Amanda Del Buono interviews Joe McMurry, peer group solutions consultant for the Purdue Manufacturing Extension Partnership, about how manufacturers can reduce turnover by improving their employee retention strategies.
Transcript
Editor's Note: Hi everybody, this is Amanda Del Buono here. I just wanted to leave a quick note before we start this episode today. This episode was recorded at the beginning of 2020, prior to the coronavirus outbreak. So please know that the comments about the unemployment rates have changed since this was recorded. Thanks. Enjoy the show.
Hello, and welcome back to another episode of "Manufacturing Tomorrow's Workforce." As always, I'm Amanda Del Buono. It's not news that manufacturers are having a difficult time bringing in new people. But once they're in the door, manufacturers need to put just as much effort into keeping them there. Today, we're going to be talking workforce retention with Joe McMurry, peer group solutions consultant for the Purdue Manufacturing Extension Partnership.
Joe, thanks for joining me today.
Joe: Thanks, Amanda. It's great to be here.
Amanda: So, I just wanted to kind of start out simply by asking, what is employee retention? Why should it be important to our manufacturers today? Does everybody need to have the Google reputation of, kind of, a free for all in their companies to be able to keep people, or what are we looking at today?
Joe: So, employee retention is basically creating an environment where your employees want to stay with your company. And manufacturers, in particular, are struggling with this right now, in part because unemployment numbers are so low, and there's a lot of jobs available. And so, a lot of manufacturers are really struggling to keep full staff and to get them to show up every day. That's another issue that's going on, so attendance as well. Why is it important? Well, of course, if we don't have a full complement of people on a given day, then we struggle to meet customer demand. And a lot of manufacturers are struggling with this, just not having enough people to meet all the demand that they have.
Another thing, of course, is that if we have turnover, we tend to drive up our costs. Hiring an employee is much more expensive than keeping the ones we have. In order to bring them aboard, to retrain, or to train brand new employees versus continue the training with the employees that we have just is much more costly to manufacturers. So, employee retention is a very, very important thing for manufacturers today. Do you have to have Google's reputation to do it? Absolutely not. I have a saying when we talk about retention is, "Are we giving our employees a seat at the break table?" And that sounds like a funny saying, but a lot of times, our retention issues happen in the first few weeks or months of employment. And so, one of the things that I really urge manufacturers to do is be able to create an environment where the employees feel like they belong and are part of the team very, very quickly.
Amanda: That's really interesting. I didn't realize that people can fall out so quickly that you really have to catch them as soon as they're in there in order to keep them, that's fascinating. And it sounds like it's really tied to your culture, and having a culture that makes everybody feel like a part of the team, and they're making a difference.
Joe: Right. So, the way I like to say it, and the reason I use this comment, are we giving them a seat at the break table, is oftentimes when employees come in, they go through a training process, and then they're released to the line. And some companies do this in a very short period of time, other companies a little longer, but usually within the first week, they're particularly are manufacturing employees that are out on the shop floor are introduced to the line very quickly. And the question is, what happens at the first break time? And so, I like to say I will give them a seat at the break table because the reality is, oftentimes, everybody disperses for break and the new employee doesn't, they're lost, they're not sure where to go. Or if they do know where to go, they don't feel like they are welcome at a given break table.
I use an example, it's kind of like when we went to high school and our first day as a freshman in high school, at least that was my experience, you know, go in and you're looking around to see where to sit. And upperclassmen are obviously...you know, if they see you walking towards their table, they're kind of shaking their heads, "No, no, no, freshman, don't sit here," that kind of idea.
And so, I like to encourage employers to assign a buddy, if you will, assign somebody that is willing to say to the new employee, "Hey, we're getting ready to go to break, do you want to come with us?" And in essence, give him a seat at the break table. Give them an opportunity to sit down with them, get to know them, talk about interests, etc.
And so, if we get our culture such that we are doing that, then the retention numbers increase significantly in that first 30 to 60 days. It is usually...most of the data shows that it's that first 30 to 60 days where we have quite a bit of turnover still in our manufacturing environment. And oftentimes, I believe it's because the employees just don't feel like they belong as quickly as we really need them to.
