Manufacturers on the importance of staff retention and ways to improve it

Manufacturers on the importance of staff retention and ways to improve it

Manufacturers on the importance of staff retention and ways to improve it

With the pandemic causing the skills shortage to worsen and one in two manufacturers struggling to fill job vacancies, staff retention is more vital than ever.

Make UK’s 2022 labour turnover report shows a churn rate over the past 12 months (excluding redundancies) of 25%, the highest seen for years and significantly above the 15% UK average across all sectors.

A high turnover rate carries both short and long-term consequences. Replacing an employee costs time and money both directly (advertising and agency fees) and indirectly (senior team members interviewing candidates rather than performing core roles). The subsequent onboarding and training of successful candidates cost more time and money.

A longer-term downside is reduced productivity while a new joiner adjusts and gets up to speed, as well as the cost of vital knowledge and experience lost due to departing staff. There are also hidden costs such as the impact high turnover rates have on staff morale and external stakeholder perceptions. 

With the UK seemingly at full employment and the government looking to lower the country’s dependence on foreign workers, retaining employees has never been so vital. Yet, 55% of employers find retaining staff more difficult than pre-pandemic, according to recent Glassdoor research.

A recent Discussion Group chaired by Jonny Williamson explored how Made Members approach staff retention and strategies for future success. The roundtable-like conversation followed an informative presentation from Jamie White, Director at Coventry-based diamond tooling specialist, Exactaform.

Jamie explained how his company is aiming to grow and scale but retain the flexibility and service level of a small operation. All those in the Discussion Group agreed that growth was a key focus for them and that it was the workforce that was going to deliver it. Therefore, keeping employees engaged, motivated, happy and healthy had moved from being ‘soft and fluffy’ to business critical.

A culture for success

The leadership team at Exactaform knows what it takes to achieve growth. Over the past 10 years, turnover at the company has risen from £1.5m to £10.5 with the workforce increasing from 10 to more than 70.

While desirable, such a high level of growth has put employees under tremendous pressure to deliver. Exactaform has implemented a four-pronged approach to manage this pressure and help further boost retention, including:

  1. Creating a working environment that is clean, well-lit, organised and comfortable with social areas such as a canteen and gym facilities.
  2. Offering employee assistance programmes, pension packages, bonus schemes, flexible working opportunities and recognising an Employee of the Month.
  3. Ensuring company goals and progress towards them are clearly communicated and understood, and that each individual can relate their role and targets to the wider mission.
  4. Enabling employees to continuously develop their skills through a blend of internal coaching and external training.

Flexible working

Workers are increasingly citing flexibility as a priority in their decision to either remain with a company or accept a position elsewhere. Though not a new trend, flexible working has certainly been accelerated by Covid-19 and working from home.

According to Make UK, 90% of manufacturers now offer flexible working and regular remote working to non-production staff. Shop floor workers, however, are more likely to be allowed to choose their shifts or come in early / late and consequently leave early / late.

Exactaform offers exactly this and has found it to be widely appreciated by staff while being cost-neutral to the business. From experience, Jamie advised not to make the offering too flexible or open-ended. He recommends establishing clear restrictions from the outset to ensure workers can take advantage without overstepping the line.

Strong leadership and communication

Another crucial factor in retaining staff is having great managers and leaders who lead by example, inspire their team and communicate effectively.

More than two in five employees in the UK have left a job due to “poor management,” according to research by Visier. More worrying is that more than half of those polled are considering leaving their current jobs because of their manager.

Given the importance of leadership and the shortage of management skills in industry, it’s surprising that manufacturers spend less than 10% of their training budgets in this area. 

The group discussed the pros and cons of formal management training, with one questioning what candidates actually gain from it. Another noted that training someone to use a machine has an instant outcome and a direct link to growth targets. Management training, however, can be perceived as less tangible and therefore not an immediate priority.

There was also a general feeling among the group, particularly those representing SMEs, that managers were so busy they had no time to step away and undergo training.

On training more broadly, several expressed concerns over training an individual and having them then leave the company. To which one attendee replied with the famous Henry Ford quote: “The only thing worse than training your employees and having them leave is not training them and having them stay.”

The discussion concluded by highlighting the importance of finding reputable, trusted training providers, with one attendee stressing the benefits of word-of-mouth recommendations gleaned from speaking with other Made Members.

Meet, confer and share best practice 

Opportunities to openly discuss and consider challenges, opportunities and solutions are why the Made in Group’s Virtual Breakfast Mornings are so invaluable.

Eighty minutes out of your morning to hear inspiring and thought-provoking conversations, build relationships with like-minded fellow manufacturers, and gain a clearer picture of what’s happening beyond your factory gates.

We look forward to seeing you at the next one:

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*Header image courtesy of Pixabay