Company leaders are under serious pressure to anticipate and adapt to change — all while navigating the coronavirus pandemic, talent shortages, and a tumultuous economy. The labor market having been divided into “essential” and “nonessential” employees, at least for legal differentiation between necessary in-person work and remote employment, has shined a new spotlight on frontline and hourly employees who perform the bulk of our essential labor.
It’s also shining a light on workplace culture and leadership in these key industries. Historically, manufacturers and businesses that employ hourly-paid workers have considered those employees as somewhat “replaceable,” accepting high employee turnover as a fact of life. But now, many of these companies are finding difficulty in successfully recruiting for these jobs, and they’re needing to get creative to staff up during a pandemic. They are finally feeling some heat.
As executives feel the heat, they’re putting more emphasis on three key culture elements that can help attract, keep, and inspire frontline employees:
Savvy business leaders know that turnover hurts the company in many ways: in direct financial costs, in lost time due to recruiting and training, and in lost productivity due to negative impact on culture and morale. Yet at a recent conference for manufacturing leaders, a plant manager nonchalantly told me that his company’s turnover rate was 70%. I was shocked not only by that number, but also that he reported this as an unavoidable business reality.
Viewing turnover as “business as usual” is not rational and leads to extreme situations. For example, frustrated employees at Sonic Drive-In in Ohio closed three restaurants after posting a note for customers that said: “Due to terrible management, the whole store has quit.” The incident left the business reeling and prompted ownership and management to restructure.
In today’s internet-connected world, even a small franchise in Ohio can become national news when it treats its employees badly. So stop thinking of turnover casually and calculate the real impacts to your business. Be agile in developing your bench to accommodate for turnover and get creative about retaining employees.
Keeping top employees means understanding what’s engaging and challenging them. For instance, research from the Center for Generational Kinetics indicates that 40% of Gen Zers crave daily feedback from managers. Just like coaches on the playing field, strong leaders offer feedback, development, and career guidance frequently.
Unfortunately, too few managers take the time to have meaningful conversations with employees. Stop conducting exit interviews when employees already have one foot out the door. That’s like trying to move forward by looking in the rearview mirror. Do “stay interviews” instead. Simply schedule 20- to 30-minute discussions, ask open-ended questions, and listen without judgment.
Stay interviews show you care and can alert you to significant concerns employees may have. They allow you to intervene before those employees become turnover statistics. For example, using data from regular stay interviews with employees, one of our clients — Knight Transportation — gained a leading metric that identifies areas to take improvement actions in with enough time to change the outcome.
Steve Jobs attributed his success to the lengths Apple went to hire the best people in the world. Too often, hiring decisions come down to pressures that scream “get the job filled sooner rather than later.” Examine hiring processes and any obstacles preventing hiring managers from relentless pursuit of top talent. Cementing a solid reputation for attracting and retaining top talent becomes self-fulfilling and inspiring for the whole team.
Case in point: I met with a midsize company in a small town in Georgia that had a waiting list of applicants. Meanwhile, other companies in the same town were struggling to fill even half of their open positions. What made the difference? The company’s reputation for a culture of high performance.
All employees are salaried and fully trusted to act as adults. Peers hire their peers, and their standards are incredibly high because they view their company as exceptional. In fact, when I spoke with some of the line employees, I noticed that many were qualified to be in management, so I asked, “Why do you stay?” With one voice, they said they had more freedom in their current company than they ever would elsewhere.
Rapidly escalating change is causing leaders to feel the heat. You can react in paralyzing fear — clinging to the old ways that don’t offer present-day solutions — or you can embrace a better, more effective way that will take you on the greatest leadership journey of your life.
