Monday, May 12, 2014

More on Employees, Employment, and Life

Last time, we were considering the state of the modern wood products company, with respect to recruiting and keeping its employees. I hinted at the fact that higher education is actually a competitor for your best future employees.

At right is an interesting infographic from the video "Timber! There's a Gold Mine Out There" produced by the members of the Keystone Wood Products Association, a wood industry association here in Pennsylvania. The video, which is intended for viewing by middle-school and high-school students, begins with an educational story about the environmental value of sustainably-managed forests, and then goes on to provide the young folks with a look at the wood products industry, its role in harvesting the forest and converting the wood to value-added products, and the types of careers to be had. The infographic is especially interesting for a little-discussed issue in many high schools...in this case, that 85% of all the jobs in this particular industry can be had with simply a high-school education and on-the-job training. In other words, without the investment of time and money in higher education.

Recognizing this, the members of the KWPA decided to get into the education business themselves, and produced the following video. Their intent is to show young folks that careers in the industry are green, interesting, and available to all, not just those with higher education. Which is not to say they're against higher education...in fact, they discuss careers specifically requiring post-high school education. But they also send the message that a great and fulfilling career can also be attained simply by succeeding in high school and working hard on the job.



This message may seem a little sacrilegious to two or three generations of folks who were raised to think that a college degree is required to succeed in today's America. But I can tell you from personal experience, it just isn't the truth anymore, and probably never was. Sure, in a whole bunch of professions, higher education is an absolute necessity. But because the market balance of labor has shifted and technology has greatly improved, blue-collar jobs in most cases are now just as safe, secure, and profitable as most white-collar jobs. And for those who like to work with their hands and be a part of seeing things made, they can be tremendously rewarding. Not everyone was created to be chained to a desk.

So the first message to companies looking to hire future superstars is, get out there and develop your own educational message, and compete for those young hearts and minds. Spend more time involved in local school and civic activities...keep your company name out there, and make yourself and your company accessible to young folks who might just have that spark of interest that, left unfanned, will be doused by peer pressure to join the lemmings on their march to the university. You'd be surprised what a simple message in the high-school newspaper or on the high-school baseball team's outfield fence will yield.

But getting them is really the easy part. Keeping them is vastly more important, and difficult.

Do you know your workforce? Really? What motivates those who stay to stay, and those who leave to leave? What makes some employees grow into great employees with twenty years of experience, and others to linger around with one year of experience, twenty times?

The time of most human resource managers (or owners, in smaller businesses) are tied up with making sure employees are legal, safe, minimally trained, and paid. There just isn't much time for personnel development beyond that, with orders and regulatory deadlines to meet. But employee turnover is a primary reason! If you could retain your best folks, and gradually weed out the slackers (after getting to the root cause of their poor performance), then you could spend more time improving the ongoing improvement of your workforce...which is the real key to the competitiveness and success of your business.

One thing I sometimes suggest to companies is to look at their employee behaviors statistically. When you ask companies why employees leave, they will rattle of a list of reasons, mostly faults inherent in the employees themselves. But there are underlying causes that will help you improve your company, if you examine them analytically.

For example, look at the chart below. It shows a company history of employee terminations categorized by the numbers of years of employment at termination.


From this, we see some results that may be familiar to you. A high number of employees terminated in the first year of employment, and an even higher number of employees staying with the company for more than twenty years. Sounds like a typical company, and one that offers a fairly stable work environment.

But it offers a few pieces of data that provide areas of investigation. First, let's look at the first year terminations. Naturally, a few of them just didn't work out...they were unreliable, they dislike the work, they moved, or got thrown in jail. But what of the others...the ones who were working out great, and then just surprised you by taking their last paycheck and quitting on the spot?

I once had a young man march into my office and quit in his seventh month on the job. I was flabbergasted. I had recruited him out of a college half a country away, and he was already one of my favorite employees. He was hard-working, and I frequently complemented the quality of his work. I could tell that he would someday be one of the company's best employees.

But he gave as his reason for his leaving...that I disrespected his work. I thought I was hearing him wrong. Yes, yes, it was true...he was a degreed wood scientist and I simply didn't recognized the full contribution he brought to the research team. Then, he added, he and his wife really didn't like East Texas...the slow service in the local restaurants drove them crazy.

I didn't realize the validity of his second point until I moved to the Northwest a few years later. Yes, he had a point. East Texas restaurants are a little slow. But then again, everything in East Texas is a little slow. There just isn't much of a need to be in a hurry there. Most of us think that part of its charm. This fellow (and his wife, he made a point of saying) obviously didn't find it so charming.

But I have a suspicion that if I had recognized the first point, that of perceived disrespect, and taken appropriate steps to help the fellow feel a little better about his job and contribution, the fellow and his wife could have learned to slow down a little with the rest of us, and he would have contributed to our efforts for a lot longer that seven months. Which would have made us a better team.

Now, back to our termination graph above. What of that increase in terminations in the fifth and sixth years of employment? The natural assumption is that they grew in their job, became more highly qualified, and turned that experience into a new opportunity with another company. But did they necessarily have to leave? Or did the company environment make that the easiest path for them to take?

The easiest out for companies to take is that the competition paid them more than they could afford to keep them. But paradoxically, these are often the same companies that maintain that rate of pay isn't everything in a job. And they would be right. But while it may not be everything, it certainly is a primary factor. The fact is, we have to become more creative with what is sometimes called "at-risk" pay, compensation in the forms of bonuses, profit-sharing, perks, etc.

