Episode Show Notes
Episode 1 features Engage Forward Consultant, Trainer, & Coach/Advocate Lisa Rawcliffe and CMTC Senior Manager of HR, Administration, & Recruitment Jeri Summer. Lisa and Jeri discuss the factors impacting SMMs in the current labor market, top tips to attracting and retaining talent, and the importance of workforce development.
Lisa Rawcliffe is a Consultant, Trainer, and Coach/Advocate at Engage Forward. She has over 17 years of manufacturing experience with progressive leadership roles in Sales, Continuous Improvement, Operations, and Quality. Prior to consulting, Lisa served in various management roles in manufacturing companies that included contract food manufacturing, pharmaceutical packaging and distribution, folding cartons, thermoformed plastics, iron foundry, machining, and assembly operations. In each setting, Lisa developed and proved proficient in leading and managing change to improve company performance and customer service. She is skilled at developing talent and creating systems that sustain improvements and promote growth. Inspired by first-hand experience with the current workforce challenge facing manufacturers, Lisa began consulting to help organizations develop a continuous improvement culture that improves performance as well as attracts and retains top talent. Lisa also works with local workforce development partners to engage, inspire, and empower a future workforce. Lisa has achieved certifications as a Certified Trainer in Toyota Kata, TWI Job Relations, Job Methods, and Job Instruction . Lisa is also a dedicated NIST MEP partner, serving centers in CA, MA, NY, and VT.
Jeri Summer is Senior Manager of HR, Administration & Recruitment at CMTC. She has over 25 years of strategic design and functional implementation experience in Recruitment, Human Resources and HR Business Process Outsourcing services. As part of a global Human Resources consulting firm, she provided leadership to a team of 500 global recruiting professionals that produced 100,000 hires annually. Prior to joining CMTC, Jeri held senior leadership positions at Aon-Hewitt and The Right Thing/ADP, providing direction to the national Human Resources Outsourcing teams in recruiting services and human capital management. Her portfolio of clients included NCR, BP, Sun Microsystems, McKesson, Bank of Montreal, Bank of America, and Prudential.
00:01:21 - Introductions
00:02:12 - Discussion about current US labor force across all economic sectors, including generation distribution
00:10:24 - Factors impacting SMMs in current labor market
00:12:31 - Why employees leave their jobs, according to research
00:17:09 - Impacts and intangible costs of employee turnover
00:19:58 - How to attract and hire better applicants
00:34:18 - How a small manufacturer can ensure they have five stars on websites like Glassdoor and Indeed
00:36:33 - What type of culture candidates seek
00:43:47 - Skills development as it relates to employee retention
00:48:10 - Definition of workforce development and why it is important
[00:00:00] In the world of manufacturing change is the only constant. How are small and medium-sized manufacturers, SMMs, to keep up with new technologies, regulations, and other important shifts let alone leverage them to become leaders in their industries? Shifting Gears, a podcast from CMTC, highlights leaders from the modern world of manufacturing, from SMMs to consultants to industry experts. Each quarter we go deep into topics pertinent to both operating a manufacturing firm and the industry as a whole. Join us to hear about manufacturing sectors' latest trends, groundbreaking technologies, and expert insights to help SMMs in California set themselves apart in this exciting modern world of innovation and change. I'm Gregg Profozich, Director of Advanced Manufacturing Technologies at CMTC. I'd like to welcome you.
In this episode I'm joined by Engage Forward Consultant, Trainer, & Coach Lisa Rawcliffe and CMTC Senior Manager of HR, Administration, & Recruitment Jeri Summer. Lisa and Jeri discuss the factors impacting SMMs in the current labor market, top tips to attracting and retaining talent, and the importance of workforce development.
Gregg Profozich [00:01:09] Welcome, Lisa. It's great to have you here.
Lisa Rawcliffe [00:01:11] It's great to be here. Thank you.
Gregg Profozich [00:01:13] Lisa, can you take a minute or two and just tell us a little bit about yourself?
Lisa Rawcliffe [00:01:16] I'm a former manufacturer. I used to work in industry for about 17 years and fell into the manufacturing career by accident. I found to my delight that I loved it, and I have been making it a mission to pursue helping others find the same experience at work.
Gregg Profozich [00:01:31] Fantastic. Thank you so much. Welcome, Jeri. It's great to have you here.
Jeri Summer [00:01:34] Thank you, Gregg. Glad to be here.
Gregg Profozich [00:01:36] Jeri, can you take a minute or two and tell us a little bit about yourself, as well?
Jeri Summer [00:01:39] Sure. Thanks again for having me. I'm looking forward to this. I have over 25 years of experience in Human Resources. Started off as a generalist. My last generalist role was as a director of HR for Unisys Corporation. The last 20 years has been spent as a recruitment process outsourcing professional. I've been servicing clients in that area for a long period of time. I've been with CMTC for the last 11 years, and I'm responsible as the Practice Lead for HR solutions to our clients.
Gregg Profozich [00:02:14] Excellent. Thank you so much. Thank you both. I'm excited about our conversation today. I'm looking forward to hearing your perspectives and your insights. Let's get started. We're here today to talk about a topic that I believe is near and dear to virtually all small and medium-sized manufacturers today—recruiting and retaining talent. Working with a number of manufacturers in the past few months in CMTC's Advanced Manufacturing Technology practice, there's an issue we've constantly been hearing about across the industries—SMMs can't find people. It's funny that in much of the media, one will hear about this fear that a robot is going to take people's jobs. That's not the reality at all, it seems. Robots can't do the vast majority of what people can do. Manufacturing leaders aren't looking to use robots to replace existing employees; instead, they're trying to see if they can use robots to fill gaps in dwindling employee rosters because they have workstations that they can't consistently staff. It's a real issue affecting so many leaders in other industries, as well. Let's put things in context. Jeri, Lisa, can you tell us a little bit about the current US labor force today across all economic sectors? How are the given generations represented? What are some of the demographic trends?
