Prevent Turnover: Take Steps to Retain Skilled Talent
Jeannine Kunz, Vice President, Tooling U-SME on
June 27, 2019
Today’s blog is the first of two related issues raised in the 2019 Tooling U-SME report, “The True Cost of Turnover: Hidden Costs Go Beyond Financial to Impact Productivity and Culture.”
Every day we hear from companies, big and small, across all industries how difficult it is to find skilled manufacturing talent after experiencing turnover. The real issue is how to retain skilled talent to prevent turnover from occurring in the first place.
According to a recent Tooling U-SME report — “The True Cost of Turnover: Hidden Costs Go Beyond Financial to Impact Productivity and Culture” — 43 percent of manufacturers report an average 20 percent or higher annual turnover. While it’s healthy to lose low performers, losing high performers and potential high performers is concerning.
So, what can you do to keep them? Human Resource managers say that the first year is critical in determining an employee’s longevity with a company, and that much of the turnover in the manufacturing industry comes from new hires. Strong introductory programs such as onboarding, mentoring, upskilling and career-path outlining can help get employees through the first year.
From that point on, continued investment in employees is critical to keeping them. While it’s normal for investment in training to decrease as competency in a job role increases, continued training shouldn’t stop — it is still essential for upskilling, learning new technology and progressing within a career. This ongoing investment increases an employee’s contribution to the company, improving productivity and retention. If incumbent workers feel they are no longer valued because they see new employees getting all the training and attention, they may start looking elsewhere — or at the very least be receptive to recruiters who promise them higher pay and a better work environment, a common occurrence in an era of low unemployment. According to Tooling U-SME’s “Industry Pulse: Manufacturing Workforce Report,” the number of unemployed people per opening used to be about seven, but now it is only one.
According to the same report, many companies have tremendous opportunity for improvement when it comes to upskilling. Only one in three budgets for employee development, and manufacturers frequently complain that they can’t afford to invest in a standardized training and development program — even though the cost of such a program would be much less than their annual cost of turnover. In fact, voluntary turnover is costing organizations hundreds of thousands up to millions of dollars.
But there’s good news amidst the bad: The majority of reasons people voluntarily leave a job are preventable. According to the Work Institute’s “2018 Retention Report: Truth & Trend in Turnover,” three of the top reasons people leave a company are career development, compensation and benefits, and job characteristics — and 77 percent of the employees who quit could have been retained.
As the 2018 “Industry Pulse” report makes clear, the best way to retain employees is by ensuring their satisfaction on the job. Take a cue from high-impact learning organizations, which help ensure employee satisfaction with:
- Solid onboarding, mentoring and job qualification programs
- Modern blended learning and development curricula
- Clearly defined career pathways with skills compensation plans
Holding on to skilled manufacturing talent is just one of the aspects of dealing successfully with turnover. For Tooling U-SME’s full “True Cost of Turnover” report, click here.
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