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Nov 03, 2023

How to Reduce Employee Turnover in Manufacturing [2024]

Explore Topic: Employee Engagement

Master the art of retaining your workforce in 2024. Discover top strategies to significantly reduce employee turnover in the manufacturing industry.

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Building the right team is hard work. And there’s nothing more disruptive than when you finally get your line running smoothly…only to lose your employees to turnover. Companies have always been concerned with retaining quality workers and reducing employee turnover, but the problem only seems to get worse.

With over half of manufacturing employees indicating a possible departure from the profession in 2023, your company might be scrambling to figure out how to reduce employee turnover in your manufacturing business.

Let’s unravel the strategies to effectively reduce employee turnover and cultivate a company culture where your manufacturing professionals will thrive.

Employee Turnover Rates in Manufacturing

Struggling with higher-than-ever turnover rates? You’re not alone. In the post-pandemic era, people are leaving their jobs more frequently than ever – leading some to call this the era of “The Great Resignation.” In March of 2022, a record-breaking 4.5 million people quit their jobs. Unfortunately, the manufacturing industry is not exempt from this trend.

Currently, the manufacturing industry is grappling with turnover rates at 28.6%, compared to a national average rate of 3.6%. However, the news isn’t all bad. In manufacturing, this rate is on the decline, thanks to companies like yours taking actionable steps to reduce employee turnover head-on.

How to Calculate Employee Turnover

To crack the code on employee turnover, start by using this simple formula: divide the number of employees who left during a specified time period by the average number of employees during the same period.

Turnover Rate = [Number of employees who left/Average number of employees] x 100

While learning your turnover rate is a good first step, this number alone won’t give you the whole picture. However, it allows you to begin investigating: Who is leaving? And why?

What is a Good Employee Turnover Rate in the Manufacturing Industry?

Some turnover is unavoidable and, let’s be honest, necessary. So how can you find the sweet spot? A healthy turnover rate in manufacturing depends on the size of your company. Gallup recommended that companies seek to achieve a turnover rate that rests at 10% or less.

Any more than this could disrupt productivity. A 10% turnover rate allows companies to maintain stability while also accommodating necessary personnel changes.

Causes of Employee Turnover in the Manufacturing Industry

Why the high turnover rate in manufacturing? And what can be done about it? Read on to explore a few of the pitfalls that lead to high turnover – as well as how to avoid them.

1. Lack of Communication

Ongoing communication about employee pay and the business’s financial health can decrease employees’ intent to quit by 39%. Poor communication both between employees and within the organization can lead to misunderstandings, dissatisfaction, and ultimately, departures. Notably, a lack of transparency about pay is a major factor in high turnover rates.

Make it clear you value communication and work on creating greater transparency about your company’s organizational structure, hiring practices, and pay scale.

2. Limited Employee Appreciation

Employee appreciation might sound like a fluffy buzzword. But no one wants to work in a place where their hard work isn’t appreciated – manufacturing professionals are no different! Failing to recognize and appreciate employees’ contributions can lead people to seek that recognition elsewhere.

In fact, employees who don’t feel recognized are two times as likely to look for a new gig, increasing your turnover rate.

3. Employee Burnout

Not only do folks need to feel appreciated, but your employees need to know that their well-being matters. Intense workloads, extended shifts, and inadequate breaks can lead to employee burnout, causing talented team members to seek more balanced opportunities.

The pandemic brought mental health to the forefront of everyone’s mind. So if you want to avoid this fate, find ways to support your employees' mental health.

4. Fewer Opportunities for Growth & Development

When your employees can see a clear path for personal and professional development, they’re more likely to stay with a company. In fact, 94% of employees indicate that they would stay at their company longer if the company invested in their career development.

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How to Reduce Employee Turnover: Short-term Strategies

Now that we’ve covered some of the reasons for employee turnover, it’s time to know how to stop it in its tracks. Let’s start with some short-term strategies that you can begin implementing pretty quickly to help reduce turnover.

1. Provide Regular Employee Recognition

Employee appreciation is a catalyst for productivity and retention. Implement regular employee appreciation protocols to celebrate their success. Whether you provide awards and incentives or simply tell them when they’re doing well, acknowledging employees’ achievements boosts morale.

2. Prioritize Workstation Efficiency

When we talk about efficiency, we’re talking about the quality of work being done. And the quality of work that your manufacturing team can do is limited by the quality of their workstation. A well-designed workstation should provide your employees with the tools and resources necessary to do their job with comfort and ease. They should be designed for maximum productivity, which for the manufacturing industry means that there is limited wasted motion.

This is a win-win since it satisfies employees and increases overall productivity for the company.

3. Improve Employee Onboarding Processes

First impressions matter, so pay special attention to your onboarding process. A comprehensive and engaging onboarding process helps new hires integrate quickly and feel valued from the onset.

Almost 90% of companies indicate that sharing the company’s vision during onboarding was critical to creating a culture that keeps employees happy. For manufacturing professionals, this means making it clear to your professionals how to navigate the workstation and machinery. It also makes sure your onboarding processes tell your people what you’re all about – and what they need to do to become a part of it.

4. Conduct Exit Interviews

As they say, you don’t know what you don’t know. If you don’t understand why your turnover rate is so high, the best thing you can do is go straight to the source. When employees are leaving your company, exit interviews can provide valuable insight into the reasons for employee departures so that you can address the issues head-on.