Jeri Summer [00:03:15] Right now, clearly a challenge in attracting and retaining talent across all industries but particularly in manufacturing. If we look at boomers, if we look at millennials, if we look at Gen Zers, right now, 75% of the current workforce is in the baby boomer population, and 2.6 million of those individuals are in manufacturing. They're typically people who seek stability, longevity, and loyalty. They have a belief that if they do well, that will be recognized, and they will be promoted for doing well. In the year 2025, the prediction is estimated that there will be a skill gap that we all need to address but particularly in manufacturing. There'll be about 600,000 skill gaps between what is currently available in the talent workforce and what is needed going forward. Conversely with millennials, by the year 2030, which seemed like it was a long way off but not any longer, that 75% of boomers will be replaced by 75% of millennials. Right now, millennials are about mid-career, middle age, getting to. By the same year of 2030, about 4 million jobs will need to be filled. What the research is estimating is that about 2 million will be qualified for those 4 million jobs, clearly presenting a really dire situation to our manufacturing population. On the millennial side... Some of this sounds like generalities, but it's been proven through surveys and through research that millennials really sought greater flexibility in their roles, in their careers. They saw themselves as influencing their careers much more than, let's say, a baby boomer who was thinking, "I do well, I get promoted." By the year 2030, the same situation will be in the face of our manufacturing population. That is, as boomers are retiring now and in 2030, they'll need to start looking at millennials leaving the workforce or at least starting to transition out. What's happening now is going to happen again in 2030. Different generation. One of the things that we see is that with millennials, they've had more of an influence over their own careers. They've been more technology-enabled, much more so than, generally speaking, boomers in the workforce. Then from a Gen Z perspective, we're looking at about 25% of the 2030 workforce will replace those millennials as far as Gen Z is concerned. They'll definitely continue to drive their careers. They'll want to know where their next roles are almost as soon as day one on the job. They've been quite demanding about what they will expect and will receive from an employer's environment. Also, they're seen on the employer side as a bit of a perceived risk, if you will. We talk to manufacturers and hiring managers who say this person stayed two years in this job, two years in this job, one year in this job. From an employer's hiring perspective, they see that as a risk versus starting to look at a different generation that has different needs in the workforce. We try to help our clients understand that. I know Lisa's going to talk about workforce development and how important that is as we look across where do we find the next set of talent. Those are some of the things that we are seeing right now in the marketplace, as well. From a candidate's perspective, Gen Zers are asking one, what are the COVID protocols of the manufacturing environment, and two, what is their focus on diversity, equity, and inclusion? Candidates are asking us that as we represent not only CMTC but our clients, as well.
Gregg Profozich [00:07:21] Thank you, Jeri. Those are sobering and significant trends that we're talking about. They really indicate that there is a lot of work to be done and a lot of change happening in the labor force. Lisa, anything to add?
Lisa Rawcliffe [00:07:30] Yeah. Just to tag along with Jeri's statistics and references there, having worked in industry, we've found from our own experiences, the experience lines right up with that. We are in a day and age where there are sometimes five different generations working side by side in the workforce today in manufacturing. The expectations, the needs, the requirements of each employer of those generations is different, and each person in the workforce has different needs and expectations that they're looking to have met. There has been a shift from the boomers' generation, where they were more prone to stay in a company, in a career, for a long period of time. They had an expectation of their employer that's different than incoming generations into the workforce today and all the generations in between. Today people are changing jobs, and careers, and companies much more frequently, because there's a driver behind that. They have needs and wants that need to be met. It's not always centered around salary and the monetary benefit of working. People are seeking something different than they used to seek before. The concept of stability has been redefined. The pursuit of professional development and growth on personal and professional development has been prioritized differently today than it has, maybe, in prior generations and workforces that are now beginning to exit the workforce. Employers are finding that they have to make a shift in how they approach that, how they set their own expectations for themselves in being an employer of choice, and what expectations are reasonable to expect of people wanting to come and work with them. These shifts are sometimes feeling disruptive for organizations that are lagging in adapting to these new conditions. The layer of technology also has a significant factor. Again, these are blanket statements, so there's always a risk when we make them. The older generations did not grow up in technology in the same way that younger generations have. The adoption of those technologies, the incorporation and the growing of those technologies, and their uses in the workplace are different across the generations that are working together now. We're not even talking necessarily about robots and highly advanced pieces of equipment. It could be the use of ERP and MRP systems and a higher level function of using Excel and using the Internet as a resource for data collection or data finding rather than other methods. Differences in the workforce are showing difference of application and use of technology, and the way they interact with that, and the comfort level. These are all things that an employer is having to monitor, and keep track, and adapt to. It's a tall order for anyone, especially small and midsized manufacturers with maybe less resources than larger organizations. Staying ahead of that curve, staying in pace with that, keeping our technologies current so that we're attractive to incoming workforces is a critical part that we're beginning to see the effects of.
Gregg Profozich [00:10:26] Thank you, Lisa. There's some great points there, as well. Let's get into some more of the detail here. Can you describe for us a little bit the current labor market for the manufacturing talent? What are some of the factors impacting SMMs?
