Top Causes of Employee Turnover

The future of manufacturing is up in the air. Labor shortages, emerging technologies, and increasing demand are some of the manufacturers' many challenges. Employers are scrambling to find skilled workers and generate profit despite the massive supply chain disruption in a world still reeling from the COVID-19 pandemic.

The employees are feeling the effects. According to the Bureau of Labor Statistics, the average turnover rate for manufacturing companies in 2021 was 39.9%. Employees  are becoming increasingly frustrated with their employers for many reasons, not just how they respond to these challenges. 

Turnover is a huge issue for employers, especially when they don’t appreciate how costly and disruptive turnover really is.

On average, employers spend about $4,100 on onboarding training per person. And when they lose that person, they spend about 1.5 to 2 times their salary to replace them. With high turnover rates, it’s no wonder companies are hemorrhaging money during the labor shortage.

Lowering the turnover rate is key for saving your company time and money and, most importantly, retaining quality employees. After decades of HR consulting, I’ve gotten a good sense of manufacturer’s leading causes of turnover. It’s usually a mix of things, but I’ve narrowed down the normal things that make employees quit.

If you’re experiencing high turnover rates, you might be mishandling your relationship with your employees. Luckily, my list of turnover causes will help you pinpoint exactly where you’ve gone wrong and restore your work environment to a place your employees will want to stay in. There are probably fifty different causes for turnover, but the six I listed below are the most common I’ve seen while consulting HR teams. 

Top Causes of Manufacturing Turnover

1. Poor communication

Poor communication is the root of all turnover issues, especially the causes you’ll see in the rest of this list. Poor communication ruins everything—projects become disorganized, deadlines are missed, and your employees are left confused and frustrated because they aren’t on the same page as you.

Poor communication also drives away valuable employees because they simply don’t know what you can offer them. If employees don’t know about their advancement opportunities, they’ll think they don’t exist. In their minds, this transforms the position they’re working in into a dead-end one, and they’ll have no problem going to another company that provides for them. 

Creating effective communication means putting forth the effort to establish an open channel between all of your employees. You can do this by encouraging two-way conversations, regular feedback, and transparency from every level of your organization. Explain advancement opportunities, benefits, and other key information thoroughly, so your employees know everything available to them.

Consider using a software platform to streamline your entire company’s communications into one place so information doesn’t get lost or disorganized and the team knows exactly how to contact each other. 

When you meet with them, keep your meetings timely and straightforward. Dumping too much information on your employees will overwhelm and bore them, which are major driving forces behind their resignations.

Communicate significant information regularly. Make sure your employees hear from you often but don’t send unnecessary or irrelevant information, or they won’t be as likely to pay attention to you the next time you communicate with them.

Lastly, keep communications interesting by presenting your employees with information in a variety of ways. Schedule a casual meeting online or in-person to discuss it. Reserve time for their voices to be heard. Use images, graphs, and figures to relay information more clearly. Be mindful of your body language and tone of voice. Maintain eye contact and engage your employees when you can.

2. Employees don’t feel valued or appreciated.

Time and time again, employees leave their jobs because they don’t feel appreciated by their employers. Even if they enjoy the work itself, they don’t feel happy coming in because they don’t feel like they’re important.

Valuing your employees is crucial. The rate of employees leaving their jobs because they felt unappreciated skyrocketed from 51% in 2012 to 66% today. Clearly, people no longer tolerate jobs that don’t recognize their efforts or appreciate their unique value.

You will reap significant rewards when you show your employees how appreciative you are of them. Employees that feel recognized for their work are 2.7 times more likely to be highly engaged in the company.

Besides reducing employee turnover, valuing and recognizing your employees’ contributions improves company culture, increases productivity, and keeps your valued employees around longer.

You can achieve employee satisfaction by:

• Being intentional about your employee engagement by asking for their thoughts and opinions
• Celebrating milestones, progress, and any employee worthy of praise
• Saying thank you

They may seem like small things, but simply asking for someone’s thoughts or saying thank you goes a long way. Let your employees know that you appreciate their hard work and dedication, and you’ll keep them around for much longer.

