If your company is having trouble recruiting and retaining productive employees, join the club. Take the case of one West Coast pallet company. “We are having way too many employees that start and only last 1-2 days, or in some cases, 1-2 hours…it’s really frustrating,” the manager told Pallet Enterprise.
“I don’t know if we are the ones to give any best practices or tips, but we certainly have challenges and frustrations!” he continued. “One thing is for sure…we are going to do all that we can to address the problem…it will change because it has to change. We are wasting way too much time and money with our current method.”
To state the obvious, the pallet sector competes with industry at large for employees. For the sixth consecutive time, the latest National Association of Manufacturers (NAM) survey has identified worker attraction and retention as the top issue facing manufacturers across the country. NAM notes that the labor issue has become even worse due to an improved economy and a nearly 50-year low unemployment rate.
Generally speaking, the turnover of hourly employees can be as much as 50% in the first four months, according to the Society for Human Resource Management (SHRM). Meanwhile, a new report from Gallup states that the high turnover rate doesn’t just apply to heavy work or “bad” conditions. Even “highly respected” brands suffer from new employees who leave in high numbers, it notes.
The Onboarding and Retention Challenge
Employee turnover creates needless cost, hampers productivity and can become a distraction from other business objectives. A lot of people don’t last the first few months on the job. “Our biggest opportunity from a people standpoint is retaining those employees who quit within the first 90 days, which is when the vast majority of our turnover occurs,” offered Mike Hachtman, president of Relogistics, a leading provider of reusable transport packaging and pallet management services.
“Onboarding and retention are inexorably linked,” he continued. “The absolute cost, administrative effort, and productivity impact that high turnover drives are why this is a critical issue facing our company today.”
According to Megan Smith, CEO of Symbia Logistics, the biggest challenges surrounding onboarding for the Edwards, Colorado-based third-party logistics company include language barriers, as well as “wrapping new hires into the company culture” and capturing enough of “the right information”, soft facts that will help them better connect with new employees such as shirt size, favorite sports team, favorite food, etc.
Symbia offers a variety of services, including digital storefront integration, order fulfillment, warehousing and industrial kitting. It also manages 18 dedicated service centers for CHEP.
Begin Onboarding During the Job Interview, Take a Longer View of the Process
“Most companies look at onboarding as something that’s done in the first day or two, maybe the first couple of weeks at best,” Hachtman said. “In reality, onboarding is at minimum a 90+ day process of learning what is required, how to do what is required, and why it is required, all the while being introduced and then indoctrinated into the company culture.” He explained that Relogistics site managers walk employment candidates through the basics of the job they are applying for allowing them to watch incumbent employees perform the same duties.
If, after seeing and experiencing the work first-hand, the person is still interested, then the more formal selection process commences. “The ‘traditional’ onboarding (orientation) is performed online in our human resources information service, including the basics, such as I-9, W-4, and other required legal forms, but also new hire safety training and related measures of understanding,” Hachtman explained.
Relogistics employees then enter a 90-day probationary period, during which there are training and productivity milestones that must be met. Site managers follow a prescribed sequence of touchpoints that measure and record how a new hire is doing at each milestone. Pay increases are also tied to various parts of the probationary period, depending upon the job.
HR Technology Can Help with the Organization of Records, Visibility, and Compliance
Larger companies are increasingly embracing human resources technology to help ease the burden of administration and compliance. According to Michael Steen, a regional manager at Relogistics, their digital approach offers a number of benefits such as convenience and ease of organizing records, as well as the ability to perform remote auditing for OSHA and Fair Labor Standards Act (FLSA) compliance.
For its part, Symbia Logistics has automated as much of the orientation and onboarding process as possible through its Payroll provider, PayCom. “This payroll platform has allowed us to create cross-functional teams that support HR activities,” said Smith. “For example, the office manager only has to go to one place to hire, terminate, run payroll, post job listings to the web, etc.”
Smith added, “I have personally witnessed Symbia go from a full-fledged paper company to putting as much of our information into the servers as possible. This is a major part of our plan moving forward which will include the creation of Symbia Academy and the SyMBiA (Symbia MBA). These learning platforms will be focused on training, employee engagement and career advancement.”
Technology helps reduce the burden of employee documentation, Relogistics’ Hachtman emphasized. “Almost all paper has been eliminated from the process, and is much less administratively burdensome.
“We recently changed payroll/HRIS providers to take advantage of centralizing how we both collect and analyze our people data, and drive decision making as related to training needs,” he continued. The new provider replaced solutions from nine different vendors which each addressed different aspects of human resources management. “Now we have one provider that does all of this for us, captures all of the data, and gives us a better line of sight into how it all interrelates.”
One benefit of the new solution is that it is fairly simple to use, and it allows employees to use their smartphone to access their personal information. “When an employee can take control of their own personal data through it, they feel more empowered and are more apt to be engaged with what’s going on at work,” Hachtman noted.
Kristin Kopp, communications director at Relogistics, spearheaded the implementation of the company’s iCIMS software roll out, which is an online tool dedicated to recruitment and onboarding, along with Michael Steen (quoted above, also of Relogistics). She noted that while the primary objective was to eliminate the time commitment to paper and to streamline processes for the hiring managers, she saw the implementation as an opportunity to enhance the Relogistics brand. “Having just rebranded the company, I wanted us to communicate to potential candidates, hire and onboard in a way that really reflected our brand — with integrity and professionalism,” she stated.