Lisa Rawcliffe [00:10:37] We're definitely seeing there's a higher level of competition for workforce. People are not only changing jobs, but they're changing careers entirely. People that used to work in one industry are now reconsidering that and considering something else. The competition for workforce is stronger than ever before. Employers are starting to recognize that the ability for them to win a candidate's interest and commitment takes more today than ever before. We're also struggling in manufacturing with stigma and a lack of awareness of what careers really are present and available in manufacturing. The spectrum of those careers is far and wide. Entry points to those careers can range from a high school diploma through advanced postgraduate work and everything in between. A lot of people don't necessarily recognize that full spectrum of career choices that are available nor do they recognize the types of wages that are possible with a career choice like manufacturing. We've done a lot of work volunteering in schools to advocate to young people about these careers. We would put up on the screen the different types of positions and roles, and we define them. We would show current salary ranges in the region of which we were speaking to students. We would have teachers, and guidance counselors and parents come up to us afterwards and say, "They're actually paying that? Do you know of any positions that are open?" because they had no idea what was possible. There's just generally a misunderstanding or a gap in people's awareness of what manufacturing looks like today. If we can fill that gap, I believe we would have more people even considering to apply. They might be picturing a factory from turn of the century. We've come a long way in manufacturing in every possible way. We want to encourage people to take another look and see what's out there. That stigma, that lack of awareness, and the stiff competition is definitely affecting us right now.
Gregg Profozich [00:12:33] I think you're absolutely right about the stigma and the sense of what manufacturing is. I'm guilty of it myself. It seems like we all want our kids, when they go through high school, to go to college. But there's not necessarily great jobs that pay for your college degree very quickly. But a manufacturing career doesn't seem to have the same nobility anymore. It's not seen as an equal role, where I think in other parts of the world both are seen as more equal. I think you're absolutely right. Manufacturing floors are clean and high-tech; they're not the grimy steel mill my grandfather worked in. That's not the reality anymore. Based on the industry research, why do employees leave their jobs?
Jeri Summer [00:13:07] It's been difficult for employers that we support and that we're working with to really recognize how rapidly that competition for the talent pool is changing. They are focused and worried about their hourly wages and what they can and cannot provide, because it's something that they haven't done in the past. They haven't maybe been as creative as possible when attracting talent. What they're seeing is their competition for some positions—places like Amazon fulfillment centers, or Walmart fulfillment centers, or QVC—where they're paying $1,000 bonuses, $5,000 bonuses, or even offering a full ride to college for tuition payments. As we can help to grow the manufacturer's tent, if you will, as to what they look at in terms of future talent, that would be helpful. But in terms of turnover, some research, and statistics, like from the Advanced Manufacturing Institutes, and also Bureau of Labor Statistics, Department of Labor, do show that there's a pretty close tie at around 40% of people leaving due to pay or total rewards. I include total rewards because that includes benefits: insurance, rewards and recognition programs, any kind of spot bonus or incentive, or even public recognition. They're leaving for that in terms of total rewards, but a good 35% are indicating that there's not enough advancement available to them in the manufacturing environment. It could be there, but manufacturers haven't always had a clear line of sight to be able to share either with new hires or their existing population to say, “Here's some career growth for you, and here are those opportunities.” Then close to 30% are leaving due to a lack of learning opportunities. That same amount is leaving because they're feeling undervalued or underappreciated. In focusing on some of those issues and also knowing them, an average statistic for manufacturing turnover has been about 37%. This includes, not only people who’ve separated from the companies, but also the absentee rate that we have seen that’s so high due to the pandemic. So that would include anyone on a long-term COVID release, a leave of absence, or anyone under FMLA. Estimates are that can continue to grow between the pandemic and also what we're seeing in terms of people selecting new careers. That's something they definitely need to focus on. Those are some of the things, but also due to the pandemic, people are no longer willing to accept the status quo. They really are looking for something else. It looks like those learning opportunities and growth opportunities are out there and things that are something a manufacturer could address with focus.
Gregg Profozich [00:16:13]. Lisa, anything to add in that area?
Lisa Rawcliffe [00:16:15] Turnover is costly any which way you calculate it. It's much larger than we expect. It doesn't necessarily show up on your P&L statement as a line item, but it's buried in there. That cost is real and it's significant. Any investment that is made by an organization to reduce that number will pay you back in dividends very quickly because of avoiding that cost and reducing that cost.
Gregg Profozich [00:16:40] Let's talk a little bit more about those costs. What are the impacts of turnover on SMMs, and what are the intangible costs that sometimes don't show up on the P&L or the balance sheet?
Lisa Rawcliffe [00:16:48] When people turnover those positions, you lose a tremendous amount of what is commonly called tribal knowledge, or those special little knacks, or something that people know about how to do the work, whether it's something technical, something in the shop floor in production, or something at a high level with the finance or the engineering aspects of the job. Either way, that loss of knowledge without a successful transfer of that knowledge is going to affect us. It will slow us down. It will slow down our ability to innovate, and solve problems, and come up with new ideas for solutions for our customers, and help us be competitive. That loss of knowledge has a significant impact. The impact to production, meeting customer expectations for having quality products and on-time delivery with an acceptable lead time, that all comes with people knowing how to do their job, and do it well, and do it consistently. When we jeopardize that with having turnover, and loss of people, and maybe having extended periods of time where those positions remain unfilled, then people are overtaxed and overburdened trying to make up for that gap until we can find an adequate replacement. Then we need to adequately onboard and train that person to be able to perform at the level of the person that was in that role previously. You can see how this impact can stretch out over not just a matter of weeks but months and possibly even years of impact on the organization, and how they serve their customers, and how they solve problems, and innovate solutions, and be competitive in their marketplace. There's the other day-to-day. People changing jobs and coming in new, there's always an elevated potential for safety issues. That can happen with experience, and knowledge, and maybe a lack of proper training. The impacts of this are almost infinite.
Jeri Summer [00:18:32] Gregg, if I can add, what is the cost of turnover? We typically estimate between 40% and 50% of that individual's salary and for all of those reasons—time to find the person. We think those costs will increase exponentially the longer it takes to fill the position because having the position open; the lack of productivity; the attention, and time, and effort that a hiring manager or the hiring team has to devote to interviewing candidates when they can find the candidates; and how long that position is open. To support that, we typically use an average of 40% to 50%. Certainly, the higher level in the position, the greater percent of base salary, but that's a good estimation. As we're seeing positions remain open longer and longer, we're getting closer to 50% on a very rapid pace.