Amanda: Right. And I'm curious, it's interesting the way retention and culture kind of tie in together so strongly. And I don't think it's controversial to say the attitudes towards culture and what culture is within a company have really changed a lot, especially generationally. I've talked to some people on the podcast about what baby boomers expected from their culture compared to what millennials are more or less demanding. How would you say in that essence, employee retention strategies have changed over the years? Has it always been such a point of contention where it's a concern the way it is now, or are employers looking at this differently than they did in the past? Are they paying more attention to retention? Or has this just been an ongoing issue that will always be an issue?
Joe: I think certainly given the market where it is today, employers are paying a lot more attention to how do we retain employees? And one of the things they're struggling with as well as retention or tied into retention is this idea of attendance. And one of the things that I see employers, particularly manufacturers struggling with, and we talk about frequently is this idea that...take the millennial group as an example. I admire the millennial group, they are a very hard-working group. Take the boomer generation, not all boomers perceive that. And I get a lot of interesting feedback when I say they're a hard-working group. They are a hard-working group, but what we found is that they don't like to be told when to work. And of course, in manufacturing, that is a very hard situation to deal with. In essence, let's say, for example, our first shift starts at 6 a.m. You know, we need all our own employees there at 6 a.m. And, of course, we have a situation, and we're seeing more of this, where employees don't come in when they're scheduled to come in.
And so, what are some employers doing to offset that? I read a situation a year-and-a-half, two years ago, a company was advertising, and basically the way the advertisement read is, "You can become a temporary employee and choose the hours that you work." And they had developed an app on the phone in which case they were basically putting out how many people...with the interpretation of the ad, how I interpreted it, is they would put out on this app how many employees they needed on a given shift. And then it was almost...I kind of thought of the idea of Uber for temporary services. In other words, they would put out, "We need this many people for the shift," and employees could log into the app and say, "You know what, I'll be there at such and such a time." And they were allowing the employee to dictate how many hours they were going to work in a given week. And if the employee didn't want to work any hours, then they didn't have to.
It was very intriguing to me, is very much like what we call the gig economy, right? You know, if I do this gig if I want it, but then if I don't, if I have something else in my life going on, then I don't choose to do that gig. And so, to me, that was a very progressive, forward-looking company that is trying to deal with the fact that the millennials or the younger group will work very hard, they are hard-working, it's just they are very...they do not like to be told when. And that's the issue that a lot of manufacturers are struggling with right now.
Amanda: Yeah, I think that's interesting that you say that. I'm a millennial, and the last two jobs I've had have been, you know, work your way, get it done. We don't care when you're working as long as it gets done. And I think that's something that I've...you know, I mean, I sit at a computer as a journalist, but it's something I've always enjoyed about it is that yeah, I can help out with my family or, you know, run errands if I need to during the day or whatever. And I'll work until 8:00 at night, I'm okay with that, I did other things during the day. And it's interesting because yeah, like my parents all the time are questioning how I actually get work done.
Joe: Yeah, and that is exactly what's happening in manufacturing. And of course, manufacturing, it's much more difficult than a role like you play where there is flexibility as long as you get done what needs to be done, then great, that's fantastic. But when we need 15 people on a given work cell, and we only have 7 of the 15 show up, that causes that work cell a lot of issues.
Amanda: Yeah. And the app is such an interesting approach to it, especially because obviously that generation, we're so keen on apps and, we can sign ourselves up and come in when we want to come in. I think that's such an interesting way to do it. And I'm curious how that turned out for that company. I'd be curious to find out if they had any kind of case studies or anything on how that worked out if it was successful.
Joe: Unfortunately, for that particular company, I don't have the answer to that question. I tried to get some contact information through their HR, but my understanding is that's local to me, but it came out of their corporate office, which is not. So unfortunately, I can't answer that question for them. What I can suggest and tell you that's going on, another thing that I think is key to retaining millennials and now Gen Z are coming on the workforce as well, the research that I reference when I'm talking about the different generations is from the Pew Research. And last year, they finally made a cutoff and said that the millennial generation based on, or how they divided the cohorts was from 1981 to 1996, anybody born in that era. And so '97 and on is now, according to Pew Research, considered Gen Z, and so that would be your 22, 21, you know, they're coming into the workforce as well.
