9 Ideas for Employee Retention in Manufacturing

Retention ideas for manufacturing leaders to keep their valuable employees happy, engaged, and committed to the company's success.

Desiree Grosman
November 1, 2023

There's a growing silence in many factories as aging employees retire and fewer young workers step in to take their place. This trend, combined with the competitive job market and the "Great Resignation," has made employee retention a top priority for manufacturing companies.

Finding and holding onto talent feels like trying to catch smoke with bare hands. But below we'll reveal several ideas for employee retention in manufacturing to help you keep valuable employees happy, engaged, and committed to your company's success.

Understanding the Core of Retention Concerns

Before diving into employee retention strategies, it's important to understand the root causes of employee turnover in manufacturing. The Manufacturing Institute’s Center for Manufacturing Research identified several key factors that influence an employee's decision to stay with their company:

  • Passion for their work: 83%
  • Job stability and security: 79%
  • Valuing a family-centric workplace culture: 69%
  • Job compatibility with personal life: 68%
  • Training and career growth: 42% overall and up to 69% of employees under 25 years old

The Financial Implications of Turnover

When an employee leaves, it costs your company in more ways than one. From a practical standpoint, turnover can cost a business anywhere from 20% to 250+% of that worker’s annual salary. This includes costs related to recruitment, onboarding, and training for a new employee.

But there are also intangible costs like:  

  • Loss of knowledge and experience
  • Decline in employee morale and productivity
  • Disruption to the workflow and team dynamics

Why Do Manufacturing Employees Leave?

Voluntary turnover represents a significant chunk of the turnover rates, accounting for about 75% of all departures. Why do these employees choose to walk away?

  • Career Development: Many employees leave because they seek better career development opportunities. They may feel stagnant, unchallenged, or see limited growth potential in their current roles.
  • Manager Behavior: The saying "People don't leave jobs, they leave managers," rings especially true in manufacturing. Employees might leave due to a lack of leadership or support from their managers, or if they feel their efforts go unrecognized.
  • Compensation: Competitive pay remains a significant factor in employee retention. If workers feel they can earn more for similar roles elsewhere, they'll certainly be tempted to leave.

Understanding these reasons can help your manufacturing company devise a plan to retain your workforce, reducing the costly cycle of hiring and training new employees.

To keep a pulse on employee sentiments, Team Engine's text messaging feature allows for quick communication with employees, ensuring that their concerns are addressed promptly and effectively.

The Best Ideas for Employee Retention in Manufacturing

Without further ado, here are some tried-and-tested employee retention ideas for manufacturing companies:

1. Build a Safe and Positive Work Environment

Safety is a top priority in the manufacturing world, and for good reason. Having regular safety training and protocols in place shows your employees that you care about their physical well-being.

But creating a safe work environment doesn't stop at hard hats and goggles — it also means promoting a positive company culture where employees are respected. It's the assurance that an employee can voice concerns without fear and that they won't be lost in the cacophony of machinery.  

2. Give Regular Recognition

A pat on the back is more than just a nice gesture. Acknowledging good work, celebrating milestones, or showing appreciation for an employee's commitment can boost morale and promote a sense of belonging.

Implementing a recognition program can provide a structured way for these recognitions to occur regularly. The result? Lower turnover rates, higher job satisfaction, and an overall happier, more engaged workforce.

And recognition doesn't have to come from the top down. Encourage employees to recognize and appreciate their coworkers' efforts. This not only strengthens team bonds but also promotes a culture of collaboration and respect.

3. Addressing Compensation and Benefits

While the satisfaction of a job well done is rewarding, it doesn't pay the bills. What does your competition offer in regards to compensation and benefits? Are you keeping up with industry standards or falling behind?

Conducting regular market research for employee incentive ideas and adjusting compensation packages accordingly can help retain top talent. And keep in mind that total compensation also includes non-monetary benefits like flexible hours, opportunities for training and advancement, and work-life balance (all of which are highly valued by employees in the manufacturing industry).

4. Foster Strong Peer Relationships

There's a unique bond that forms when sharing stories over a lunchbox or lending a hand on a challenging task. Encourage social events, team-building activities, and open communication to contribute to stronger peer relationships.

Pair new hires or less experienced workers with seasoned employees to facilitate the transfer of knowledge and skills. The mentees can learn the ropes faster and feel more connected to the company, while the mentors can experience a renewed sense of purpose and commitment.

5. Invest in Career Growth and Development

The dream of climbing the ladder, of moving from the shop floor to the supervisor's office, is one many harbor. With clear career paths and development opportunities, employers can ensure that this doesn't remain just a pipe dream.  

And if long-term retention is your goal, an investment in their skills now can also prepare them for future opportunities within your company.

6. Involve Employees in the Company's Success

There's no better way to improve employee retention in manufacturing than to involve employees in the company's success. When they have skin in the game, they have a vested interest in the company's well-being. You can achieve this through:

  • Profit-sharing plans
  • Bonuses for meeting production goals
  • Involving employees in decision-making processes

When they feel like their voice matters and their efforts contribute to the growth of the company, employees are more likely to stick around.

7. Gather and Act on Employee Feedback

Text message survey to employees sent via Team Engine

You can't fix a problem if you don't know it exists. That's why employee feedback should guide your retention strategies. It provides a pulse of the workplace, shedding light on what's working, what's not, and where improvements can be made.

But how do you gather this vital information effectively?

With Team Engine's text message surveys, collecting real-time feedback has never been easier or more efficient. With these insights, you can proactively address concerns, make necessary changes, and build a work environment that employees love.

8. Implement Proactive Retention Strategies

Instead of waiting for employees to hand in their resignation letters, it's important to be proactive about retention. This means identifying and addressing potential issues before they escalate into larger problems.

One way to do this is through stay interviews, where managers have regular conversations with employees to understand their motivations, concerns, and overall satisfaction with their job. This gives you valuable insights into what's working and what can be improved, allowing you to take action before it's too late.

9. Continuously Measure and Adjust Retention Efforts

Retaining top talent isn't a one-and-done deal, it's an ongoing mission that requires constant effort. That's why it's important to continuously measure the success of your employee retention strategies and make adjustments as needed.

Track metrics such as turnover rates and employee satisfaction to see how your efforts are impacting retention. Don't be afraid to try new ideas or make changes when necessary. As the industry and workforce evolve, so should your strategies for retaining top talent.

Team Engine's applicant tracking system can support your efforts here too. It helps you measure and analyze data, giving you a clear picture of what's working and what isn't in your recruiting and hiring process.

By implementing these proven ideas for employee retention in manufacturing, you can build a strong and loyal workforce. And with the help of Team Engine, you can streamline the hiring process and make your retention efforts even more effective. Grab your risk-free trial here.

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