Gregg Profozich [00:19:29] Those are some significant costs, and it all makes perfect sense. The woman doing the job for 25 years has jigs and fixtures that she uses to do it right every time; the new person coming in may not understand what they are. The person's not trained on them; the knowledge of how to do it right goes out the window, quality is impacted a little, productivity is impacted a little, et cetera. You add up all those little things across turning over people, and it ends up being significant. Most small to mid-sized manufacturers don't have a training group, don't have a training department; they don't have recordings of how the job is being done. They may have standard work, but is the standard work always up-to-date? Lots of tribal knowledge or technical memory, absolutely. Burden on the other employees, where there's somebody out of the production department, but we still have to make production. Everybody has to work harder and pick up a little slack here and there. That grates on morale. Then safety concerns, absolutely. New people in, they don't understand the lay of the land. There's always that, especially very early on. How do you attract and hire better applicants? We've talked about the lay of the land. We've talked about the changes that are coming. It doesn't seem like things are going to be getting any easier. Seems like there's going to be more complexity, and more variability and more wants and needs by employees as well as by employers as we go forward. How do we attract and hire better applicants? Jeri, why don't you start us off?
Jeri Summer [00:20:37] I think the first thing that we try to advise our current environment manufacturers with is have an open mind. Be willing to try new things. If you are accustomed to only receiving walk-in traffic, you're going to have to find a new way to identify future talent pools. Utilize social media. A lot of manufacturers don't necessarily do that. They may not use Facebook, or Twitter, or Craigslist to attract that new talent. One of the things that we try to encourage is that people start to establish greater community relationships—schools: high schools, community colleges, and universities. While that takes time, once you establish those relationships, those individuals will reach back out to the manufacturer just to say, "Do you have any opportunities? We've got these terrific graduates, our new group of high school folks that are interested in coming for a tour." All of those things do take time. But if you're only accustomed to hanging the sign out your facility saying We're hiring or only running an ad in a small newspaper, those are things that may not be getting you the reach that you need to cast a wider net. One of the things we also recommend is if you don't have an employee referral program in place, establish one. If you've got people who've worked with you for a period of time, they're good performers, those are the people you want referring other people to your company. The reward doesn't have to be huge. It can be budgeted, but it can be a perk to the employee. The other things we do is we try to encourage: know your competition. If you're in a facility or a location that has similar manufacturing three, four, five buildings down the road, you might want to consider having some kind of meeting or consortium with those individuals so that perhaps as a group you can start to build further community relationships. Then, of course, if a manufacturer can afford and if they can budget for it, some kind of sign-on bonus to incoming talent might be helpful, as well. We're seeing something that's come up in the industry. The term has been picked up from social media. That is, we're seeing a lot of ghosting, candidates ghosting the recruiter. Once they say, "Yes, we're going to come in for an interview," they come in then, or they don't come in. They go to the hiring manager. Thinking about things to get people in the door, to get them to interview, and then actually get them to start the job. We know of a recent manufacturer who had 70 applicants submit their interest for a job. Of those 70 applicants that were qualified and asked to come in, only one showed for the interview. Then sometimes even when an offer is extended, they say, "Yes, I'll accept," and then on day one there's no-show. There are a lot of different things and different avenues, even advertising differently for open positions. There's a group called Creators Wanted. That's a joint campaign between the National Association of Manufacturers and the Manufacturing Institute. Heavy in the Northeast, Southeast, and the Midwest, but something that the population in California may want to explore. They're approaching the candidates differently. I've come in to fill a job. There's a widget. Really being able to explore the full spectrum of what's available. Are you a creator? Are you creative? Might manufacturing be for you? It's a different way to advertise the position. Those are some things that we recommend.
Gregg Profozich [00:24:18] Great points, Jeri. Thank you so much. Creativity, thinking about things differently, using different channels. I don't know about the rest of the generation, but kids in high school and college-age in their 20s, they don't read the newspaper. They're on their phones continuously. If I run an ad in the paper, it's probably not going to work, but if I put something on Instagram, or Facebook, or whatever platform they're on, I got a good chance of at least being seen. Not that it's going to take care of the rest of the problems, but being seen. Have greater creative relationships. Probably great idea. How do you simplify it? How do you make it not become a major time constraint for a small to midsize manufacturer? Because most small to midsize manufacturers, like Lisa said, it's generalities. It's probably not exactly true, but most of them are too busy working in the business to work on the business. If someone calls off sick, they leave their desk and go out and run the mill, run the machine to make shipping, to make payroll. It's that reality of there's not a lot of extra. How do you find time? But the consortia idea, that could work out. If four or five manufacturers close together can afford an hour to get together and then take turns going out and building relationships, maybe something like that works. Great ideas. Lisa, anything to add there?
