Contract Workforce Strategic Advice

Finding, training, and retaining employees is probably the hottest topic among manufacturers and distributors in South Carolina. At most OpExChange plant visits this year, this is raised as the most crucial problem manufacturers are facing. Many companies are turning to workforce solution providers to help in various capacities – providing a contingent workforce to supplement full-time employees, supplying, and managing both people and processes, and even outsourcing the recruitment process itself.

The OpExChange virtual event in November was presented by MAU Workforce Solutions. MAU has been an OpExChange member for nearly thirteen years. In the past decade, they have utilized the SCMEP in honing and perfecting their lean manufacturing skill set. They not only applied this in their own processes but also at their client sites. The last two OpExChange events hosted by MAU were lean based, including value-stream mapping and leading rapid improvement events.

Because of MAU’s expertise as a workforce solutions provider, they were asked to share some best practices in selecting and working with a contingent workforce provider.

Not surprisingly, their suggestions followed a pragmatic lean and data-driven approach employing the Plan, Do, Check, Act model. Tradd Rodgers, Senior Director of Outsourcing & Manufacturing Services and Jared Mogan, Director of Recruiting & Staffing Services presented their recommendations for partnership which include initial discovery, collaborate, partnership, and check & adjust.

Note that of the forty-three companies registered for this event, fourteen already have a relationship with MAU.

Initial Discovery
Tradd shared that there are some common “pain points” in the industry that drive manufacturers to explore contract workforce solutions. One that comes up frequently is in-house capacity to onboard and train new employees. Properly recruiting and training employees involves resources and time. This necessity frequently conflicts with the need to find labor hours to produce products to meet customer demand. Both existing and new employees may be required to work additional overtime which can ultimately lead to more turnover. These and several other factors are causing companies to find a contingent workforce partner.

Tradd commented that once this decision is made, the selection process typically moves very rapidly – too rapidly. Expectations are that the bid process occurs immediately and that a transition occurs within thirty days. In reality, preparation requires dedicating time to review data and seek the truth for the current state. Often, the current state model makes its way into the bid and that model may be broken. Tradd provided several recommendations on how to dig deeper to understand the current state so that a future state vision is incorporated into the bid process and expectations.

Also, Tradd said you should expect that your solutions provider has the experience, the tools, and systems to create a clear roadmap to executing the scope of work. Require that your provider shares a plan on “controlling the narrative” that helps employees understand what is happening and why, what happens next, and what does it mean to them. Tradd explained that this is a critical step. If it is not done well, it could result in further loss of workforce.

Tradd heavily recommended to not rush the process when choosing a provider. “The biggest mistakes I’ve made over the last two years is where I have agreed to shorten the timeline. I’ve got some serious knots on my head that won’t go away … and they shouldn’t.”

Optimize

Out-of-Box Solutions – Once a solution provider is selected, there are some key tools to optimize the recruiting process. Documenting and understanding the “hiring funnel” begins. This funnel is the series of steps through which a candidate’s consideration for employment begins, and data should be collected at each stage. The ratio of the number of candidates to one new hire is a primary KPI and must be understood for future planning. Fallout at each stage should be analyzed. At the beginning of this process, the recruiter should become familiar with the job so that they can effectively plan and optimize the interview process at each stage of the funnel.

On-Site Solutions – MAU data shows that for the contingent workforce, 65% of turnover occurs between day five and day thirty of employment. The relationship with the contract employee at the very beginning is super important. Tradd recommends employing some form of rapid employee engagement – something that says, “good job.” This should be a regular part of the operation and occur consistently. He provided an example of an employee recognized for a “quality catch.” Quickly engage and recognize employees for contributions. Use some form of rapid employee recognition to quickly get them engaged in the environment. It is imperative that this occurs consistently and becomes a regular part of the operations.

MAU also uses “Stay Interviews” to gather meaningful intelligence from employees that are not leaving. As opposed to exit interviews which occur when an employee has left, these are geared to find out why employees are choosing to stay and what might cause them to leave.

