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Who Owns Employee Retention: HR or Operations?

Who owns employee retention: HR or operations?

Finding New Skilled Workers and Employee Retention Has Never Been More Critical, Especially in Manufacturing

The unemployment rate in the United States stands at 3.6 percent, which means there are roughly 5.9 million people who are currently unemployed. Despite the vast improvement in the unemployment rate in the last twelve months, many companies have job openings they still cannot fill, especially in manufacturing. There has been a labor shortage in manufacturing for quite a while. Current estimates put the shortfall at 2.4 million by 2028.

There are well-reported issues affecting labor in manufacturing, but two stand out. First, much of the manufacturing workforce is aging out or has retired recently, taking decades of experience and on-the-job knowledge with them. In addition, the manufacturing industry is not doing enough to attract younger workers.

The National Association of Manufacturers reports that despite an increase of 349,000 in manufacturing labor in 2021, the most significant single-year addition since 1994, manufacturing still has 219,00 fewer workers than before the pandemic began. So, despite the improving labor picture, manufacturers have to do more with the people they have, and one thing is sure: employee retention has never been more critical.

Strategies for Drastically Improving 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 Employment Levels, Especially Frontline Leaders

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 rarely 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 by Investing in Training and Development

A crucial strategy for employee retention is investing in their training and development, especially as they move up in your organization. According to ClearCompany, 68% of employees say that training and development are an organization’s most important policies. Investing in better training will help organizations 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 directive doesn’t mean you shouldn’t address performance issues. But it’s much better to turn an underperformer into a performer than to give up on them. So before you fire an employee, ask yourself if you have done everything possible to help them succeed.

3. Build a Company Culture That Values Employees and Contributions at Every Level

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, who actively seek employment with organizations with healthy workplace cultures that make them feel connected and valued.

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. Therefore, it’s essential 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.” Instead, think of your employees as valuable team members, not just replaceable labor. Simply put, if you don’t value employees, they will leave.

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.” Instead, they are looking for opportunities to grow within an organization and be connected to something they believe in. Despite the bad rap many young workers get, 86% of millennials said they would rather stay in one organization where they can grow.

The company culture 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. Creating a healthy company culture is one of your organization’s most significant pursuits to improve employee retention. Be the place that people want to show up to every morning.

5. Don’t Be Afraid of a Paradigm Shift

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

Another quality workers are now looking for in an organization is flexibility. There are small ways organizations can accommodate employees. For example, offering flexible hours or hybrid working situations are essential to many employees. You also may want to have two part-time employees instead of one full-time employee.

You don’t want to stick to processes that aren’t working simply because “that’s the way it’s always been done.” The most important part of employee retention is your organization’s ability to step back and reevaluate its 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 Conclusion? Employee Retention is “Owned” Across Your Organization

Employee retention may begin with your HR team hiring the “right fit” employees to start with, but keeping them is the job of everyone in the organization, from the top floor to the shop floor. As evidenced by recent workplace phenomena like job “ghosting” and the “Great Resignation,” employees leave unhealthy company cultures and get away from poorly-trained managers in record numbers. Therefore, building a workplace culture that employees want to grow with falls on everyone.

The POWERS Difference

The pandemic has made employee retention even more complex, and there is more of a demand on the employees you have to perform. If your organization struggles with employee retention or requires performance improvement, our team is here for you. We are dedicated to helping you build the kind of workplace culture that increases performance and attracts and retains talented employees. We also offer critical role support to help organizations fill vital roles. 

POWERS management consulting’s unique Culture Performance Management™ methodology connects the dots between optimized company culture and your desired operational performance outcomes. A healthy workplace culture contributes significantly to employee retention.

POWERS has helped global leaders across many industries operationalize their culture for rapid and sustained performance improvement, increased competitive advantage, greater value, and a stronger bottom line.

To put our experienced team and proven track record to work for you, schedule an initial discovery and analysis by calling +1 678-971-4711, or emailing us at info@thepowerscompany.com.

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About the Author

Craig Wall, Chief Delivery Officer

Craig Wall

Chief Delivery Officer

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.