Lisa Rawcliffe [00:25:20] I particularly like the consortia comment, because I've seen that myself firsthand with organizations that did band together, particularly in areas that may not be next to or in a large metropolitan area. Sometimes they are. There's a great example of it in the Northeast, where a group of employers—manufacturers—came together and did just that. They created a highly organized consortia. They ended up really changing their own reality regarding workforce, regarding a lot of issues that they were facing. They were all small manufacturers, but together they found they had a lot more strength; they had more buying power; they had more ways to attract people to that region for those careers. They also formed a very successful relationship with their community college network in their state which had, prior to that moment, really lacked in their connection with the manufacturers in their state. When these manufacturers banded together and formed a consortia, they were able to advocate for themselves much more strongly and have a successful impact with the community college, who then made investments towards programming and educational systems that would support the jobs that were there. When you add up the jobs that were available across all of these small employers, it caught more attention when they had created that consortia. It really shifted the tables completely for them. It's a very successful region. Regarding looking at different ways that you are communicating your opportunities that are there for people that are looking at jobs, looking at companies, looking at careers, looking at ideas, they're going to pull out their phone, and sit on their back deck, and look. The idea of having an Internet presence and social media presence as a company is not necessarily just to attract customers, but you are trying to attract talent. The more information and the way you present yourself can also help give you more visibility. Don't be discouraged if you find yourself feeling like you're a small manufacturer in a town with a large employer that you're competing for workforce. We see that very often. It's tough for the small manufacturers to be able to offer the same kind of benefits and wages that a large employer is able to offer, but there are ways to do that. In real estate, they talk about location, location, location. Well, I can tell you that for manufacturing it's reputation, reputation, reputation. The investments that we can make in ourselves, and the culture that we create in our organizations, the reputations we have in our community, and how we present our plants for people driving by, how we maintain our properties, the way we interact with our community, participating in events and fundraisers, participating in school activities, and making ourselves visible to the school system for all types of reasons and occasions, it's all part of your reputation. That reputation stands out stronger than anything else. The image, the perception people have of you as a company will either be a barrier that will prevent them from looking further, or it will be an invitation for them to look again. Any opportunity you have to present your good reputation to the community is going to serve you well when it's time to attract talent. Because if you don't and if your reputation is in question or is a blank, people will fill it in for whatever they choose to. We don't want them to fill it in with some carried-over stigma that they picked up from hearsay. You want to be able to own that reputation and shape it. Now, behind that reputation are actions that we need to take as an employer, and that may mean some self-reflection for us. Can we do better in creating a culture that we have people working with us that can go home every day and say, "You know what? Today was a good day at work. Oh, it was tough. We had these crazy things happen, but we worked together as a team. I know my boss respects me, and they valued my input and my contribution, and I respect them because I know they're in it with me." That will speak louder than any ad you can put out there for a job when you have people that are going back home, back to their communities every day, and they're standing proud with your shirt on, with your logo across the back, and they're happy to tell you the story of how awesome it is to work in your company. Those stories are possible. You can make or break the success of that story being able to be told by how we manage our teams, how we develop people, how we respect one another, and communicate across the organization. Imagine the power of that type of an experience when a person goes home every day, and they're sitting at the dinner table with their family, and their kids are looking at their parent and saying, "Oh, I see you had a great day at work." "Oh, yeah. Let me tell you all about it." Now that kid in the home has a different perception of what the working world is like, what's possible. That notion about manufacturing as a career is a whole different impression than if we're sending people home every day from our companies, and they're fatigued, and they're tired, and they're cranky because they're disrespected, and they're not understood, and they're not valued. We're sending a very negative message to our emerging workforces about what the working world looks like, and feels like, and what's in it for them if they want to pursue it. We've also seen a lot of employers make better use of apprenticeship programs or transition programs that take emerging workforces and introduce them to a career in their organization. Whether you formalize it through a statewide apprenticeship program or you have an informal program where you set up an onboarding and training plan for a person coming into this career, those can be very successful in attracting talent, because it shows a person that you acknowledge that this is a brand-new path, and we're prepared to support you on your professional growth, and take this journey with us together. Offering a program that is well-thought-out, and organized, and planned for, and the pay is adjusted as people show proficiency and their learning has brought them to a point where they can deliver on those skills, that is a very good and strong approach for bringing not only young people or emerging workforces but even people in transition that are changing careers. Maybe they've always had a career in retail for the last 15 years. There are a lot of those jobs as big box stores are closing left and right. There are a lot of available people that could be captured and brought into these programs that will help them transition from one different career into learning how to perform and function very well in a manufacturing environment and find the great value and reward that they can have from that type of a career.
Gregg Profozich [00:31:44] A ton of information there, Lisa. Thank you so much. Jeri, I think you had something to say?
Jeri Summer [00:31:47] I did, yes. Thank you. I have two comments from Lisa, and that’s reputation and then, also, onboarding. From a reputation perspective, the one thing I would add is, as hiring entities, how do you treat your candidates? Do you respond when they apply? If they send you an email or call asking what their status is, do you just ignore them, or do you respond? There's an attraction point there in addition to your overall reputation. You've got this great reputation, and now you're going to want to make sure you carry that forward with how you treat your candidates. Candidates are jumping from one opportunity to another because there are so many more opportunities than candidates that are available. I would add that to the reputation piece. Then on the onboarding side, no one likes to start a job where you walk in, sit down, and you don't know anyone, you don't really know the goals and objectives of the organization, you don't know the goal and objective of your particular role and how it fits into the overall aspects of the company. Those things are very important. While it could start with a job description, we have found that, especially if you're replacing a position with someone who's been in place for about 20 years, you may not have an accurate job description. What the job was when that person started and how it has evolved, you may not even know how to articulate that to someone who will be coming in as new talent to the organization. Between the job descriptions and the onboarding program, having one that's in place that clearly lays out goals and expectations to the new person 30 days, 60 days, 90 days, what does that all look like? Do we have a mentorship program? Is there someone where there's a new hire that comes in, do you align them with someone in the organization to help show them the ropes, including where the lunchroom is or whatever? Those things may sound like administrative processes, but they are important.
Gregg Profozich [00:33:49] Jeri, I think those are both great points. Thank you for sharing both about the hiring process and carrying through the reputation to there as well as the onboarding process. A couple of things. Lisa, I want to go back to something you said. We were talking about social media for a little while there, and it popped into my head. How many stars do we have? Are there reviews out there on social media on companies and their hiring part of the reputation piece—it all ties in—by a four-star employer or a one-star employer? I know on things like Indeed and Glassdoor I think you can see that. But how does a small manufacturer make sure that they're five stars?