Most companies have at-risk incentives for at least higher-level white collar positions in the company. But think about it...given their training and expectations of performance in their jobs, are white-collar employees any more in need of incentivization than other employees? And couldn't incentivization produce just as good results in the blue-collar positions as they do elsewhere? View it from another perspective...couldn't poor attitudes on the shop floor hurt the company just as badly as poor attitudes in the front office?

When you really think about well-trained employees, usually your best, leaving for another company for a 10-20% increase in pay, and then think of the impact on the operation of losing that person, you may realize that an increase in pay, especially if it could be made as incentivized pay, would be cheap indeed.

Finally, what about all those employees that stayed on for 20+ years? Good for them. But have you really analyzed why they stayed on while others didn't? What made them special? Try this - break them into two groups, one of those that you think of as good, productive, employees, and the other as those who stayed on because they probably had to.  Which group is larger? If it is the second, your company environment is rewarding the wrong things.

I'll leave you with one last story. One of my first assignments out of college was to work with a team of managers and supervisors of a wet-process fiberboard plant. It was a big, hot, sweaty, dark place with leaky pipes and steam shooting everywhere. I loved that place.

One day,  I called a meeting to outline the components of a continuous improvement effort I thought would help motivate employees and improve efficiency of the operation.  It was going badly. At the time, their production numbers were down due to process problems, they were behind on orders, and upper management was pushing hard. And now they had to listen to a dumb college boy tell them how to improve the place. They were not in good moods, and their silence at my suggestions showed it.

I was working hard to get the enthusiasm in the room turned up a little. But I believed in what I was saying...that the plant really could become a different kind of place to work. That it could be fun to work there again. And then, in a final bit of over-the-top enthusiasm, I blurted out, that we could turn that plant into a place that we would be proud for our children and our grandchildren to work in.

For a second, there was dead silence in the room. They, as they looked from me to each other...they simultaneously burst out into the loudest, heartiest laughter that plant has probably ever heard. These guys were killing themselves precisely so that their kids and grandkids could stay away from that hot, smelly, steam-bath. My suggestion seemed so preposterous, it was just hilarious.

I have to admit, I laughed right along with them. In the moment, it was really funny.

But they were wrong in the root of their laughter. Even if they couldn't turn that old plant into a place where they wanted their kids to work, they would have been far better off for trying. And if they had, and the company had really supported their efforts, the last thirty years around there might have been a lot better, and more profitable.

After all, as the saying goes, it's not the destination that matters, but the journey.




3 comments:

Anonymous said...

It would be neat to know if the termination trends by years of service have changed over the past forty years in the wood industry. i.e. 1980, 1990, 2000, 2010.

We talk about the good old days but did they really exist. It seemed like people stayed with one job for life in the 1960's and 1970's but was that reality in the wood business?

Personally, I think the turnover trends in staffing changed when employees went from being Personnel to being Human Resources. That happened in the 1980's. Human Resources has the connotation of something expendable like material resources, natural resources, etc.

Also I would like to see termination trends as a function of awarded MBA degrees whose programs teach that people are expendable and the only thing that matters is reduced cost. Maybe that is what is needed to be globally competitive these days but makes employment very brutal.

Loyalty is a two way street. Like any relationship there should be some give and take on both sides of the management/labor line.

I think the recession gave leverage to management and they were quick to take advantage of instability of the job market. That may create some major job hopping when the economy turns to the favor of labor.

It should be interesting.

Thanks for the continued article.

Anonymous said...

Well said! Thank you for these comments and reminders to industry as to what we do have to offer other than just money!! I appreciate the use of the KWPA video too! Even though I have that video and have viewed it and hand it out all the time, I did not understand that statistic about training requirements until your blog! Thank you!!

Jerry Finch said...

Chuck,
As a 25 year teacher of Wood Manufacturing Technology at Fox Valley Technical College, I can say with certainty that the holy grail of a 4-yr college degree is, and has long been, unnecessary for the majority of jobs in this industry.

That said, the statistic in your graphic showing HS and OJT training as the only education required for today's jobs is misleading. If the worker is content to stay at that level, then it is true. But, if they want to advance in the field, modern woodworking technology requires additional skills, many of which are costly and time-consumingfor companies to supply as OJT.

The answer, I think, is the 1-year, industrial level technical college program. (Wis has 3; Penn Tech used have a good program, now gone??), The program at FVTC covers the gamut from hand tools to CNC programming, AutoCAD and production estimating, case and furniture manufacturing, veneers, moulding and millwork. Our students are in the shop 35 hrs a week for 45 weeks and graduate with skills that allow them to be productive from their first day on the job. Our placement over the last 30 years is above 90%, even during the recession. The advantage to our graduates is the acquisition of skills that would take years of OTJ to learn, and without the cost of 4 years of college to pay for. They seldom stay in the entry-level jobs for very long.

I , like you, worked in the industry before my 25 years at FVTC and my experience with employee turnover is that respect and recognition of workers accomplishment goes a very long way to make up for the reality of lower wages in this industry. I worked at companies that paid higher wages, but treated their workers like machines. The resulting high turnover is why they had to pay more. I have also worked at companies that had low turnover and high worker loyalty, because everyone felt appreciated. They also had high productivity, and I believe it was for the same reasons. I also know some companies that manage to do both: By making their employees feel appreciated, they have low turnover and high quality production, which allows them to pay higher wages than their competition. In one case, the employees voted to give up their long-standing union affiliation because they were getting a better deal and more respect from their employer.

Having made the arguments you are making for the last 30 years, I am glad that the internet is allowing you to get a wider audience.
Keep it up.

Jerry Finch
New London, WI