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Who owns employee retention: HR or operations?

The unemployment rate in the US is at 8.4 percent, which means there are roughly 13.55 million people who are currently unemployed. And yet, many companies have job openings that aren’t able to be filled, especially in manufacturing. There has been a labor shortage in manufacturing for quite a while, and Deliotte estimates that this labor shortage will be at 2.4 million by 2028.

So why the contradiction? For one thing, much of the manufacturing workforce is aging out, and these organizations are not doing enough to attract younger workers. So manufacturers are having to do more with the labor they have, and one thing is certain: employee retention has never been more critical.

Strategies for Employee Retention

So how can organizations approach the retention of employees? Is this just an HR problem or is it a problem with the entire organization? 

1. Recruit at all Levels

In the past, whenever an organization needed to hire frontline employees, they would simply put out notices and hope for the best. The whole process is very passive. Put up a job notice and see who comes through the door. And many companies have not changed the way they hire frontline employees.

It is common for companies to recruit at higher levels for salaried positions, but they never solicit potential frontline employees. With a high turnover rate, it becomes a revolving door. A survey by Jobvite found that 33% of employees quit within the first 90 days. When companies are more active in the recruiting process, they can find the talent that is a good fit for frontline positions and have a better chance of retaining them.

Organizations also need to realize that recruiting is not simply a function of HR, and direct supervisors and managers need to be just as much a part of the hiring process as anyone else.

2. Focus on Making Employees Better

A crucial strategy for employee retention involves better training. According to ClearCompany, 68% of employees say that training and development are an organization’s most important policies. Investing in better training will not only help organizations to retain employees longer, but it can also impact your bottom line. Huffington Post found that companies that invested in training had 24% higher profit margins.

If an employee is underperforming, before an organization just gets rid of them, they should consider if the employee is a better fit for another position. When a new employee is hired, managers should do everything possible to keep that person in the organization. 

This doesn’t mean you shouldn’t address performance issues. But it’s much better to turn an underperformer into a performer than it is to give up on them. Before you fire an employee, ask yourself if you have done everything possible to help them succeed.

3. Make Employees Feel Valued

Employees don’t want to feel like they are just another cog in the wheel, another number. A 2017 study from Office Team found that 66% of employees will quit if they don’t feel appreciated. This number increases among millennials.

If you want to retain an employee, it’s crucial that you make them feel valued and appreciated. It doesn’t even take much to do this. Simply saying thank you or acknowledging their hard work goes a long way. It’s important to recognize and reward employees.

You don’t want to have a mindset of “If this person doesn’t work out, I’ll just hire someone better.” Think of your employees as valuable team members, not just replaceable labor.

4. Do More to Attract and Retain Millennials

The workforce is shifting. Too many organizations are relying on experienced employees rather than focusing on developing training processes that allow them to transfer knowledge from employee to employee. And they aren’t doing enough to attract younger employees.

Millennials don’t want to just “get a job.” They are looking for opportunities to grow within an organization. 86% of millennials said they would rather stay in one organization where they can grow.

The culture within the workplace is also of utmost importance to millennials. Business Insider found that millennials who were surveyed would absolutely love to work at Google, Apple, or Facebook. Why? Because these three companies have a reputation for having strong company cultures.

5. Don’t Be Afraid of a Paradigm Shift

Too many organizations are stuck in the past. They are using outdated processes and systems, and it is a much different world than it was. If an employee has a bad experience at your organization, thanks to social media and sites like Glassdoor, they can now blast it to the world.

Another quality workers are now looking for in an organization is flexibility. There are small ways organizations can accommodate employees. Offering flexible hours, for example, is important to many employees. You also may want to have two part-time employees as opposed to one full-time employee. 

You don’t want to stick to processes that aren’t working just because “that’s the way it’s always been done.” The most important part of employee retention is having the ability to step back and reevaluate your systems and processes. 

If you are focusing on employee retention, take a look at your business. Are you the kind of organization that people love to work at? If not, what changes could you make to become one?

The pandemic has made employee retention even more difficult, and there is more of a demand on the employees you do have to perform. If your organization struggles with employee retention or is in need of performance improvement, POWERS is here for you. We are dedicated to helping your performance, and we get results in months, not years. We also offer key role support to help organizations fill vital roles. Are you interested in what we have to offer? Reach out to us today.

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About the Author

Craig Wall

Craig joined POWERS in 2016, bringing over 30 years of business experience in a diverse listing of manufacturing and industry groups. A few of these include aluminum extruding, metals fabrication, warehousing and inventory management, supplier management, steel manufacturing, optical manufacturing, and environmental & safety regulatory compliance. He has held positions as Production Manager, Operations Manager, Materials Manager, EH&S Manager, as well as project and analysis management in the consulting industry.