Look around at the manufacturing companies you know. Few have the comfort to enjoy a stable team of employees, so job portals are swelling with ads. What can you do about high turnover? If everyone is short of hands, and you’ll be doing the same thing as everyone else – don’t expect different results.
In this article, you’ll read about the typical sources of employee acquisition, and we’ll suggest what you can do differently to effectively reduce turnover.
Wasting no time, here we go. How is it?
Looking at the statistical channels for SMEs to get new employees, you probably use several ways from this list:
- You constantly post ads on OLX jobs, pracuj.pl, etc.
In 2019, job portals were the most common (48%) source of employee searches for small and medium-sized companies. Also, 77% of blue-collar workers say they use them when looking for a job.
- You are already hiring foreign workers or are just scouring the Internet, typing “workers from Ukraine,” “workers from Belarus,” “workers from India, Nepal,” “how to legally hire a foreigner?”.
The reality is well summarized by Agnieszka Kucharska of PwC:
– Regulations on the employment of foreigners, unfortunately, have not kept pace with the needs of business. Some simplifications have recently appeared, but from our practice of working with entrepreneurs, it seems that still the procedures are unclear and complicated, and the whole process takes too long.
- You have a contract with an employment agency that regularly supplies workers to replace those leaving.
- You subcontract smaller details to another company on the principle of “let them worry about the people who will do it.”
- You search your own candidate databases.
- You ask for recommendations from your employees – counting on honest referrals without a bonus, or reaching for a referral bonus.
On the one hand, there are many ways to do it, on the other hand, entrepreneurs, HR and HR teams have had to work double and triple for several years to hire a competent employee.
And what exactly does the data say?
According to the GUS (Polish Central Statistic Office), at the end of December 2019, the registered unemployment rate was 5.2%. This is the average for Poland, as it is 3.6% in the Silesian province, 4.1% in the Lesser Poland province, 5.8% in the Opole province, and just 2.8% in the Greater Poland province.
The PwC report shows that by 2025, the Polish labor market could be short of up to 1.5 million people. On an annual basis, this means the need to hire more than 300,000 additional employees. PwC specialists point out that foreigners will not fill the gap, although their number in Poland is growing.
From 2013 to now, Poland leads the EU in the number of work permits issued. However, labor migration is a lifesaver not only for us, but also for other European economies that are aging rapidly.
There is growing wage pressure on manufacturing. This is clearly visible in Silesia, where registered unemployment is low (3.6%) and changing the place (city) of work is extremely easy. It’s all the easier when competitors have coaches and offer free transportation for employees from the area. According to the survey, the most common reasons for leaving for the competition are: a better offer from the competition (37%), a higher salary (23%) and in third place just a better location (14%).
In the case of regions and companies, however, where the minimum wage prevails and a manual worker will not earn more, it is worth noting the effects of raising the minimum wage to 2,600 gross, or PLN 1,923 per hand with the UoP. On the one hand, this means a significant increase in costs for employers (up to PLN 3136 per month). And on the other – for employees it is not necessarily a source of satisfaction – higher costs for companies mean increases in the price of food or fuel, which, at the end of the day, does not increase the quality of life.
If everyone is short-handed and you do the same thing as everyone else, don’t expect different results.
What can you do differently?
First – get closer to your people.
As distributors and integrators of collaborative robots, we look at our customers’ needs holistically. We talk to owners, production managers, or HR directors about stabilizing the production team, and how many factors contribute to turnover costs. Together we look for ideas to improve process efficiency.
Cobots can effectively relieve people of tedious and hard work, but they will not replace them completely. A motivated team is needed in production. One that will stay with the company for the long term, not “today he signed a contract, in a month he is gone”. Probably in every company there are record-breakers in terms of minimally short working hours, and each such person requires a standard administrative effort from Human Resources.
Let’s take a look at interesting data from a report commissioned by pracuj.pl, “On the track of good jobs. What are manual workers looking for?” :
- Only 28% of blue-collar workers are very satisfied with their current jobs. As many as 40% plan to change jobs or industries.