Leadership Development and Retention
Relogistics also uses an online provider to support its leadership development efforts, including frontline supervisors, who have the most direct contact with hourly employees. Small study groups of around four participants discuss and apply content on a biweekly basis. Success stories for each group are shared periodically throughout the company to keep everyone motivated.
“We launched that program last summer with our site managers and senior leadership team, and we are expanding it in 2019 to include our Shift Lead/Supervisor cohort, because that’s where the biggest impact to retention is right now,” Hachtman said “Our goal with this group is getting them to the point where they are able to not just show how the job is done, but also explain why it needs to be done and done well.”
“The Why.” Giving Meaning to Work
The importance of explaining the “why” of work is becoming increasingly recognized. It is commonly stressed in business articles that workers, particularly Millennials, are more likely to stick with jobs that have a purpose or meaning.
“It is my goal to become a place where people want to work, where associates feel valued and like they’re part of an amazing team,” Smith said. “Pallet building and repair is one of the most labor-intensive occupations in our country. To retain associates at that level, it is critical that they feel like they’re cared for in the beginning. By putting the employee in the center of your business strategy, a company can gain the loyalty and retention that is critical in an environment such as pallet management.”
“By personifying the pallet, the box, the shipping container,” Smith continued, “we can showcase how critical the supply chain is to our associates and prove that they are a part of something huge! Each person working the line is directly responsible for putting commodities on the grocery shelves. All the groceries in your local area, such as King Soopers, Safeway, Publix, Meijers were delivered on pallets. Symbia’s associates, themselves, had a hand in placing food on the tables of America.”
Clear Expectations
Hachtman emphasized the importance of communicating that hard work can result in increased opportunity at Relogistics. The trick, he stated, is to explain “Why we do what we do, the impact the work has in the larger scheme of what our customers are trying to achieve, and then communicating when hard work and engagement by their peers are being rewarded. Recognition, generally, plays a major role in this.”
“If we treat our company like a revolving door, others will do the same,” Smith said. “Evaluating pay structure in all regions is critical, seeking out A-Players and creating opportunities for advancement is all a part of our short-term plan to building a stronger team at Symbia. The higher our retention rates get, the better our bottom line looks.”
“All of these topics are underpinned by the idea of expectations,” Hachtman concluded. “It’s an old idea that people rise to the level of their leader’s expectations. If we don’t expect our people to get anything out of training, they won’t have any perspective as to why they should work hard or be engaged. If we start with the right expectations, deliver opportunities to grow, and communicate how it all works together before day one, the retention issue could resolve itself.”
New Employees Need Answers to Five Questions for Onboarding to Be Exceptional
Gallop, in Creating an Exceptional Onboarding Journey for New Employees, its 2019 report states that when five key employee questions are addressed, the result is an exceptional onboarding experience, which in turn, leads to higher employee retention and engagement.
1) What do we believe in around here?” The company’s beliefs, values, mission, and purpose all matter. Employees who strongly agree that they have a good understanding of “how we do things at this organization,” are 4.7 times more likely to strongly agree their onboarding process was exceptional.
2) “What are my strengths?” People like to do what they are good at, and efforts by employers to discover employee strengths and put them to work can go a long way toward relationship building. Employees who strongly agree they can utilize their strengths every day are 3.5 times more likely to strongly agree that their onboarding was exceptional.
3) “What is my role?” Employees are not always clear about what is expected. Employees who strongly agree they are confident in performing their job are 1.8 times more likely to strongly agree their onboarding process was exceptional.
4) “Who are my partners?” The development of trust and collaboration among co-workers makes a positive difference. When employees strongly agree they have partners they can always rely on at work, they are 1.9 times more likely to strongly agree their onboarding process was exceptional.
5) “What does my future here look like?” Imagine a new employee who arrives with high expectations, but soon is lost in the day to day grind of the job with seemingly no way out. To maintain positive feelings, a career path for future professional development must be present during the onboarding process. Employees who strongly agree they have a clear plan for their professional development are 3.5 times more likely to strongly agree that their onboarding process was exceptional.
Connecting with Those Still Mysterious Millennials and Zs
Many pallet companies still struggle with how to best onboard the new generation of millennial (Born 1981-1995) and Generation Z (1996 and 2010) employees. Gone are the days when it was enough to provide steady employment and a safe workplace. Generally speaking, there are a handful of areas where employee expectations are more demanding. As Sue Edwards, founder of Development by Design, notes in a recent article:
• They expect to experience “meaning” in their work.
• They want to know how they can get ahead…from the beginning.
• They have expectations about working in a team environment
• They’re constantly looking for feedback.
• Regardless of what generation we are talking about, she asks, shouldn’t we always be trying to foster connections with new hires, providing a sense of meaning to their work, making transparent the ways that people can “get ahead”, creating opportunities for teamwork, as well as offering feedback on performance, opportunities and developmental needs as frequently as possible?
• The answer, of course, is yes. The issue is that previous generations were not as vocal in expressing such concerns.
