Labor Shortage – What do we do?
The current workforce labor shortage is pervasive. From recruitment to retention, from basic skills training to leadership development, workforce development has never been more challenging. Potential candidates “ghost” scheduled interviews and new hires do not show up after a lunch break. Long-term employees are leaving and changing career paths completely. How should a South Carolina manufacturer address this problem?
The South Carolina Manufacturing Extension Partnership (SCMEP) created a playbook for manufacturers to help navigate both immediate and long-term needs. This tool delves into the “three R’s” essential to a motivated and engaged workforce – Recruitment, Retention, and Reputation – and covers twenty-one topics to solve potential challenges. The playbook was co-authored by Bill Bliss, president and founder of Bliss Associates, and Dr. Rebecca Battle-Bryant, president of Battle Plan Consulting.
In the January 20, 2022, OpExChange broadcast, Bill Bliss introduced the playbook and background for its genesis to the group. Susan Whitehead, Process Improvement Coach for SCMEP, provided further detail into the “Smart Talent” approach for developing workforce. Representatives from thirty-two manufacturing organizations across the region participated in this session.
The current situation – How bad is it?
- A job-change is on the mind of 50% of U.S. Workers
- Between 3.6 million and 4.5 million employees resigned each month between March and September of last year. This trend is continuing
- A record-setting 75% of employees are disengaged
- It takes more than a 20% salary increase to lure an engaged employee away from his/her current company
- It takes next to nothing (or even less pay) to lure a disengaged employee away
- A toxic corporate structure is 10.4 times more powerful in predicting attrition rate than compensation
During the session, Bill provided a quote from legendary management consultant, Patrick Lencioni:
“Culture eats strategy for breakfast.”
This drives home the point that creating and sustaining an engaging culture in your company is paramount to a successful organization – even more so than a strategic plan.
In their research and development of the playbook last year, Bill and Rebecca interviewed plant managers and human resource professionals from manufacturing facilities across South Carolina. Industry experts from both SCMEP and the South Carolina Department of Commerce were included in this research. They discovered that although the workforce dilemma is prevalent in many companies, some were not as deeply impacted. In fact, some had no retention problem at all. A common denominator became apparent at these successful locations – each had strong and sustained employee development and engagement programs.
SCMEP recognizes that workforce development is critical for South Carolina manufacturers. Bill emphasized that there is not one single solution for the current workforce crisis. For a company to be successful, they must revisit current strategies used in recruitment, retention, and reputation while in tandem entertaining new and innovative ideas and solutions. The twenty-one sections of this playbook are excellent resources in guiding a company through multiple facets of workforce development. Each topic provides the same basic outline – current situation, potential solutions (immediate and long-term), and available resources.
SCMEP released the playbook at the South Carolina Manufacturing Conference and Expo in November of 2021. It is available at no cost on SCMEP’s website found here: https://scmep.org/programs/playbook/
Susan Whitehead holds an extensive background in manufacturing, quality, and teamwork development in South Carolina. In her last sixteen years with SCMEP, she has helped numerous SC companies as a process improvement coach. In this session, Susan offered the concept of “Smart Talent” which SCMEP is using to help organizations develop their workforce. This program was initially developed by the Oregon MEP and generated tremendous success for manufacturers in improving retention, engagement, quality, and bottom-line profitability.
Susan pointed out that a Smart Talent program addresses the specific strategic and operational workforce challenges Bill outlined earlier and reminded the group that in manufacturing operations, if we do not control the process, we will not have a predictable outcome. The same is true with regards to leadership. A systematic approach to leadership must exist to have a predicable outcome for workforce engagement.
SCMEP now offers a suite of four leadership courses through DDI that develops leaders and establishes the baseline for an engaged culture in your organizations. OpExChange members have an opportunity to participate in the first module of this class, “Communication: Connect through Conversation” on March 16, 2022.
Susan shared that the average cost to hire a new employee is $4,129 and the cost of a bad hire is typically twice that of their annual salary! Of the employees that resign, 79% site “lack of appreciation” as their reason for leaving. She reiterated that it is critically important (and cost justified) to invest in employee development.
Susan also provided access to a simple turnover calculator which provides quick calculations of what turnover is costing your site and can help identify justification for the action. This tool was made available to all OpExChange members.
The Three R’s – Everyone’s Responsibility
Workforce development has always been one of the most important fundamentals to achieving operational excellence in an organization. This need is magnified by the current labor crisis. Bill and Susan’s input, and the ensuing discussion, highlight the fact that the recruitment, reputation, and retention is a responsibility shared throughout the organization.
Employee churn is a significant cost that directly impacts the bottom line.
There was lively discussion and collaboration during the event and a full recording is on the portal. Bill, Susan, and SCMEP also provided additional information and resources which are noted below.
Although there is not one single solution to the crisis, the “Workforce Development Playbook” offers some great guidance on how to get started.
Contact your SCMEP Regional Vice President if you would like to explore solutions in your organization: https://scmep.org/contact/contactform/.
About the OpExChange
The OpExChange, sponsored by the SCMEP, is a peer-to-peer network of companies 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 you are interested in joining, contact Mike Demos (Mike@OpExChange.com) or visit the OpExChange website to see current companies: https://www.scmep-online.org/pages/memberlisting