3. Weak management training

According to a study by SHRM, roughly 36% of employees say that their managers don’t know how to lead a team. The resulting turnover has drained over $223 billion in the past five years.

These unprepared managers are all too common in the business world because organizations aren’t doing enough management training.

Employers select managers by promoting from within, and, by assuming the transition will be natural, they fail to prepare them for the difficult and vastly different tasks involved when you move to management. 

Lack of management training also wreaks havoc on your team by creating distrustful employees. When they don’t see managers as good leaders, they feel no loyalty toward them and are much more likely to quit.

Managers might create an unsafe work environment because they weren’t properly trained on discrimination and harassment. This can lead to lawsuits on top of dissatisfied employees who feel uncomfortable at their jobs. 

The bottom line? Invest in your managers. The better they’re trained, the smoother the operation. Great leaders promote cooperation and motivation in their employees. Take time to train them.

Make sure to cover everything in your training program. This includes teaching the management of:

• Performance
• Change
• Goal Setting
• Cultural communications
• Discrimination and harassment

4. Loss of a work/life balance

When employees are overworked, the lines blur between work and personal life. This is especially true for remote employees.

People who spend too much time at work will suffer in their personal lives. Not only will their relationships suffer, but so will their health. In fact, the World Health Organization reported that approximately 750,000 people die annually from heart disease or stroke due to working long hours–55 or more.

If your employees are overworked, not surprisingly, 46% of human resource leaders say that burnout is crippling workforce retention.

Are you giving your employees the opportunity to have a life outside of work? Are your employees burnt out from extensive hours and workloads? 

These are questions you should ask yourself every so often to make sure your employees are maintaining a work/life balance.

When you manage your employees, accentuate your commitment to their well-being. Schedule one-on-one meetings. Conduct stay interviews. Make room for flexible scheduling and make time off mandatory.

When your employees can balance their lives, it reflects on their attitude and performance. They’ll feel happier at work and stick around for a longer time.

5. The existence or assumption of favoritism

While favoritism isn’t always present, sometimes employees can interpret actions and attitudes as unfair. Perception is important.

A common mistake by managers that looks like favoritism is being friends with employees. When a manager is viewed as a friend, other employees who don’t feel as close to them will think the manager likes other people more than them and therefore treat them more favorably. 

This buddy-buddy relationship may seem like a great way to connect with your employees, but too much of it can be perceived as unfair. 

Therefore, a manager must take on the challenge of maintaining a balance between authoritativeness and friendliness, so that their employees don’t think of them as unapproachable or presumptuous.

To manage this balance, focus on:

• Establishing clear boundaries with your employees
• Honesty and transparency
• Creating guidelines for managing workplace conflict

When you treat everyone the same way, and that way isn’t overly stoic or chummy, your employees will rely on and stay loyal to your fair leadership. Ultimately, turnover will decrease.

6. Benefits aren’t what employees actually need or want

Since 2018, companies have spent more than $20,000 per year per employee on benefits. It’s a tremendously costly expense for businesses, but it can also be a reason why their turnover rate is so high.

If you’re going to be spending that much on benefits, make sure they’re good enough to keep your team happy. 

When benefits are the reason for high turnover, it’s because companies aren’t aware of what their employees really need or want. 

Paid time off, for example, is extremely high value and is a requirement for a good benefits package. Other attractive benefits include wellness programs, flexible schedules, and opportunities to work on special projects in their company or community.

A good benefits package is also part of making your team feel valued and appreciated, which is key for retention. An excellent way to do this is by offering customized benefits that are tailored to their unique needs.

Offering flexible benefits and allowing your team to pick and choose them is a surefire way to ensure their commitment to your company. No matter how their life circumstances change, your team will feel confident that you’ll adapt with them and support them through it all.

Reevaluating Your Strategy

If you’re ready to solve your employee turnover problem, you’ve come to the right place.

Schedule a discovery call with me if you’ve recognized your need for improvement and are ready to do something about it. We’ll get a sense of the magnitude of your turnover issue and your readiness to deal with it. Then, we’ll roll up our sleeves and get to work modifying your tactics to lower the costly turnovers you’re experiencing.

We will work together to repair your turnover by establishing a safe, happy, and productive work environment that keeps valuable employees around for much longer.