Boosting Employee Retention in Industrial and Manufacturing Organizations

Employee turnover has been on the rise in industrial and manufacturing organizations. Since the beginning of 2014, the rate of employee turnover in the manufacturing sector has slowly increased; it was close to 16.1% in 2021. Even though the manufacturing industry managed to refill 63% of the job roles vacated during the COVID-19 pandemic, the remaining 37% had not been added back until the end of 2020.

Research shows that finding the right talent in the manufacturing industry is now more challenging than ever. 77% of manufacturing organizations are facing difficulties in hiring new employees and retaining the existing ones. Therefore, retaining existing employees should be a top priority for industrial and manufacturing organizations right now.

The Impact of Employee Turnover in the Industrial and Manufacturing Sectors

Losing experienced and skilled workers is one of the major costs in the industrial and manufacturing sectors. When an industrial or manufacturing employee quits, the organization not only loses employee output but also their knowledge and skills. Based on estimates, the financial impact of employee turnover in the industrial and manufacturing sectors can add up to millions of dollars. Training employees in these sectors typically costs approximately $4500 per employee per year.

The future of these sectors will depend on how effectively they manage to retain employees. Research suggests that the current turnover rate of industrial and manufacturing employees older than 24 years is almost 66%, followed by employees between 25 to 30 years at 31%.

For years, industrial and manufacturing organizations in the US have faced a shortage of skilled labor. It is also estimated that by the end of 2028, 2.5 million jobs in the manufacturing sector will go unfilled.

Why Industrial and Manufacturing Employees Leave

Industrial and manufacturing employees are no longer satisfied with great pay, flexible working hours and perks. They are also looking for:

  • Emotional wellbeing
  • Workplace safety
  • Employee recognition
  • Good working conditions
  • Good work culture
  • Supportive leaders and peers

This means industrial and manufacturing organizations need to also focus on the above areas to reduce employee turnover and boost retention.

Boosting Employee Retention in Industrial and Manufacturing Organizations

Here are some approaches industrial and manufacturing organizations can adopt to tackle employee turnover and improve employee retention.

Build a Safe Work Environment

One of the most basic needs of industrial and manufacturing employees is a safe work environment. Employees focused on keeping themselves safe will be highly unhappy if asked to work in an unsafe environment. They’ll look for safer alternatives.

However, maintaining safe working conditions implies managing different aspects of the workplace that require regular upkeep. Here’s how you can make your industrial or manufacturing organization a safe workplace for employees:

  • Automate Safety Systems: To minimize the maintenance efforts and time, consider automating safety procedures in the organization; algorithms and software are less prone to mistakes than manual efforts.
  • Make It Convenient to Report Safety Issues: Even after automating safety systems, employees may encounter broken machines and faulty processes. Therefore, consider building an easy-to-use and intuitive dashboard where they can report issues conveniently and quickly.
Practice Employee Recognition

Employee recognition can help a great deal in boosting employee recognition in industrial and manufacturing organizations. It allows leaders and peers to recognize each other’s efforts. This helps in building a spirit of teamwork and camaraderie among peers. Not only this but employees feel appreciated and encouraged to perform even better.

Research shows that more than 91% of HR professionals believe that recognition and reward make employees more likely to stay. Another study emphasizes that employees who have been recognized are 63% more likely to stay in their current job within the next three to six months.

Work on Strengthening Peer-to-Peer Relationships

Employees need to be surrounded by individuals committed to their success to excel in their workplace and this is where the need to strengthen peer-to-peer bonds comes into the picture.

Apart from better employee retention, other benefits of solid peer-to-peer relationships include:

  • Better communication
  • Greater employee engagement
  • Reduced absenteeism
  • Greater productivity
  • Improved emotional wellbeing
  • Better innovation
  • More trust
  • Enhanced collaboration
  • Improved motivation

The best ways to strengthen peer-to-peer relationships are to organize regular peer-to-peer recognition events and mentor-mentee programs. We’ve already discussed recognition events in the previous point. For mentor-mentee programs, organizations should identify senior employees with greater experience and ask them to partner with less experienced/junior team members.

Conduct Exit Interviews

Exit interviews provide employees with a platform to honestly discuss why they are leaving. Organizations can gather insights from these interviews to improve employee retention and minimize employee turnover. Interview findings can include a variety of actionable recommendations and suggestions, such as:

  • More time off
  • Better equipment
  • Safer work conditions
  • Process improvements

By asking the right questions, you can identify the root causes of increased employee turnover and build strategies to boost retention.