And one of the things that I see manufacturers also struggling with significantly is this idea of allowing them to have their phones on them at all times. One of the things I encourage manufacturers as I go around and train and do consulting is, you're going to have to figure out how to allow them to have their phones on because if you try and restrict that, that is going to become an issue with regard to recruitment and retention. If they cannot use their phone at your location because you do not allow it on the floor, and they can find an employer that will allow them to have their cell phones all the time, they'll move to that other employer. And so, again, manufacturers are struggling with this a bit.
What I am finding is I am finding now that employers are changing their attitudes about this slowly, in part because they're just, quite candidly, losing the battle. They keep trying to keep eye on employees and tell them, "Look, you cannot use your phone, you cannot use your phone." And what's happened, interestingly enough, is that the bathroom breaks are going up in length significantly. So, they're basically figuring out a way to get on their phone anyway. Now, I interact with safety professionals as well who really push back with me on this, "It's a safety issue. It's a safety issue." I'm not saying that it's not, I'm saying that if we don't figure out how to adjust or adapt, they will figure it out for us. And oftentimes, they'll do that by leaving to go someplace else.
So, I do see companies actually starting to adapt in this way. And I think that's a good step. I encourage people to develop apps that are tied directly to their work performance. In other words, if you're concerned about them keeping an eye on a piece of equipment for quality purposes, develop an app that allows them to enter quality data on their phone, that you can then download into the system. Now, there are cybersecurity issues. There are other issues that center around that, that we have to deal with. I'm not saying that doing that is easy, but what I am saying is, if you want to truly engage these employees, you're going to need to do stuff like that. And so, we are seeing some of that happening.
Amanda: Right, right. And that's interesting trying to figure out, that is a very fine line, and you need to have people. So, if this is what we need to do to have people, you got to find those workarounds, right?
Joe: An example just of not only in retention but also in recruiting, I was at a forum, this had been three years ago now, but I was at a forum where there was an interesting conversation between a senior level HR person from a company in Northern Indiana that was frustrated because another HR person from a different company in Indiana was there talking about the fact that as they were talking to employees, potential employees at job fairs, they were emailing them back, the ones that they like, they would email them, and they were not getting any responses. And this gal that was telling this story, she said that one of her kids actually said, "Mom, we don't look at email, email is nothing but junk. If you want them to call you back or to come in, you got to text them.” And so, this company started using texting as the primary mode of communication, and they were getting all sorts of responses.
And this senior HR person got up and was actually visibly upset. I mean, I was watching the dynamic. This person was visibly upset and said, "Look, you need to teach these people they have to use email, that's just part of business." And I found that intriguing because it's this, who adapts to who mentality. And the reality is, if we want to create a culture that is going to survive and continue to retain good, talented employees, we have to learn to adapt to each other's particularness if you will. And so, to me, that individual was missing the point of the conversation this lady was having is if email doesn't work, start using texting because that is the method that worked for them. And the reality is, that's what millennials predominantly use.
Interestingly enough, now, I'm finding based on some preliminary research that Gen Z is actually not even preferring texting, they would prefer things like Snapchat and Instagram as the primary mode of communication. So, I do see evolution there as well. And if we are willing to adapt our communication processes, as we actually have over the years...When I first started in business, we used the phone, that's what we used because that's what was available, there wasn't email available, I mean, it didn't exist. And so, once email became a dominant mode of communication, we started embracing that. And so, now texting, in my mind, is a dominant mode of communication, we should be embracing that. And pretty soon we'll have apps like Instagram and Snapchat, and we'll need to embrace those as well. So, adapt as we go, that is what I'm trying to coach manufacturers to do.
Amanda: Right. Meet people where they are, in essence, right?