Lisa Rawcliffe [00:34:17] Yeah, you definitely want to monitor the Internet, not just the social media that you own and manage. But you want to look at those other sites, because you are being rated, and you can respond to individual ratings that are out there. They do carry weight. I think we all recognize our own use of that for Yelp or Google reviews. It does have an influence on our decision-making. If I'm looking at A or B, eh, 4 1/2 stars versus 4.2; I'll go with 4 1/2. I would recommend that you actively keep track of those comment sites like Glassdoor, and Indeed, and even your LinkedIn feed. You may find comments in there that maybe you wish weren't in there. You want to be able to at least respond and acknowledge if there is a shortcoming but then look at a countermeasure or response to it that can show there's a correction or it's quite simply not true. But that power of that is far-reaching.
Gregg Profozich [00:35:12] Absolutely. Thank you. Jeri, anything to add?
Jeri Summer [00:35:15] I would agree. We've even seen this internally at CMTC when a candidate will say, "I saw this, this, and this about your company. What does that mean? Can you explain that to me?" Luckily, because our team pays close attention to that, we did have an appropriate response. Whether it was positive or negative, the question comes up. Being able to not only take a look at that but as a leadership or management team investigate what might be the root cause of that comment? Was it one disgruntled ex-employee, or is there a deep-seated issue that needs to be addressed? We try to encourage our clients to do that, but we certainly do it internally, as well.
Gregg Profozich [00:36:03] We were talking a little bit earlier, and I heard mention of company culture. Every company has a different culture. But for candidates from the generations that are in the larger pools of candidates nowadays, what are those characteristics that they're looking for in a culture that small manufacturers ought to know about?
Jeri Summer [00:36:20] I think some of the things that we've seen, particularly as Gen Zs, I’ll start there, come through the process, is they are forthcoming and very clearly spoken about their own personal professional goals. It's not unheard of to have them say, "Thank you. I'd be interested in this. When will be my next career opportunity? Would that be within six months? Would that be within a year?" Again, that can be seen as a generalization, but it is a group that is career-driven no matter what their career is, and they feel that it is their right... Different than the boomers, they feel that it's their right to drive that. Through life, they've been given those permissions, and they're very articulate about what they see their goals are. That's certainly one thing. I think for manufacturers who have different generations in leadership, they're going to need to start to become accustomed to that and be comfortable with that kind of approach, which might be more forthcoming than they may be accustomed to. On the boomer side, a lot of, again, maybe generalizations, but grateful to have a job. "I have to put food on the table, roof over my head. I might be unhappy, but I have a job. It's a good job, and I'm going to stay here for 10, 20 years." If our current manufacturers can all become more comfortable with looking at what the needs of each of the generations are. One of the stats that I saw for the Manufacturing Institute was that a big concern for Gen Zers is how do I pay for my education? That wasn't even on the radar screen for a boomer, for whatever reason. But right now, their number one concern is how do I pay for my education and then also benefits, very important. One of the things that we've seen as we interview candidates is that one of the questions we get asked is, "What is the company's position on diversity, equity, and inclusion?" For people to be surprised by that question, we hope that they can really come to the table to those candidates with an articulate message that says it's something that we care about, that we're invested in, that it's important to our organization. It brings diversity of ideas, better business decisions, creative thoughts across multiple cultures. Those things become very important. I think recognizing what's important to other people as well as how to meld all of what's important, how to make that kind of a diverse group of people focused on the ultimate goal, which is the business and organizational functions, can be very helpful in helping to shape the culture. One of the things that we've seen is that communication styles are different, as well, in terms of Gen Z, or millennials, and boomers, having a more open style of communication, being open to receiving as a manager direct feedback on what might be better for the company, recommendations for improved growth. It's going to be important for people to start to become comfortable with those kinds of styles and proactively address what the changes in that style might bring because that will open their eyes and cast a wider net for a talent pool.
Gregg Profozich [00:39:51] Thank you, Jeri. Lisa, anything to add in terms of culture?
Lisa Rawcliffe [00:39:54] Yeah. Just to piggyback on that, too, what we've seen a lot is with people in addition to... There's obviously salary or the compensation package, which does include benefits and a living wage that meets people's expectations for what they're able to bring to the table, but I would say even beyond that or in addition to that, a lot of people now also recognize that they want to be able to grow and learn. Some people I know have even changed companies because they felt that the company they were working for were too far behind in adopting even office technology, and they didn't want to lose the sharpening of their own saw to be attractive and, say, to be a viable offering in the workplace. They wanted to change companies because they didn't want to fall behind in their skill set in using technology. Even something as simple as basic office technology can be a hindrance to some. Making sure that a company is able to offer professional and personal growth, where that may not always be that someone gets advanced forward into a new title and a new position and the org chart every year, but if there can be rapid cycles of learning, and communication, and acknowledgment during a person's career, the more frequent that people can have those rapid cycles where they pursue and learn something new, it gets acknowledged and recognized, and we talk about how we're using that at work and where we want to go next, then we target our next cycle of learning and advancement of our professional and technical skills, and we continue that cycle repeatedly, that's an attractive notion for people because they know that they're constantly growing. It turns this into a very reciprocal relationship. We're not necessarily striving always in our communication to just focusing on how we can attract and retain the person, but the company also needs to have a real tangible benefit for having this person come on board. The more we're able to offer that professional and skills development for a person, it will be beneficial to both parties in a way that it secures the attention and the engagement of the employee. Likewise, the employer is getting the benefit of someone whose capacity to serve them has been magnified by that development. To Jeri's point about people having a concern about paying for their education, if they are pursuing education after high school, however, that's defined, we are seeing a lot of employers participating in tuition reimbursement, even if it's a partial level. Just the fact that that's recognized, that can be something that really helps a person come to your company and also stay with you. We've seen companies who have done that. They have retained those people that they made that investment with far longer than they had expected. One company started off that way. They got all the way through their bachelor's degree, and they're pursuing their master's degree. They're still with the organization with no intent to leave because they recognize the commitment the employer made. They did that based upon if you got an A, you got 80% of your tuition covered; if you got a B in the class, then you got a lesser amount. It was pay for performance; it wasn't just oh, you can get a C minus, and I'm still going to pay for your education. Everybody has some skin in the game. The person needs to perform well in school. The idea of that education coming back and serving the organization, because that is an investment from both parties—the time, and the effort, and the expense—all those things can really contribute towards attracting and retaining talent.
