Instead of figuring out where to find your next skilled hire, focusing on the employees you have is just as vital in a competitive job market
By Kaylee Swearingen, Marketing Specialist, Mazak Optonics
As of January 2018, the unemployment rate has steadily been at 4.1 percent in the United States according to a press release by the U.S. Bureau of Labor Statistics. The release also added that payroll employment has continued to rise for manufacturing, adding 186,000 jobs in the past 12 months. With low unemployment, that brings confidence to workers knowing they can find a better job. The quits rate is back to pre-recession peak of 2.2 percent.
High employee turnover can reduce productivity, increase costs for businesses, and leave organizational goals unmet. With always having to replace employees that means there is more training and more errors overall reducing productivity. The cost to fill an entry level position is a minimum of $4,000, increasing with higher level positions.
With limited skilled workers, more jobs, and higher quit rates it makes it that much more important to keep the employees you have happy. With the current war on top talent, how do fabricators keep their top employees?
The top five ways to reduce turnover and increase retention
Hiring the Right Leaders
Employees don’t leave companies, they leave managers. At 75 percent, the number one reason people quit is because of their bosses. Leaders build relationships with trust, respect and credibility. There are many ways to improve management skills but the top qualities of the best leaders are clear communicators, willing to give credit and demand accountability, open-minded, delegate effectively and are always looking to improve. Training is something that should be considered for managers at all levels. Reducing turnover also needs to be tied to management development. The purpose is to help managers experiencing hire turnover determine what the root cause is and work with them to correct this issue.
Investing in employees - total compensation package
Investing in employees is incredibly important. Employees want to feel valued and know that they are being appreciated, not only through their salary but also through mentorships, career growth opportunities, and voluntary benefits. These voluntary benefits range from life insurance, critical-illness insurance, identity theft protection, pet coverage, financial counseling, and so much more. As employees age,priorities can shift. With the average millennial college graduate’s student loan debt being at roughly $37,000, financial well-being and counseling are important. As for baby boomers, many are struggling with issues surrounding aging parents and critical illness insurance is something they are thinking ahead on. If you can’t offer the highest salary, look into creating a comprehensive benefits package to help stand out from your competition and retain your employees.
Prioritizing work-life balance
The work-life balance is juggling between personal-life and working. There are many steps that companies are taking to promote a better work-life balance. Flexible benefits help employees have more freedom and responsibility to create a healthy and comfortable environment that makes them more happy to stay. There are health benefits programs which have been highly effective in improving productivity and employee’s health. Flexible work schedules have also become a very popular option with work from home days and different arrival/departure times to get 40 hours a week. Flexible work hours help to accommodate people’s lives outside of work.
Connecting everyday work to the overall goals of the company
Employees want to know and value that their everyday tasks are linked to the company’s overall goals and mission, it can help companies reach their goals and boost success. Everyone needs to know that what they are doing is a key part to the company’s success. If employees are unaware of the organization's goals they won’t care and won’t work to continue to grow and succeed. If their routine tasks are not seen as a part of the big picture they won’t see a point.
Through recognition, appreciation and gratitude a company can strength company culture and strength employee relationships. Having open and honest communication with your employees while giving feedback and recognition can have positive effects in the workplace. By showing gratitude in the company culture, employees are more willing to go the extra mile on helping out. There is no one-size fits all approach to employee appreciation. Often the most effective method of appreciation is a simple thank you or good job. Other ways to show appreciation are through corporate events and outings. This can be as simple as a pizza party or as big as employee appreciation week.
Companies have many options with reducing turnover and retaining top talent. Through hiring the right managers, a comprehensive compensation package, prioritizing work-life balance, connecting everyday work to organizational goals and through employee appreciation, these steps can help you win the war on talent. Ensuring a productive work environment that encourages positive, effective working relationships and open communication are key to creating a culture employees don't want to leave.