Joe: Yes, exactly.
Amanda: When you meet with a manufacturer, what are the key points for improving their retention that you usually suggest? What are your maybe top three or five retention strategies that you push to people that are looking for your help?
Joe: Based on the research, what I typically suggest that they do, first of all, is participative style of leadership as opposed to autocratic or authoritarian style of leadership. Most of the programs that I teach involve participative style of leadership. People want to be part of the decision-making process, and that includes all the different generations, not just one or two generations. The older generations were basically taught, keep your mouth shut. If your boss doesn't come talk to you, it means you're doing a good job. That's not successful. And quite candidly, I've been teaching and practicing participative style of leadership for 35 years now. It's a much better form of leadership.
Now, another thing that we encourage people to do is create an environment...So again, it goes to culture, you mentioned it before. How do we create a culture of inclusivity? How do we create a culture that allows people to give input and their input to be heard? And I think that's all part of participative style of leadership. Another thing I'm suggesting to employees, particularly for incoming and retaining newer employees, again, that 30 to 60 days, goes back to what I said at the beginning, which is how do we make them feel like they're welcome? How do we get them and make them feel like they're part of the team very, very quickly?
People often come to an employer for the money. That's what they'll tell you. "Oh, I came because I needed a job." That's true. But the reality is, that's not why they stay. Some people argue that, but the reality is they stay because of one, typically, of four reasons. They stay because they like the team members. They like what the team does. They like being associated with that particular company. And the activities that they are allowed to be involved in.
Another thing we know about millennials, and this is another thing I'm encouraging employers to do, is you've got to move them much more quickly than generations of the past. You've got to give them additional things to do because they can assimilate information very, very quickly. And they are ready to move to the next thing, they're ready to do something new much quicker than generations before them. And so, if we don't keep them engaged, if we don't hurry up and give them some additional things to do and responsibilities, then they tend to leave. So that's another thing I encourage. And then as I said before, how do we allow them to engage in methods that they want to engage, which is centered around this phone? This phone tends to be a big issue, as I said, with manufacturers. Apps or electronics or certain things that we can really capitalize on their strengths, because they know that stuff well. And so that's another thing I encourage them to do.
Amanda: Awesome. Well, you've mentioned a few examples, but I was wondering if you could share...if there's any other examples that you really like to share of good strategies for retention that others can take inspiration from?
Joe: I would say one other thing that I am seeing is the question of making sure that the roles and expectations are laid out clearly in the beginning. Another thing that I see happen is the roles and expectations of those roles don't always match. Oftentimes, we bring people in and when we do, we talked to them a lot about the good things of the company, the good things of our team, and what all the job entails, but we don't often talk about expectations of, expect that it's going to be hot in a given area of the plant in the summertime, or expect it's going to be a little chillier in the wintertime in certain areas.
And so, I am getting some feedback that another part of retention issue is employees are coming in and they perceive that the job is going to be one thing, but when they start doing it, it's actually something else. And so getting a little better at making sure that we not only communicate all the good things about our company, and the role that the person is going to be playing within our company, but also helping them understand that there are some things that they need to expect that aren't going to be as pleasant, and here's what they are, and let's talk about that upfront as opposed to getting them in, getting them processed, getting them out there, and then them self-selecting for turning over very quickly because the job isn't what they expected it to be. So clearly understanding roles and expectations, I think.
Amanda: Great. Well, those were some great insights. Was there anything else that you wanted to add or you think our listeners should know before we close out today's podcast?
Joe: No, I just thank you very much for the opportunity, Amanda, to come on your show, and I really appreciate it.
Amanda: Great. Well, thanks again for joining me today, Joe. I think, hopefully, our listeners take a lot of good advice out of that, and they can implement some of these strategies that you've discussed. For "Manufacturing Tomorrow's Workforce," this is Amanda Del Buono.
Don't forget to like and subscribe to the podcast on Apple Podcasts, Google Play, or any of your favorite podcasting apps. Until next time, stay safe.
For more, tune in to the Manufacturing Tomorrow’s Workforce podcast.
