The Impact of Turnover on Manufacturing Costs
Are your turnover rates affecting your bottom line more than you realize? Before you dismiss turnover as a standard cost of business or a natural and unavoidable aspect of the manufacturing industry, think twice. A few small changes to your workplace or your management style can keep employees on the team for longer tenures, and turning short term relationships into long-term partnerships can dramatically cut costs and bolster your stability. Here’s how.
Longer Tenures Mean Higher Levels of Institutional Knowledge
If you look around your manufacturing workplace and see mostly new faces, you probably see enthusiasm, high energy levels, a general sense of ambition, and an eagerness to please and impress managers and supervisors. But here’s what you don’t see: ingrained positive habits, an in-depth understanding of company goals, respect for the status quo, lower error rates, and a willingness to teach and lead as well as learn and follow. To move from the first to the second, you’ll need to raise the average tenure on your shop floor.
Longer Tenures Boost Your Reputation
If your employees enjoy working here and are happy to stay, this positivity will have a ripple effect that extends beyond the walls of the company. Your brand and your reputation will extend to friends, family, and wide social and professional networks. As a result, you’ll hear from more and better applicants when you post an open position.
Short Tenures Mean High Risk and Training Investments
If an employee comes on board and stays for less than one calendar year, you may see this as a benefit – especially if the employee seems mistake-prone or has a minor attitude problem. But look closer. If the hiring cost for the position approaches or exceeds the employee’s annual salary, this practice isn’t sustainable. Consider coaching and working with an imperfect employee instead of letting them walk out the door … taking your training investment with them.
Minor Changes Improve Employee Satisfaction
A few small changes that make your workplace feel safer, cleaner, more respectful, or more positive can encourage burned-out or ambitious employees to stay, instead of seeking work elsewhere. When you compare the cost of these improvements with the cost of hiring and staffing during the same year, the difference may surprise you. Even if these improvements include regular salary increases or expanded benefits, the numbers are likely to work in your favor.
For more information on how to improve your workplace, boost your reputation, improve your management style and reduce your overall turnover, contact the expert staffing pros at Lift Temp.