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Attracting and Maintaining a Quality Workforce











Attracting and Maintaining a Quality Workforce

Dean M. Peters, Consulting Editor
email: It is an enduring paradox of business that an enterprise’s most valuable asset – its people -- is carried on the books at zero value. Whether you own Joe’s Widget Company in the local industrial park or you run General
Electric, there is not a single cent of balance sheet value assigned to the quality of a your business’s management staff and labor force. And yet, it is the people behind an organization that drive its performance, keep the day-to-day operations running smoothly, and ultimately determine whether that business will succeed in a competitive marketplace.

This being the case, it behooves organizations that wish to maximize their financial performance, and enhance their standing within their industries and their communities, to pay close attention to the recruitment and retention of quality human resources.

How and where can one find good prospective employees? And once they’ve been found and hired, how to keep them?  These are daunting questions, and many a survey has been done among manufacturing executives in which they claim finding and retaining good employees is one of their top three concerns.

If you stop and think about it, nearly every local community has an employer or two by which many wished they could be employed. These companies have their pick of qualified applicants every time a job opens up. How does this happen? What does an organization have to do to earn itself such a reputation among the workforce?

More careful scrutiny of such “model” employers suggests that their success is based on more than simply offering a competitive salary and benefit package. Obviously, financial compensation is important, but there is hardly a worker on the planet that, in the long run, wouldn’t rather be paid a little less and be happy on the job than be more highly paid and miserable at work. So a favorable work environment has a lot to do with reducing the rate of employee turnover. And we don’t mean just the physical environment, either. There is an emotional environment present at every workplace that registers with an employee as either a positive or negative factor in his or her life.

It is in the combination of physical and emotional workplace environments that the concept of corporate culture takes ‘root.’ The term corporate culture is difficult to define in precise terms – it means different things to different people and takes different forms in different companies. But it should surprise no one that companies with an admirable corporate culture enjoy a lower employee turnover rate than those that are strictly and myopically focused on producing their brand of widgets.

The root metaphor is appropriate here because a positive corporate culture doesn’t just happen. It has to be nurtured, much as a seedling plant needs to be tended by a gardener, to growth by executives. And like a plant, corporate culture has many stems that comprise the whole. A formal corporate mission statement can communicate to internal and external stakeholders what the company is all about. But this is only one stem of the culture. Other parts of the culture may be in rewarding behavior in which employees are caught doing something right; or in encouraging best practices suggestions from the shop floor; or motivating employees to be involved in the community at large.

Another component to successful corporate culture might be the establishment of innovative benefit packages. For example, if a particular workplace employed many single parents, then a benefit option for child day care assistance might be a great idea. If you hire many workers with little education and few skills, about one in five of them is functionally illiterate, so you might want to offer them classes to bolster their reading skills – and their confidence along with it. Or, if much of your workforce only understands English as a second language, some help with language courses could be a good benefit. Finally, a little personal attention to events in employees’ lives and careers goes a long way. A personal touch like buying lunch for an employee on their birthday or employment anniversary goes a long way in letting that person know the company appreciates and cares for them as an individual.

But let’s get back to the original questions. We briefly touched upon making your enterprise a place where people want to work. This makes the attraction of talent a little easier, but you’ll still have do some digging to get the best talent available. The print media, the Internet, employment agencies, and community word of mouth are all ways to find talent. But studies have shown an overlooked source of job candidates is your employee base. Many jobs are cheaply and efficiently filled by one of your current employees who “knows somebody.” Some companies even offer a small bonus for an employee that recommends the successful candidate to fill an open job slot.

Once found, how is a good employee kept?

The answer is simply to treat them fairly with regard to compensation and benefits, professionally regarding their actual job function, and with respect and dignity when it comes to personal matters. These matters are best handled by an individual or department, whose job it is to oversee human resource management. Whether your organization employs two associates or 2,000, the attention paid to human resource management should vary only by degree.

Why? Because it has been shown that proper management of human resources and pertinent issues maximize an organization’s performance and profits.

Consider the problem of employee turnover rate. Researchers have estimated that turnover costs account for between 5 and 10 percent of wage costs. If your turnover rate is higher than normal so will be your wage costs, and this type of extra cost won’t produce a single extra unit of product.

Employee turnover adds to employers’ costs in four ways: direct costs, such as money paid for job ads, search firms, etc.; management time spent on unproductive matters; lower productivity by both the new employee while he or she learns the job and the experienced worker involved in their training; and loss of capacity while a vacancy remains unfilled.

It is the responsibility of a company’s senior management to adequately control its wage and salary costs, and provide a culture of advancement and personal growth to its employees. The cultivation of a corporate culture and investment in human resource professionals are part of this process, for in the long run it is better for a company to have the respect and support of its own workforce than for that workforce to be frozen in the ice of its management’s indifference.

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