Stop waiting out the labor shortage. Put proven tactics to work today.
Finding and keeping qualified human capital is in no way a new challenge for manufacturers. However, the global pandemic has exacerbated the issue and labor shortages seem to be one of the longest-lingering consequences of the crisis. Yet, with the new year underway, manufacturers need a go-forward strategy that can help keep lines staffed to meet customer demand now and in the months to come.
Here are six successful tactics that can be quickly put to work in your business to help you gain and keep a human capital edge.
6 ways to find and keep good people in 2023
- Identify where and why turnover is happening
- Resist the temptation to just throw money at the problem
- Consider how often you are reassessing compensation
- Diversify your recruiting channels to find the right talent
- Stretch out your onboarding process
- Have a plan for what’s next
- Identify where and why turnover is happening. Even in this market, companies shouldn’t accept turnover out of hand. Keeping it to 1% or less per month is ideal. However, according to our recent LinkedIn poll*, the majority (57%) of responding companies report turnover of 25% or more!
Stopping the bleeding starts with finding out what’s causing it. If turnover is primarily happening among new hires, then the onboarding process could be at fault. If tenured employees are the ones jumping ship, then there are other root causes at play.
Instead of assuming you know what it is, go out and ask your people directly. Find out what needs to change to keep people on board. Only then can you put together a resolution strategy specifically aimed at solving the real problems.
We recently helped one consumer consumables manufacturer conduct this type of assessment to address 40% annual turnover and chronic job vacancies. Within three months of diagnosing its challenges, the company reduced turnover to 15% and reduced open positions from 19 to 0. Read the full case study here.
- Resist the temptation to just throw money at the problem. Most LinkedIn poll respondents (58%) believe the top reason for turnover is non-competitive wages. Money could very well be part of the issue. But again, try not to make assumptions. And be aware that even if wage increases for new employees are warranted, they should not be initiated without doing a holistic review of your wage structure first. If you begin bringing in new people at higher wages than exiting employees, it is likely to create resentment that will make your human capital issues worse instead of better.
Instead, consider where wages may need to be increased across your entire organization. Also consider how these increases can be paired with other human capital improvements or programs to create a more sustainable acquisition and retention strategy. On their own, wage increases may allow for some temporary stabilization. But any successful program must also include tactics that will keep employees motivated longer-term.
- Consider how often you are reassessing compensation. Ideally, companies should not need to conduct a compensation assessment more often than every 24 months, and many organizations can go even longer than that. However, 50% of poll respondents said they’ve reassessed compensation structures in the past six months. If your company is looking at compensation more frequently than every couple of years, this could be a sign that wages are not the primary or only issue contributing to turnover.
Instead of another compensation assessment, consider a broader talent strategy review. This more holistic assessment will give you additional insight into your human capital strengths and weaknesses and may reveal other, more impactful levers you can pull to address the real root causes of turnover and talent challenges hampering your business.
- Diversify your recruiting channels to find the right talent. Nearly half (49%) of survey respondents are finding success with online recruiting sites. While these resources can certainly be part of your talent acquisition plan, don’t rely on them to do all the heavy lifting. Get creative and make use of a wide variety of resources to help your company find the best talent out there.
One strategy that can be highly effective is an internal referral program. This, of course, works best if your people are satisfied on the job. Focus on how you can become a “Top Employer of Choice” by creating a positive and rewarding workplace culture. When you do, your reputation in the community will go to work for you. And your employees will be more willing to bring on people they know if they believe they are introducing them to a high-quality organization. If you can sweeten the deal by offering referral bonuses, all the better.
- Stretch out your onboarding process.Most poll respondents (58%) said their company’s onboarding process is between one and four weeks long. While companies often want employees trained quickly, factory floor employees usually need more time to get up to speed. It is important to take a closer look at the activities happening during that onboarding program. Make sure the program lasts for the expected duration. What seems like four weeks might only have one activity per week for each of four weeks. To determine the consensus in your organization, conduct your own poll. And if employees are wanting a more robust program, consider increasing the duration and adding more meaningful content, combined with hands-on-training, to the agenda.
You can use the same poll to ask employees what activities and opportunities they’d like to see more of during onboarding. We always work with our clients to develop a skills matrix, a learning checklist, or other measurement tool to gauge skills development and learning during the onboarding session. This can help you track the effectiveness of your program as well as the progress of each new hire.
- Have a plan for what’s next. If you have a lot of open requisitions, you may not be thinking beyond filling those roles. But the people you bring in want to know there is a development plan in place for vertical or horizontal movement within the company. After all, nobody wants to stay stuck in the same position forever.
While 58% of poll respondents do not have a formal professional development program in place, those organizations who do have a much easier time of keeping people on board for longer periods. Providing a defined path for growth and promotion, along with the training to move forward, is one of the best ways to keep employees motivated, productive, and engaged.
If you’re just now starting to define and develop a training protocol, work to incorporate a mix of tribal knowledge, hands-on work experience, and technology into the program. While new employees can benefit from learning directly from veterans, digital training has many advantages, too, and it is often appealing to new and tenured associates alike. Digital formats eliminate the need to take an experienced worker off the line for long training sessions. It also enables on-demand training, allowing employees to work at their own pace, location, and time.
Talent challenges won’t fix themselves. But proactive strategies can give you the edge you need.
More and more, manufacturers are realizing that waiting out the labor shortage isn’t a viable strategy. Companies that want to win need people to do it now. And finding and keeping people today means you need a human capital management strategy that fires on all cylinders. Starting with these six proven tips can help you realize rapid improvement in your turnover rates and number of open positions. And it can lay the foundation for human capital excellence that defines world class employers.
* The results are based on approximately 1,635 participants including manager to VP levels in industries across manufacturing, logistics, technology, retail, and engineering.