- What do you like your job for? Answers:
Proximity of work from home (47%)
A cool, close-knit team (46%)
Good relationship with the boss (43%)
Not feeling overly controlled (41%)
Adequate compensation (34%)
- What do you dislike your job for? Answers:
Low pay (42%),
Hard conditions (34%),
Repetitive, routine tasks (28%),
It’s hard physical work (28%)
Lack of appreciation for my work (27%)
What are the implications of this?
Soft aspects determine whether one stays in the current company. Whether someone leaves – the “hard” conditions, i.e. money and the low attractiveness of the physical work itself.
It is worth remembering that money is the main motivation to change, but it is an extrinsic motivator, so it works in the short term. This, moreover, has been studied. In the case of raises, the motivation lasts 1-3 months, after which we get used to the situation.
In contrast, hard, difficult and/or boring work is a good candidate for automation with collaborative robots.
Are bad relationships worth worrying about? Aside from the fact that humanly speaking, “yes,” according to well.hr, as much as 50-60% of absenteeism is due to stress. And bad relationships with the boss, the team, excessive control are stressors.
People are worth taking care of, but does it, so literally, pay off? A word about the real cost of turnover.
In the survey above, one in three respondents pointed to high turnover or overtime – both factors they say generate a lot of additional responsibilities.
Not surprisingly. Practice shows that some people who have already decided to leave work less efficiently, have more absences. In turn, the new ones are learning and some time will make mistakes. All this, however, does not reduce the order from the client. The work has to be done, and the “stock” will not be very large, because storage costs and the volatility of orders do not allow it. Rotation means that those who don’t rotate and pull production have to make up for the rotators.
So it is worth thinking about turnover broadly. In any company, it will be made up of the sum of various parameters.
Examples of elements include:
- the cost of lower productivity when an employee has already decided to leave the company
- the cost of more frequent absenteeism by an employee who is thinking of leaving
- cost of human resources, recruitment related to leaving / recruitment / admission
- external costs: paying for job portals,
- external costs: paying for employment agencies,
- cost of lower productivity / mistakes of a new employee who is just learning
- the cost of the person who implements and trains the new employee, corrects his mistakes
- sometimes also the cost of the dissatisfaction of the “old staff” when they have to make up for someone’s sudden absence with, for example, overtime, or when they find out that new employees have a higher rate than experienced, loyal employees, etc.
Rotation is a natural phenomenon, and it is not a matter of keeping someone by force. But when it is regularly at a high level, it is worth counting what the cost is. The same money, time and strength can be invested in cheering on the part of the crew that “wants it” and other important needs of the company.
Second – get closer to robots.
Cobots (collaborative robots) can automate some of the heavy and tedious tasks, which, as the pracuj.co.uk study cited above shows, are three of the top five factors causing dislike in the current workplace. As many as 34% of blue-collar workers indicated that they dislike their jobs because of the harsh conditions, 28% because of the repetitive, routine nature of the tasks, and just as many, 28%, indicate heavy physical labor.
For example, robotic palletizing takes as much as a dozen tons off a person’s back in one shift! And there are more positive effects on comfort, safety and reduction of harmful work.
Collaborative robots reduce errors because they perform work in a perfectly repeatable manner.
They can work 3 shifts a day, 7 days a week, Saturdays, Sundays and holidays.
When working 3 shifts, the purchase of a cobot can pay for itself after just 1 year (ROI).
Wondering if the production volume is large enough to fill the vacancy with a robot?
How much will you save in costs? What will the productivity be? Talk to our expert about the needs you face in your work. We will do our best to help you.
Robotization, as the future of manufacturing, has been talked about for a good few years. Germany, but also Slovakia and the Czech Republic are already far ahead in this process. 2020 sounds like a good year to get closer to robots. And it’s still not too late to get closer to your people, either.
Sources:
- The labor market through the eyes of employers, Trenkwalder Report, 2019
- PwC Report: Poland’s labor market may lack up to 1.5 million people by 2025, 2019
- GUS (Central Statistical Office)
- Report commissioned by pracuj.pl “On the track of good jobs. What are manual workers looking for?”, 2019
- Blog by Maja Gojtowska
- Research by Aon Hewitt “Remuneration system, 2015
- Data from IFR (International Federation of Robotics )