Gregg Profozich [00:43:17] Absolutely. I want to talk about retention here in just a moment, but you brought something up—the training and the old adage, what if we train our people and they leave? What if we don't and they stay? It's that whole conundrum that we end up in. But it sounds like the more you invest in a person and help train them, help them develop as a person, pay them respect to their human dignity, and they can continue striving these learning cycles you talked about. It doesn't have to be supervisor next year, and manager, and director, and then vice president in four years. That's not what we're talking about here. We're talking about increasing skills development. It sounds like it would help retain people. Is that what we're talking about?
Lisa Rawcliffe [00:43:52] Yeah. The world is an unstable place. It seems on every day it gets more and more unstable feeling. For people that need to work, which are the vast majority of us, our currency is not just our paycheck, but it's also our résumé and our skillset. We feel more confident and stable when we know we continually are developing skills that are more likely to keep us in a position where we're able to sustain what we need to survive. Employers recognizing that and making that investment is going to help sustain that relationship that's mutually beneficial for both.
Gregg Profozich [00:44:30] Got it. Jeri, anything to add there on retention?
Jeri Summer [00:44:32] Yeah. About every 8 in 10 people say they stay with their current employers because they enjoy the work, but 69% of them say they stay because they know that there's training and development opportunities for them within their organization. That whole workforce development piece is really critical, especially right now. Then of that, those same people, 65% of them, really can see that there's a career opportunity or career growth. Now, that doesn't always mean vertically, to everyone's point. We're not going to go from this position to CEO in the next five years, but it can expand horizontally. You gradually assume more responsibilities; you get a greater increase in salary. Perhaps if there's a mentorship program, you become the mentor to new people joining the organization. That visible opportunity of I can continue to improve, continue to expand my knowledge base is really important.
Lisa Rawcliffe [00:45:33] Yeah. As far as retention, we see when there is a more consistent level of quality communication between people and their manager or their supervisor and that is a reciprocal two-way communication, the more frequently that conversation is had about how are we doing—how are we doing for each other, how are you doing for me, how am I doing for you—the better that relationship is, it's stronger, you can address things that do come up that were unexpected, unplanned, and you can work through them rather than let them fester. The notion of having just an annual performance review is really not showing to be as adequate as it used to be before. People want to know more frequently how am I doing, referring back to that concept of the feeling of instability in the world. When we are able to have more frequent communication, that's better. That doesn't mean you have to have an hour-long conversation. Because we all have a limited capacity of time, and we have many direct reports, that can really add up. But making a concerted and solid effort to have a connection and have that opportunity to make sure that we're communicating effectively as frequently as possible so that no one is left without knowledge of if their performance is not meeting standards, or if it's exceeding standards and I have not been recognized, we don't want there to be long periods of time in either one of those conditions. Likewise, for the person who wants to communicate with their boss, that is a reciprocal two-way relationship. Their manager may need to know something that's not meeting expectations, and they can work through that. There are many statistics that reinforce it. When people leave jobs, they're really leaving their direct manager more often than they're leaving the whole company.
Jeri Summer [00:47:15] I'd like to add one thing and that is, when we speak with manufacturers who say why people are leaving, one of the first questions we ask them is, "Do you practice regular recognition?" To Lisa's point, to wait a year to find out how I'm doing is not adequate enough any longer. It's an antiquated approach to am I valued, am I appreciated, what do I need to do to improve?
Gregg Profozich [00:47:41] It sounds like, from what both of you are saying, that if this regular recognition is happening, the annual review can still happen, but there are no surprises. It's a continuation and a formalization of an ongoing conversation that's been happening organically and on a regular basis throughout the course of the entire year since the last formal review. Sit down, sign the page type of thing, but there are no surprises, there are no watch-outs. In that environment, it's not a fair thing to do, then. Let's talk a little bit about workforce development. Lisa, why don't you walk us through? Give us a definition of what it is, and then we can talk about why it's so important.
Lisa Rawcliffe [00:48:11] Well, workforce development—the way I define it, at least—is a process of which we're looking at how we're managing our resources of people. There's lots of things as an organization we can do. We can buy more equipment; we can get more space; we can relocate our company. But workforce development is that concerted effort towards developing the skills and capability of people. That can happen at the employer level, at the community level, at the education level, and at the family level. Workforce development can really touch all of those interfaces because it's the development of people and their capabilities to do work.
Gregg Profozich [00:48:43] Jeri, anything to add there?
Jeri Summer [00:48:45] Yeah. I think of late we've really seen, hopefully, a greater focus on this, because it really will address... When applied appropriately, it will address the needs of not only the current workforce but also your future talent. How do we get to that future talent if we can't find it? We're going to need to create it. I know that's always difficult for a manufacturer because they're always focused on we have a product to produce to get out the door. It's like, "Where do I find the time and the financial support to incorporate that?" But as we said earlier, if we don't do it now, who will there be left to help us get a product out the door and to remain competitive, to maintain a competitive edge? It's not just current but future workforce and maintaining that competitive edge, as well. Very important.
Gregg Profozich [00:49:37] Okay. Thank you. We've covered an awful lot of ground today. Is there anything else you feel is important to cover before we wrap up?
