Employee retention has been a long-term struggle in the manufacturing sector, but market instability is making turnover more expensive than ever. HR consulting firms estimate that it costs an average of $3,500 to more than $10,000 to replace each hourly employee. But the labor shortage, inflation, and other market factors could dramatically balloon these costs if a position goes unfilled for too long.
With many manufacturers still recovering from the pandemic, these costs could be devastating. In 2021, the turnover rate reached 39.9%, a record high for the industry. Improving worker retention needs to be a cornerstone of any growth or recovery plan, but what are the most effective strategies?
5 Ways to Improve Worker Retention
There are many worker retention programs and strategies to choose from, but all of them have one thing in common: They tangibly improve employees’ experience at work. Your company benefits as well, not just from lower labor costs, but from the impact of more engaged and happier employees. Here are five strategies to keep your talent happy:
1. Evaluate Compensation Plans Regularly
Oftentimes, companies don’t evaluate their compensation frequently enough. Employees should be rewarded for exemplary work and it is less costly to keep a high-performing existing employee than to try to hire and train new employees. For maximum employee retention, companies should develop sound compensation strategies that keep up with the times.
2. Support Career Growth
Workers like to overcome challenges and expand their skills at work and are happier when they feel empowered. At the same time, manufacturing is suffering from a major skill gap. These two issues dovetail nicely, as both can be solved by vocational training. Providing a formalized program on-site or paying for additional education for your existing workforce are great ways to support their professional growth, which benefits both your employees and your company. Talent that feels supported to expand their horizons are less likely to leave and explore other opportunities.
3. Be Responsive to Feedback
A 2021 study by Arcas found that workplace conflicts are one of the leading sources of job dissatisfaction. More than 40% of respondents are less motivated at work when conflict goes unresolved, and 5% even resign from their positions entirely. Management teams that keep an open line of communication with employees are less likely to encounter conflict. And if they do, the open channels help de-escalate and resolve problems quickly.
4. Recognize Hard Work and Expertise
People aren’t just motivated by money at work — they want to achieve goals and make a tangible contribution to the company. Formally recognizing achievements through awards or employee of the month programs can inspire higher performance and acts of service in the workplace. Setting goals with employees and tracking their progress improves both productivity and retention, since workers are more motivated to stay in an environment where their hard work is recognized and appreciated.
5. Improve the Workspace
Employees spend a minimum of 40 hours each week on the shop floor — a significant portion of their waking lives. Making the environment they’re in as pleasant as possible will help keep them around, and switching to high-performance cutting fluid is the easiest way to do that. Coolants in the TRIM® line are resistant to bacteria, tramp oil, and foam and minimize operator irritation, leading to improved employee morale.
Cutting fluid touches every part of a machining operation — including the workers. Investing in people positively affects their day-to-day lives and can improve your company’s bottom line as well. To learn more about TRIM® cutting fluids and the impact they can have on your operation, call +1 800-537-3365 or email us at [email protected].