TL;DR: It’s all about your employees. Retain them. Engage them. Grow them.
We heard three themes from manufacturers last week at MFGCON19 in Winston-Salem, NC. The same concerns were raised by small, medium, and large manufacturers throughout the event.
1. Employee retention
Manufacturers are concerned about retaining all generations of employees, from highly-skilled boomers to super-techy millennials. The direct costs to replace talent are north of 33% of the typical salary. The indirect costs are painful, too: quality, morale, organizational learning, just to name a few.
4 out of 5 manufacturers are concerned about the loss of talent through employee attrition.
It’s no surprise that employers are struggling to replace good talent with the unemployment rate so low right now. The best team members can find a job at a competitor or another manufacturer so quickly, that you have to be creative about ways to retain them.
In North Carolina, over 474,000 people in the state are employed in manufacturing. Manufacturing accounts for 20% of NC’s total economic output, which puts NC at the 5th largest state manufacturing economy in the US. NC is an expert in making things with big and small manufacturers all across the state.
“Retaining good talent is no longer just about compensation. Employee participation is about how they are actively engaged and stakeholders in the process,” says Jennifer McNelly of the American Society for Safety Professionals, which brings us to priority #2.
2. Employee engagement
Since employees can move to the next manufacturer for a better paycheck, manufacturers are looking for ways to keep them engaged in their work. Better engaged employees are less likely to leave for a small pay raise.
One important question to answer when you consider employee engagement: do individuals feel that they have autonomy to improve their work?
The key to engaging employees is through Autonomy, Mastery, and Purpose, says Dan Pink. Employees must have the autonomy to make an impact on their work, or why should they even care?
Employees are tired of the shiftly grind which simply requires them to show up. They want to have control over their work and make an impact. We heard from plant managers that you don’t have to make big changes to engage employees. Even the smallest initiative such as giving employees control over continuous improvement initiatives.
“Employees are the best source for continuous improvement ideas,” said Howard Nystrom of JMC Tools, a partner at a machine shop who says that their culture holds continuous improvement as a value. “Culture seems like an overused word, but I lead by example,” he said when asked how he achieved that culture.
When employers look for the strengths in their employees and empower them to make an impact in their work environment, Gallup measured 17% increased performance, 70% fewer safety incidents, and 21% increased profits for employers.
3. Employee growth
Employees know that the skills they have today are not going to be as relevant in 5 years. “It’s not about skills for life, it’s about lifelong learning,” says Jennifer McNelly, “The only constant that exists is change.”
2.4 Million jobs are expected to go unfilled due to the skills gap in manufacturing. That represents $2.5 Trillion in reduced output in the United States through 2028, according to a Deloitte study.
Employees want to learn new skills so that they can continue to be productive and competitive in the labor force. They will continue to work for a company that continues to invest in them.
We heard examples of employee growth such as rotating positions through other parts of the manufacturing plant such as the stockroom, finance, and IT. The different perspectives of the manufacturing process gave the employee a better grasp on her job when she rotated back to it.
Most companies cited that 70% of skill set comes from on-the-job learning. At a time when employers are thinking critically about the return on investment for classroom learning, job rotation and cross training can be more effective for your teams.
The technology adoption rate is faster than it has ever been before, says Ted Abernathy. Employers need to lean on the generations of the workforce which have an eager drive to learn and implement technology in the manufacturing environment. There are a lot of cheap and easy to implement tech solutions for manufacturers that can let employees practice new skills and make an impact on their work.
Now that you know the top priorities of manufacturers for 2020, do you agree? Are you focused on other priorities? We want to hear from you.
We, at Ampogee, believe in Total Employee Involvement in your manufacturing goals. We know that you need 100% of your employees engaged in solving your problems, or you won't be able to compete in the marketplace today. Reach out to learn more about how we help companies see 10% improvement in productivity with happier, more engaged employees.