Collaborate
Jared emphasized that the staffing provider and the client should work on problems and solutions together. MAU has seven guiding principles that encompass their leadership “to-do” list. Two salient points that stand out are the importance of data and the fact that this is an ongoing process.

“Data takes the emotion out of it,” Jared stated. MAU will bring data to the table from the Optimize phase to not only identify the problem but also to indicate potential solutions. He stressed that collaboration does not just occur once a quarter, but it is an ongoing, iterative, multi-conversation process of continual improvement.

Jared shared a sample dashboard of data points that MAU provides their clients. This included results from surveys conducted both nationally and from MAU, statistics from the Bureau of Labor and Statistics, MAU funnel hiring ratio, and data from their “Touch Program.”

The Touch Program collects information from employees at regular points of employment so that proactive steps may be taken to address any concerns that could lead to turnover.

Jared emphasized that, when selecting a provider, ask them up front which data points and sources they will be providing.

Partnership
The relationship between the provider and the customer should be more than that of just a supplier. It should be a partnership where both parties are engaged to implement solutions geared to achieve success. Jared shared examples of successful ideas executed from several of their partnerships that include concepts such as job-sharing, compensation augmentation, recruiting hours, and gas cards.

One of the ideas Jared delved into was wage analysis and alignment. It is important to look at trends and evaluate what is happening in the market, at least on a quarterly basis. By using multiple sources, MAU has been successful in positioning their customer’s jobs based on local wage analysis.

Trad added that understanding the market and compensation is now a foundational part of a contract workforce providers responsibility. This analysis does not always prompt a wage increase. It does mean that you make an informed decision based on data.

Check & Adjust
The relationship between a staffing provider and client melds well with the OpExChange mantra of continuous improvement. In the partnership, both sides are committed to improving the current state to move toward the vision of the next level. Just as in a manufacturing process, results should be monitored to see if desired outcomes are achieved from actions taken. Jared provided an example where a wage increase in one month had the desired iterative increased number of hires for the following two months. Although this was successful, there was also an increase in the turnover rate. This prompted further analysis and adjustment.

The ratio of candidates to a new hire in the hiring funnel is likely the most key parameter to monitor in this check and adjust phase. Is turnover a result of something occurring during the hiring process? This may prompt making changes at the top of the funnel in order to negate turnover in the plant.

Continuous Improvement
The relationship with a contract workforce supplier does not end when the contract is signed. On the contrary, it is an ongoing, iterative process of continuous improvement.

Tradd added that understanding and openly discussing the funnel ratio with the provider is extremely important. Knowledge of those ratios is critical to forecasting whether the targets are achievable. It is also needed to develop the marketing plan in order to fill the demand of the funnel.

About MAU Workforce Solutions
MAU Workforce Solutions has grown over the past 49 years to become one of the nation’s top privately held and minority-owned staffing, recruiting, and outsourcing companies in America. MAU (Management, Analysis, and Utilization Inc.) is a third-generation, family-owned organization that was built upon solid principles and remains dedicated to social responsibility. We have a strong reputation as a trusted partner in managing large projects. Our experience in designing innovative workforce solutions for some of the finest manufacturing organizations in the world sets us apart from our peers. Companies such as General Electric, Robert Bosch LLC, BMW, Michelin, and many others rely on MAU to execute critical processes and provide unique solutions to improve costs, quality, and delivery. We take pride in our ability to meet all commitments made to our clients, regardless of the challenge. MAU does more than fill jobs; we create sustainable, flexible, and agile solutions to keep business moving. https://www.mau.com/

About OpExChange
The OpExChange, sponsored by the South Carolina Manufacturing Extension Partnership, is a peer-to-peer network of manufacturers and distributors in South Carolina known for generating success for members through benchmarking and best practices activities. Member companies host events and share practical examples of industrial automation, lean manufacturing improvements, and leadership development. It is an invaluable resource to South Carolina companies that provides access to others who are on similar improvement journeys. If your company is interested in participating in this collaborative effort to improve both the competitiveness of your operation and South Carolina, contact Mike Demos (Mike@OpExChange.com). More information and upcoming plant visits are available on the OpExChange website www.OpExChange.com.