companies serving a variety of industries to virtually dissect and debate critical industry issues. This fall, talent issues stole the show as participants shared innovative ideas and approaches for filling vacancies and retaining top performers at all levels of their organizations. From hefty financial incentives to daily engagement strategies to workforce development programs and no-return policies, executives are finding strategies that work to help alleviate some of the pain of the current HR crisis.
Here are conversation highlights between the 10 different manufacturing and service business leaders who joined our recent roundtable discussion:
Hiring is tough. Manufacturers are enticing people however and wherever they can.
- Large initial sign-on bonuses help—one company’s applicant flow tripled within two weeks by doubling the size of the bonus—but permanent compensation increases are important too, and must be clearly communicated.
- Eliminate probationary periods as job candidates want and need immediate access to benefits.
- Increase advertising for open positions and leverage multiple media types.
- Aim to hire more people than you actually need to compensate for higher turnover.
- Involve top management in hiring and recruiting activities to ensure it remains a top priority.
- Use lean to offset increasing labor costs and drive efficiencies.
Retention is even tougher. An all-hands-on-deck approach combined with incentives, and sometimes disincentives, helps.
- Money talks. Substantial bonuses—for new hires as well as the employees who referred them—parsed out over time.. As one executive said, “If we can keep them 90 days, we have a good chance of keeping them a year.”
- Invest in development for key people—both professional and personal—and require retention commitments from employees who take advantage of the support.
- Implement a no boomerang policy. One organization implemented a somewhat controversial no-return policy preventing any employee who leaves from being rehired later. It discouraged people from leaving to take advantage of a competitor’s sign-on bonus or $1/hour increase in pay.
- Annual bonuses, sales incentives, and profit-sharing help with long-term retention, but you must clearly and regularly communicate these financial incentives to be effective.
- Gather direct feedback from employees on a regular basis and continuously track employee engagement scores to foster a culture where employees feel heard and thus more inclined to stay.
- Engage corporate employees and outside consultants to help plants successfully implement and execute new retention programs and initiatives without overly straining resources. As one participant pointed out, “We realized the local plants aren’t really equipped to handle this type of lack of labor shortage.”
Forthcoming COVID-19 vaccine mandates could make an already challenging labor situation worse. Advance planning is essential to managing the impact of the new rule.
- Onsite clinics, paid time off, transportation to appointments, and incentives such as lotteries and raffles can increase voluntary vaccination rates and help companies get ahead of the mandates.
- Study thriving organizations and how they are handle policies and communication around COVID-19 vaccines and testing.
- Explore how to use attendance points to reward employees who show proof of vaccination.
- Most importantly, be transparent, methodical and empathetic when addressing growing employee concerns over workplace policies.
People shortages are daunting, but innovative approaches help operations executives make headway.
Operations executives are not shy about sharing their frustrations over the labor situation, with one participant saying it is the biggest challenge he has ever faced in his career. At the same time, they are willing to do whatever it takes to find solutions. “I never thought of workforce stability as kind of a process subjected to kaizen and countermeasures, but I do now,” said one executive.
TBM will continue to proactively respond to the issues and help our clients implement proven approaches that drive rapid results, and we will continue to share our successes and insights with you here.
Review some of our most recent articles on the talent topic.
- In an acquisition, have a plan for your people. Or plan on having a people problem.
- Reframe Your Talent Challenge: Fix the Revolving Door First
- Seize the Day: How to Embrace the Golden Opportunity in U.S. Manufacturing
Or reach out discuss your specific challenges and needs.