Use Your Best Assets to Reduce Turnover
Fri, 06/15/2007 - 11:00am
Is your production operation losing line efficiencies? When everything is running perfectly, is your operation still only maintaining current production levels? Is it difficult to imagine how you can achieve significant production improvements?
In a high-touch labor organization, a primary cause of these poor results might be your workforce.
It’s not that you don’t have some good people—the continuous turnover results in too many untrained workers who don’t understand the process, the quality standards, the safety concerns, or even how to properly run the equipment. Continuous performance improvement is difficult with over half of your work group on the job less than a year.
For new hires, acceptance by the old hands is guarded. While not always unwelcoming, longer service employees have seen so many people come and go that they are reluctant to invest time in training and developing friendships with new co-workers. Many new employees start work with a lukewarm welcome, and, with continued high turnover, even longer service employees begin to wonder if things aren’t better somewhere else.
Company owners and executives see the impact of turnover in other ways: higher worker’s compensation costs, increasing material waste, more products on hold, decreasing line efficiencies, increasing customer complaints, lost sales orders and more.
Although business managers understand that turnover is extremely costly, many don’t know what to do about it. Some choose to believe that the labor market lacks an adequate supply of quality workers, preferring to accept that turnover is a necessary, albeit substantial, cost of doing business.
If you ask a traditional supervisor for the qualities he or she is looking for in a worker, you will probably hear things like: related technical and manufacturing experience, good attendance, good attitude or “fit” and a decent work record.
If you put together a small team of your best production workers and challenge them to define what they want in a new co-worker, in addition to related work experience, you will get a long list of additional qualities like: team player, honest, has self-initiative, learns fast, hard worker, etc. Because the current work group will have to train, trust and rely on this person for 8, 10 or even 12 hours a day, the work team’s motivation for finding someone with the essential personal attributes is high, often much higher than the over-burdened supervisor’s.
Given that the current work group has high criteria and expectations for performance, it follows logically that they should be involved in the selection process. Not only will they maintain that high criteria when making hiring decisions, but by owning the process and decision, they also take ownership of the new hire’s success. What’s more, the current work group would willingly work short-handed to avoid bringing in someone who doesn’t meet their criteria. To them, a poor hire means lost time in training when that person walks out the door, and lost time in terms of personal productivity, all of which results in having to work short-handed anyway.
Implementing high performance hiring teams is the first step in creating an environment that attracts and retains the best people, aka a High Performance Work Place (HPWP). While industry norms for annual turnover range between 14 and 35 percent, depending on manufacturing segment, turnover in an HPWP is as low as four percent.
(For statistical information, click here.)
The benefits of a High Performance Work Place extend well beyond lowered rates of turnover. It continually exceeds its own goals. There is a waiting list of people who want to work for this organization and employees are proud to work there. They are challenged to give their best and they do. In return, the company treats them as adults and shows them unreserved trust and respect. Policies and management practices focus on the 95 percent of employees who are responsible, worthwhile people. The marginal five percent are dealt with quickly, respectfully, and professionally.
HPWP organizations believe that people are their competitive advantage. They believe that financial, technological and geographical advantages are usually balanced out among competitors and that what remains truly unique to the organization is its culture and its people. Therefore, hiring the very best people is the place to start in creating an HPWP.
Click here for additional information on creating an HPWP.