Traditionally, manufacturing has been a punch-in, punch-out environment. You’re expected to come in, do your work, and go home. But EmployeBridge’s recent Voice of the Blue-Collar Worker survey shows that things are changing. Like most other industries, workers want their employers to listen to their needs and start making changes.
Employees want to be known, valued, and acknowledged by employers. It’s a paradigm shift, from seeing workers as commodities — bodies to come in and do the physical work — to seeing them as partners in your company’s success.
We’re seeing this as a common theme across all industries — but because of the workplace culture in most manufacturing companies, employers in this industry have been slower to adapt.
As a result, manufacturing companies are finding it harder than ever to stay fully staffed. These mounting staffing challenges are biting into manufacturers’ bottom lines from multiple directions — including productivity losses (37%), overtime pay (34%), employee burnout (28%), employee turnover (27%), and recruiting (23%). The mounting staffing challenges have serious implications for overtime, absenteeism and turnover, production rates, and profitability.
Let’s take a look at EmployeeBridge’s recent survey results and what it might mean for manufacturing employers.
The Voice of the Blue-Collar Worker
EmployeeBridge surveyed nearly 16,000 employees in the manufacturing industry to learn about the preferences and motivations of frontline hourly workers. What they discovered was insightful. Here are a few highlights.
The top three reasons manufacturing employees stayed at a company were a good work schedule (22%), positive company culture (15%), and consistent increase in pay (13%).
Schedule tops culture for the first time, most likely because of the concerns and issues brought on by COVID. While other industries have been able to work from home and have more flexibility during the last two years, manufacturing employees have to be in the factory. Workers don’t have the option to be with kids while they’re at home attending virtual school.
Perhaps not surprisingly, the top two reasons for leaving a job are COVID related (20%) and finding another job that paid more (11%). Inflexible employers that did too little too late in response to COVID found their workforce moving on.
Better pay may not be a new reason for leaving a job, but it isn’t as bleak as many HR personnel think. While the common assumption is that an hourly factory worker will switch jobs for as little as a fifty-cent raise, EmployeeBridge’s survey found that the pay difference is closer to $2.00 to $3.00.
That means by improving work scheduling and company culture — and implementing creative pay incentives — it’s possible to increase your employee retention rate at your company.
How to Retain Your Top Talent
For the first time ever, scheduling became the first priority among manufacturing employees, bumping out culture from its usual top spot. Workers are demanding flexible schedules and the ability to swap schedules when needed. And they’re willing to leave their jobs over it.
Some options that creative manufacturers have implemented include shift swapping, and adding part-time or flex positions.
A positive work culture is more than friendly managers and company picnics. In EmployeeBridge’s survey, workers said they want to be part of a company that:
- Provides opportunities to learn more and earn more
- Values them as a person, not as a number
- Is flexible and family friendly
Consider ways to improve your company in the following areas:
- Pay and benefits. Are your wages competitive? Some companies offer an instant pay option, which is gaining popularity among workers.
- Hiring and onboarding. Assign mentors to new employees, to improve morale as well as production quality.
- Health and safety. Review your COVID policies and ask employees for their input on protocols. Make sure the environment itself is clean, well-lit, and maintained well. Communicate (and enforce) proper safety procedures. Also encourage employees to take their breaks and to use PTO. Minimize mandatory overtime.
- Performance and career. Provide opportunities for professional development, upskilling, and upward mobility. Give managers the tools to support their people and help them succeed. Foster a team environment.
Incentive pay not only boosts employee retention, but performance and productivity as well. Piece rate pay is a common incentive in manufacturing, because it encourages faster production. But you want your employees to be more than just fast — you want to maintain quality as well.
To get both speed and quality, and teamwork, offer different types of incentives. For example:
- Team- or experience-based incentive rates
- Gain sharing
- Group incentives
- Step pay
These incentive-based compensation systems reward harder-to-observe skills (such as teamwork), and they can help increase profitability as well as employee satisfaction.
Unfortunately, most HCM systems aren’t designed for the complexities that come with multiple incentive rates, such as:
- Defined rate changes based on multiple variables
- Team-based incentives
- Effective dated rates based on multiple variables into the future
However, IDI provides a way for manufacturers to offer multiple pay structures. Our integration software can connect with production systems and ERPs at the core and produce a punch link, which collects production information from your production system and gets it into your time-and-attendance system. We also automate wage comparisons and other important payroll calculations that your existing systems aren’t equipped to handle.
Retaining Talent Starts with Trust
While the current labor shortage is a serious problem for manufacturers, addressing your blue-collar employees’ biggest concerns and issues will help your company to retain your best talent and improve productivity.
Perhaps the most important change you can make is to show a willingness to listen to your employees and take their priorities seriously. Work hard to establish trust and show that you value your people as partners in success, and you’ll build a loyalty that lasts.
IDI has been in the manufacturing industry for decades. With 30 years and more than 30,000 satisfied customers, we’ve learned to meet the changing needs of manufacturing companies, so they can stay on top of the latest demands on their businesses — whether it’s business as normal or business in a new normal.