Plan out exit interview questions in advance so that you can gather the information needed to make changes in a systematic and organized fashion.

5. Implement Clear & Flexible Attendance Policies

Attendance matters. After all, productivity depends on your employees showing up. But what matters just as much is that your employees understand your policy. Discovering how to write a fair and transparent attendance policy should be a priority for anyone concerned with retention.

Absence management systems like TeamSense can help you monitor and manage attendance efficiently, promoting a transparent work environment with clear communication. Our text-based attendance management system makes it easier for employees to call out, so supervisors don’t have to stress about no-call no-shows and frantically fill shifts.

Instead, employees just text a keyword to their company’s number and fill out the short survey they receive back. Managers and supervisors are notified in real time and the data is automatically synced to the systems they need it.

6. Recognize Poor Culture Fits

A bad apple spoils the bunch. The truth is, not every employee will be a good fit, and that’s okay. But when you recognize that an employee is demonstrating toxic behavior, it’s important to address it immediately.

If it doesn’t get fixed, you might need to cut that employee loose. Losing one toxic employee could mean keeping many more. It might seem counterintuitive, but sometimes you have to say goodbye to an employee who is a poor culture fit to reduce your turnover rate.

How to Reduce Employee Turnover: Long-term Strategies

If you really want to get to the bottom of your company’s high turnover, you’ll have to dig a little deeper. We’ll now talk about the strategies to pull back the hood on your company and create strategies that will have a lasting impact.

1. Prioritize Engagement & Retention

Engaged employees are happier employees. Unfortunately, employee engagement has been plummeting since 2020, with only 32% of employees reporting being actively engaged and 18% reporting being actively disengaged.

Engagement can have a huge impact on turnover, so implementing strategies that enhance employee engagement and loyalty makes it much more likely you’ll retain the employees who are happy to be there.

Consider offering opportunities for professional development and training, conducting town-hall styles with leadership, and hosting team bonding events like bowling or group sports.

2. Offer Great Work Benefits

In the era of The Great Resignation, employees have made it clear that benefits matter. Competitive benefits packages, including health insurance, retirement plans, and wellness programs, make employees feel valued and supported.

A recent survey on the importance of benefits showed 24% of employees indicating that flexible work hours are the top priority, while 20% considered childcare benefits to be the most important. Spend some time figuring out which benefits matter most to your employees and assemble a benefits package that shows that you’re listening.

3. Maintain a Safe Work Environment

For manufacturing professionals, safety is at the forefront of their minds – and they want to know that it’s on yours too. 1 in 3 employees cited workplace safety as one area where they feel most unheard by their employers. That’s for good reason: manufacturing is the industry with the third-highest rate of workplace injury.

Provide safe equipment and protection for your employees, eliminate workplace hazards, and ensure that you have clear communication protocols so employees can report safety concerns and know that they’ll be swiftly and adequately addressed.

4. Improve Communication & Team Relationships

Take the time to foster communication and collaboration among employees. Show that you value their contributions and build meaningful relationships. When a team feels like a family, productivity increases and turnover falls.

In fact, communication and relationships may even be more important in retention than factors like pay or benefits. According to the Achievers Workforce Institute, 79% of employees said they would be more likely to stay at a job where they felt valued than one where they were not valued but paid 30% more.

5. Invest in Better Technology

Any workplace that wants to remain competitive in today’s world should have cutting-edge technology. Whether we’re talking about Enterprise Resource Planning (ERP) and accounting software, Manufacturing Execution Systems (MES), attendance management software, or any of the other systems designed to streamline processes for your company, you should be investigating how manufacturing software can be working for you and your employees.

6. Provide a Comprehensive Training and Development Program

Believe it or not, teaching your employees new skills doesn’t automatically mean they’re going to be polishing their resumes to send to a new company. Offering continuous learning opportunities can help employees advance within the company rather than look for opportunities elsewhere.

Even if there isn’t an immediate opportunity to move up the ladder, people stay where they feel that they can grow. Keep your people by prioritizing their training and growth.

7. Improve Overall Company Culture

Would you like to spend your life working in a toxic environment? Absolutely not. And neither would your employees. Recent Pew research indicated that 57% of employees who resigned in 2021 did so due to a lack of respect in their workplace. Creating a culture of respect matters.

There are many ways to improve company culture, but the bottom line is that creating an inclusive, supportive, and positive work culture that encourages collaboration and innovation is the foundation of employee retention.

Wondering where to start? Try identifying your core values. A strong, clear mission statement can inform all other decisions, from hiring to culture. And once you define your “why”, make sure it’s clear to your employees. When everyone is on board, you’re on your way to a cohesive company culture.

Reduce Employee Turnover in Manufacturing

In the ever-changing landscape of manufacturing, the imperative to address employee turnover cannot be overstated. With a staggering proportion of professionals contemplating departure this year, the industry faces some big questions.

Employee retention requires an ongoing commitment to both immediate and sustained strategies. By championing employee engagement, creating a nurturing environment, and providing avenues for growth, manufacturing companies can curb turnover and usher in an era of sustainability and growth.

Want to get some immediate relief? Get started with the simplest employee call-off system on the market: TeamSense. TeamSense is an app-free digital connection to your hourly workforce that’s loved by both frontline workers and the people who manage them. By minimizing call-off disruptions, preventing downtime, and leaving more time for employee engagement–not to mention a 48 hour roll-out time–TeamSense can help you start reducing your turnover rates today.