PROBLEM
A manufacturing company in the area has been around since 1977. They manufacture a sheet metal based product sold throughout North America. It is a family owned and operated business with a workforce of 130, 85 of those are hourly rated. It is a non-union environment. Their sales for the year will total approximately $18 million.
This company has a reputation of having a high turnover rate amongst its employees, primarily the hourly rated. They have always fought this problem. Over the last year, the problem is becoming more and more critical as senior level managers are leaving. In fact, a Materials Manager, a Plant Manger and an Industrial Engineering Manager hired at different times during the last year all left within 2 months of their start date.
SOURCES
Management
- When these people start work, is direction provided from the General Manager. Do they know what their goals are going in and when they get there.
- Are they given the proper tools to get their job done efficiently and effectively.
- Are the salaries they’re being paid competitive in the marketplace.
- Is management hiring staff who fit in with their culture. I.E. would hiring somebody from an automotive, unionized culture fit in with the dynamics of the organization – probably not!
- Are employee’s struggling with the culture. Is the fact that this is a family business playing a role in the high turnover rate. Some people feel uncomfortable working in family settings if the company is not being run properly.
Employees
- Do the people being hired have the right skills to do the job. Are they under qualified or overqualified.
- There is a negative reputation in the marketplace about this company regarding their turnover problems. Are new hires going in with the pre-conceived notion that the chances of this working out are slim.
- Do the employee’s care. Are they using this as a stepping stone to their next position based on the company’s reputation.
- Is the reputation in the marketplace a result of the high turnover rate or are there other factors. I.E. Are employee’s speaking poorly about the company to associates, friends, family etc…
METHODS
- There is no Human Resources Department within this company. All Sr. level hiring initiatives are handled primarily by the General Manager and the Vice President of Finance. Both individuals are unqualified (in my opinion) to be hiring at this level. They could very well be hiring people who don’t fit the specified job or the culture. I would suggest that these individuals be educated in proper screening, interviewing and hiring techniques. This is a TRAINING issue.
- Review the job descriptions. Is the person able to do what is required of them based on the resources available. OPERATIONAL
- Has the culture of the organization played a role in the high turnover rate. All indications point to YES it has. Make management aware that their style is not working. The owner and General Manager are very confrontational based on information received. They need to be made aware that this style has no place in the new millennium. This could be done through an off-site training program. ORGANIZATIONAL/TRAINING
- Some Managers are leaving for better salaries. Bring the salaries in line with industry standards. I.E. An Industrial Engineer who is university educated and has 3 years experience will command a salary of at least $50,000/yr. If you pay him $45,000 (which they are) he will keep an eye open and seriously consider opportunities that pay what he’s worth. ORGANIZATIONAL
- Address the issue of the negative reputation in the marketplace and amongst the employees. Stop pretending like it doesn’t exist. ORGANIZATIONAL
- Make sure that the employees understand that a high turnover rate will affect productivity and eventually their jobs. They must feel confident about their company and speak highly of it. It is up to Management to make them feel this way. To convey this message they need to educate them with memos or through meetings. TRAINING
SOLUTION
I think training is needed here for both the employees and the management team, more importantly for Management. To improve hiring efficiencies so they’re not bringing in people who don’t fit the job, they could bring in a Human Resources Manager. If they don’t want this to be a full-time position, they could make it part-time or consider using a consultant.
If they insist on doing the hiring themselves, it is critical that they begin to educate themselves on proper hiring techniques. Whether it is through literature on the subject or formal educational sessions, it must be done.
From an organizational standpoint, they need to work on their reputation both internally and externally. The “dictator” management style doesn’t work anymore. They need to take a different approach.
From an operational point of view, management must ensure that the employees and Sr. level managers have the resources they require to successfully do their job. It is a waste of everybody’s time if staff know what they need to do, but don’t have the resources to get it done. This will only cause frustration and will eventually lead to employee turnover.
Although I’ve singled out issues from each viewpoint (training, operational and organizational) I feel that this is a situation in which training is definitely warranted and required. If they can keep employee’s longer, improve employee morale and rid themselves of their present reputation, they will be able to take an already profitable and successful business to a new level, thus justifying the costs of a developing a training program.