Why Your Manufacturing Company is Experiencing High Turnover (And How to Fix It)

If you’re an employer who’s dealing with today’s unprecedented hiring challenges, then you’re likely also dealing with employee retention. It’s a matter of fact that manufacturing companies across the country continue to face labor shortages, increased competition for skilled workers, and rising turnover rates. But it doesn’t have to be this way. Understanding why employees leave is the first step toward creating a more stable, engaged workforce. 

At DeLong Staffing Specialists we’re always interacting with employers who are trying to keep a full staff, in the face of high turnover. We know what you’re dealing with and have some insights into the reasons behind the trend along with actionable suggestions to keep your business thriving. 

What Is Turnover?

People come and go, that’s just a fact of any workplace. Some need to relocate for personal reasons, or their life circumstances may change. People also decide to retire, and there’s a whole host of other motivations for leaving a given workplace behind. But that’s not what we’re talking about here. 

High turnover is about a constant churn of workers that need to be screened, interviewed, hired, trained, onboarded, and integrated into a team only for them to move on down the road. The exact numbers and percentages will vary depending on industry, but in general, high turnover means that employees are leaving an organization faster than they can be replaced–annual turnover rates above 20% is considered high. Many experts position manufacturers right in that danger zone.

Unsure if you’re dealing with a problematic level of turnover? Check these clear signs:

• Constant hiring
• Increasing overtime
• Rising absenteeism
• Declining employee engagement
• Difficulty filling skilled positions
• Employees leaving within the first 90 days
• Production delays caused by staffing shortages

The True Cost of High Turnover

Beyond the literal cost to hire, train, and onboard a manufacturing employee, there’s a host of intangible expenses that go into maintaining workers. So when they are leaving at higher rates than is typical, this can have a negative impact on business, but also on the workers that stick around.

For instance, oftentimes, employee turnover can lead to a glut of work with less people to do it. As you continue to invest in recruiting costs, the worker shortage results in lost productivity. As schedules and deadlines are fixed and clients expect what was promised, existing staff may find themselves required to take on greater responsibilities or more overtime. This can lead right into lower employee morale, safety concerns, reduced quality, and even missed production deadlines. Needing to replace even one experienced employee can have a negative ripple effect throughout an operation. Clearly, high turnover rates are about much more than just higher recruiting or training expenses.

Why Turnover Rates Are High And What To Do About It

Replacing employees is expensive, often leading to lost productivity, increased overtime, training costs, and disruptions to production schedules. The key to slowing down this worrying trend is to understand why it’s happening and what you can do to put the brakes on. Then, of course, you need to implement those techniques. Here’s what we have to share.

Limited Opportunities for Career Growth

If employees are ambitious and are aiming for bigger and better things in their futures, then a position that only takes them so far will eventually run its course, and they’ll become part of the turnover statistics. 

Signs this may be an issue include:

• Few promotion opportunities
• Lack of cross-training
• No leadership development
• Employees feeling "stuck"

On the other hand, employees are more likely to stay when they see a future with your company. So take time to create clear, in-house career paths along with offering skills training and certifications. Discuss career goals during performance reviews along with actionable tips that workers can implement to reach their goals. And when it comes time to fill an open position, promote from within whenever possible. 

Poor Leadership and Communication

The employees that leave your organization may like their job. The issue may rest with management. This is, unfortunately, a common issue that companies contend with. 

Some recurrent management-related issues include:

• Lack of feedback
• Inconsistent expectations
• Poor communication
• Workers feeling undervalued
• Limited recognition

Employees who don’t feel seen, heard or valued will eventually go elsewhere. How to prevent this from happening? Train supervisors in leadership and communication. Make it part of their work to hold regular, one-on-one meetings with employees. Recognize employee achievements genuinely and openly. And last but never least, encourage and reward open communication and honest feedback.

Burnout From Overtime and Staffing Shortages

Manufacturing schedules can get wild, we know. Clients want their products when they want them, regardless of your staffing situation. This kind of demand often requires overtime, but excessive workloads can quickly lead to fatigue and frustration.

Keep an eye out for these telling warning signs that lead to turnover:

• Frequent mandatory overtime
• Increased absenteeism
• Declining morale
• Safety incidents
• Employee exhaustion

The first step to handling client demand without overworking your employees is to learn to anticipate the need. Take time to review staffing levels and see if they’re on par with demand. If not, then it’s time to improve workforce planning. This could mean cross-training employees so that they can wear multiple hats in your company, but more often than not, if you truly want to encourage a healthy work-life balance and build a culture that your employees value, it’s a better idea to use job placement agencies to temporarily meet staffing needs during peak production periods.

Inadequate Onboarding and Training

It’s a fact of life: employees who don't feel prepared to succeed in their work are more likely to leave. A lack of onboarding and training can cause a worker to feel undervalued and unprepared–not a good way to start out a new position. 

If this describes your onboarding process, it’s time to change things up:

• Lack of clear objectives
• Process that moves too quickly
• Inadequate new hire training
• Lack of follow up, support, or performance measurement

It takes a clear plan to make the onboarding process work for everyone involved. Rushing new hires through without them truly understanding what they’re doing is undermining their confidence in themselves and your company, and ultimately, setting them up for failure. On the other hand, strong onboarding includes relevant safety training, comprehensive equipment instruction, clear company expectations, meaningful mentorship, and regular check-ins during the first few months. A structured onboarding process helps employees to gain confidence more quickly and keeps them in your ranks.