Lisa Rawcliffe [00:49:44] I would strongly encourage manufacturers to take some ownership in that workforce development space in advocating for your needs and making yourself visible in your community. Interact with your educational partners. That can start all the way at the elementary or junior high school level and, at the very least, the high school level because that is your emerging workforce. When you look at the statistics of the number of students that pursue a four-year degree after high school and those that don't, there are a wide number of young people that are emerging that are ready to go immediately into the workforce. They're highly valuable, and there's a lot that we can offer. Then likewise, the students that are pursuing a community college two-year degree, interacting with our community colleges and inviting yourself to their discussions around programming and educational programs. Once that relationship is established, many community colleges will form an annual consortium of the manufacturers in the community and have a discussion. What are your needs? How are they changing? You want to be present in those meetings, in those discussions, and represent your own company with your own voice and be able to make yourself heard. Then, of course, at the more advanced education, at the four-year degree or even postgraduate work, make yourself visible in those organizations to let them know that you are a viable employer looking to hire people from graduates from those programs. Also, advocate for the changing needs that you're seeing in industry. A lot of educational partners are eager to know where we're heading so that they can be in pace with what your needs are. Everything is changing quickly. The adoption and use of technology continues to accelerate. The educational partners, those that are responsible partners, want to be ahead of that curve in preparing a workforce for you. The only way they're going to know is if you advocate for yourself. But also advocating in your community. When you have the opportunity to participate in the National Manufacturing Day in October, open up your plant doors. Open them up to the community for an in-person tour, if you need to. At least have a virtual tour, and give a presence to the world about what manufacturing looks like today. It's an exciting world. It's a rewarding career. If there's anything that anybody likes to do, we have a home for you in manufacturing. We want to let the world know that and what that looks like, and feels like, sounds like, acts like, and what kind of a lifestyle is able to be provided by working in manufacturing. Most people would be astounded if they understood what's at stake. On the flip side, if we don't do this, we're going to continue to struggle. We have many organizations right now that are telling us that they're turning down opportunities to bring growth into their organizations because they're limited by workforce. Not all of these steps may have an immediate impact. Some of these will have an immediate impact. But take every step in this direction. Try to advocate for yourself and your educational partners in your communities and any opportunity where you can put the presence, and the reputation, and the visibility of your company forward for people to get to know you.
Gregg Profozich [00:52:45] Lisa, thank you so much. I love your enthusiasm and your passion about it. I can't disagree with anything you're saying there. Jeri, anything to add?
Jeri Summer [00:52:51] No. I would just say in the advocacy for yourself and in the community, make sure that you're incorporating diverse groups and individuals because that could be a whole new avenue for you to help to identify new talent but also to bring light to the subject of what's in it as far as manufacturing is concerned. That's certainly one thing. Another thing is we encourage people to get involved in any STEM program so that we can start to also advance women in manufacturing, as well. All good information. Thank you.
Gregg Profozich [00:53:26] Jeri, Lisa, thank you so much. You shared an amazing amount of information. I'm going to try to do a quick summary here, if I can, of some high-level concepts that I thought were particularly important. We started out our conversation talking about the changes in the workforce, the baby boomer generation all the way up through Generation X, Generation Y, Generation Z, et cetera, and some of those shifts that are happening. We also covered from there the changes in the labor market and some of the manufacturing stigmas that exist and the need for people to understand that manufacturing is not what it used to be. It's a very clean, high-tech and very rewarding career that pays well and has a lot of stability. We talked about turnover and about some of the costs of turnover and why retention and getting the right people in and retaining them is so important. And to getting the right people in, we talked a little bit about how to attract talent, the importance of creativity, being on the platforms where your candidates are likely to be, and being involved in your community, and building up some credibility and a reputation, and then really using that reputation and making sure it carries all the way through, how you're seeing your image and perception of your company, your culture, your organization, even how you bring people on through the hiring process and their onboarding process. Make sure that's all consistent and all speaks to the kind of things that you want to be saying about yourself. Then we closed out on workforce development, the process of how a company develops the skills and capabilities of their people. That can be at the company level, at the individual level, at the community level, at the educational institution level. I thought it was a really key point to advocate for your needs as a small manufacturer. What is the talent you need? What are the skills that you're looking for? How is technology changing, and if you can get connected in with your community and get connected in with your educational institutions and be an advocate for that, help influence curriculum and help set curriculum for the future? Those are some really important and actionable things you can do to start building that pipeline and building your reputation as an organization that's seen as a premier employer within your community. Well, thank you very much. Lisa, Jeri, it was great to have you here today. Thank you for joining me and for sharing your perspectives, your insights, and your expertise with me and with our listeners.
Lisa Rawcliffe [00:55:26] Thank you.
Jeri Summer [00:55:27] Thanks so much, Gregg.
Gregg Profozich [00:55:28] To our listeners, thank you for joining me for this conversation with Lisa Rawcliffe and Jeri Summer in discussing recruiting and retaining talent. Have a great day. Stay safe and healthy. Thank you for listening to Shifting Gears, a podcast from CMTC. If you enjoyed this episode, please share it with others and post it on your social media platforms. You can subscribe to our podcasts on Apple Podcasts, Spotify, or your preferred podcast directory. For more information on our topic, please visit www.cmtc.com/shiftinggears. CMTC is a private nonprofit organization that provides technical assistance, workforce development, and consulting services to small and medium-sized manufacturers throughout the state of California. CMTC's mission is to serve as a trusted adviser providing solutions that increase the productivity and competitiveness of California's manufacturers. CMTC operates under a cooperative agreement for the state of California with the Hollings Manufacturing Extension Partnership Program, MEP, at the National Institute of Standards and Technology within the Department of Commerce. For more information about CMTC, please visit www.cmtc.com. For more information about the MEP National Network or to find your local MEP center, visit www.nist.gov/mep.