Time is money. It’s an expression most are familiar with, but few know it to be truer than manufacturers. Time spent away from the manufacturing line is often perceived as time and money lost. And when manufacturers consider dedicating valuable time toward training on core management skills, it may feel like lost productivity. However, the opposite is true. This short-term investment is proven to reap long-term results.
With manufacturers’ focus on delivering a quality product, many companies may overlook building critical soft skills in favor of investing in employees’ technical skills. But, from the ability to effectively interview job candidates and make good hires to properly onboarding new employees, the American Management Association has identified 14 core competencies that leadership should cultivate through training in order to build and retain a healthy and highly effective workforce. Investing in this kind of solid management training will ultimately boost your bottom line. Here’s why.
Improves Employee Productivity
When it comes to improving productivity––and therefore improving profitability––an employee’s own motivation is a powerful factor. When employees feel appreciated, heard and valued, company morale improves, which often leads to a more engaged, energized and efficient work performance. Cultivate a company culture that people want to be in, and they will stay, they will work, and they will invest their time in you and your product.
Effective leaders are your greatest asset in accomplishing this. Ultimately, managers are the hands, mouthpiece and face of a company to its employees. In light of this, developing managers’ ability to set goals, build teams, manage change and conflict, actively listen, conduct reviews or corrective action and other core competencies form the foundation of a well-performing company.
We have seen managers themselves affirm this. After holding a leadership development course at one company, managers formed study groups on their own time to ensure they were fully grasping the core competencies. They were committed to not only developing themselves but the teams that look to them as leaders and pacemakers. This is one example among many that underscore how employees will not do the bare minimum if you don’t give them the bare minimum.
From my experience, employees don’t leave bad companies; they leave bad managers. Retention is especially critical in the manufacturing sector, which saw a turnover rate of more than 30 percent in 2017. The issue of retention comes down to a company’s commitment to provide its supervisors and managers with the tools and training needed to become professional and relational leaders. Often companies fall into the trap of throwing employees into management positions based on tenure without equipping them with the skills and knowledge they need to succeed. Unfortunately, the skills that make a star employee typically do not translate into becoming a star manager.
Properly trained managers play a key role in reducing turnover. Studies have shown the first 90 days determine whether a new hire will stay and how productive that hire will be. Ultimately, managers set the tone for that individual’s first 90 days and longer.
When you invest in developing effective managers, the trickle-down effect is better employee performance and productivity, reducing employee turnover. One of the chief reasons people leave a company is greater opportunities to grow—not necessarily higher pay. It’s a simple principle: Investing in an employee’s professional development incentivizes that employee to invest in you. If your company doesn’t make an investment in developing people, chances are your competitor will––serving as a critical differentiator for job-seekers.
Lowers Unnecessary Costs
It is far more expensive and disruptive to replace an employee than it is to invest in the employees you have. In fact, economist Bill Conerly indicates the key to improving employee retention is knowing what turnover costs your bottom line. While this cost differs from company to company, general estimates suggest the turnover cost of an entry-level position at 50 percent of salary; 125 percent of salary for a mid-level position and more than 200 percent of salary for a senior executive.
By investing in management training, we have seen companies improve their turnover rate by 3 to 4 points––reducing overall absenteeism and legal exposure and translating into significant savings. With this in mind, don’t let the short-term cost of professional development programs blind you to the long-term benefits to your bottom line.
What you give is what you get. It’s a universal principle I have seen hold true for companies across sectors. We’ve trained managers of small businesses, and we’ve also worked with global corporations that employ more than 50 nationalities and require at least five different translators in a single training session. But regardless of a company’s size or employee makeup, people and product will always be directly related. Building a culture that attracts and retains quality employees, reduces turnover and boosts your bottom line starts with building better managers. Invest in training that develops your people, and you will be inherently building a better process and a better product.
Shelly Gary is president of ProManager.