Lack of Recognition

It’s pretty simple–most employees want to know that their work matters. They may spend more time with their managers and workmates than they do with their loved ones, so if they feel that this work is only a means to an end, it may not be enough to keep them on your payroll. 

If these habits are a regular part of workplace interactions, things need to change:

• Frequent unfair negative feedback
• Insufficient feedback or recognition
• Unfair, biased, opaque, or inequitable distribution of recognition 
• Not recognising workers' specific skills, contributions, and accomplishments

When workers feel that their work matters, they are more likely to give it their all. Ways to recognize and reward workers can include features like employee appreciation programs, performance awards, public recognition, milestone celebrations, and genuine, positive feedback from supervisors. Remember that recognition doesn't always require financial incentives. Taking time to help workers feel appreciated can directly contribute to higher job satisfaction rates and lower turnover.

Workplace Safety Concerns

Manufacturing employees expect a safe work environment, and rightly so–they’re often dealing with complex and potentially dangerous equipment and environments. If corresponding safety practices aren’t in place, this could lead to employees feeling unsafe, stressed, and even to preventable injuries. Absenteeism and turnover are natural byproducts. 

If your organization is reflected in the the following, it’s time to reassess:

• Disregarded near-misses and injuries
• Lack of training and protocols
• Defective, broken, or outdated equipment
• Inadequate PPE and missing signage (hazard warnings, evacuation routes, safety compliance)

Conversely, when employees are able to work in an environment that is safe, they feel more valued and capable. Focus on establishing a consistent maintenance program, provide ongoing safety training and encourage reporting of hazards. Foster a safety-first culture that has a goal of learning from mistakes and near-misses and always doing better.

Compensation and Benefits May Not Be Competitive

More often than not, unless compensation is very low, workers would rather stay in a fulfilling job with a team they love than move on in search of higher pay. That said, this is sometimes the reason that people leave an organization. Pay isn't always the primary reason employees leave, but remains an important factor. If you can’t understand why turnover rates are high, this is an area to review. 

If these descriptors match your company’s approach to compensation, it’s time to rethink things:

• Pay is below market value
• Raises are non-competitive and do not cover cost-of-living or inflation
• Benefits are lacking compared to peers in similar fields
• Increased workload with no pay bump

Take a close look at base wages and benefits like shift differentials, health insurance, retirement plans, paid time off and more. Do you offer tuition reimbursement for employees who want to advance their careers? What about performance bonuses for exceptional work? Making sure that you’re benchmarking compensation against local competitors can help to identify gaps. And if you truly cannot make more room in the budget, working with a staffing agency can take some of the pressure off and shift that burden the next time you need to fill an open position.

Company Culture Needs Improvement

A positive workplace culture helps employees feel connected to the organization. And when employees feel connected, they’re less likely to consider leaving. But the opposite is true as well. A negative or downright hostile work environment will always lead to higher turnover rates. 

If you see your company in this list, self-evaluation is in order:

• Failing to invest in people after hiring
• Failing to consistently address misconduct
• Lack of diversity and inclusion
• Poor behavior from leaders
• Putting too much pressure on workers
• Unclear ethics standards

On the other hand, healthy workplace cultures focus efforts on investing in staff and making them feel seen and respected. Leadership is respectful and accountable, teamwork is prioritized, open communication is valued and encouraged, and employees know that there are always opportunities for input. It’s a simple fact that employees who feel valued are generally more engaged and more likely to stick around.

How Staffing Agencies In Cleveland Can Help Reduce Turnover

Oftentimes, companies may want to change policies and implement a better hiring protocol, but they’re already at capacity. It’s a challenge just to keep things running day in and out, let alone meet clients’ ever-changing needs, deadlines, and expectations. When you find yourself in this situation but still need to hire the right people, it could be time to turn to a staffing agency.

Manufacturing staffing agencies in Cleveland–like the team at DeLong Staffing Specialists–can help you to support retention in a number of ways. An employment agency only spends time recruiting qualified candidates for corresponding positions. All the screening, vetting, and legal paperwork is done without any trouble to you, the employer. This offloading of work and responsibility to a staffing agency greatly improves hiring speed. Recruiters are careful to match candidates to company culture, ensuring a better fit from day one. Providing temporary staffing during busy seasons can greatly reduce hiring pressure on internal teams and free up existing workers to focus more fully on their work without the fear of needing to take on additional tasks.

If a position is permanent, then direct-hire placement or temp-to-hire workers may be the best fit–both can end up filling these positions long-term for your business. On the other hand, if you have busy seasons that require additional workers for a limited timeframe, contract employment may be a better option. Whichever type of employee is best suited to your current or future needs, you can rest assured that an employment agency like DeLong Staffing Specialists will be able to help you find candidates who are right for the job and who can contribute to lower turnover. 

DeLong Staffing Specialists–Your Cleveland Employment Agency

It’s hard to find good employees, but when you work with experienced, professional recruiters, it’s an outcome you can count on. Try as you may to build a long-term retention strategy, you may need some assistance to get the ball rolling. Once you’ve worked hard to institute competitive compensation, career advancement opportunities, strong leadership, safe working conditions and you’re regularly recognizing employees and fostering open communication, you have the perfect environment to nurture a workforce that will stick with you for years to come.

High turnover can negatively impact every aspect of a manufacturing operation, but when you understand why employees leave and invest in making things better, you can build a stronger, more engaged workforce that supports everyone’s long-term success. That said, retention is more of an ongoing strategy than a one-time initiative. Get a jumpstart on the process and on finding the right people for your organization–start working with an employment agency like DeLong Staffing Specialists. Contact us to get growing.