No matter the industry, employee turnover is something that companies in every sector struggle with constantly. The events of the past year have exasperated this issue, with the U.S. Bureau of Labor Statistics reporting that between March 2020 and March 2021, there were close to 70 million instances in which employees separated from companies in some fashion.
In the automotive technician space, the constant evolution of cars and trucks—whether you’re talking about electric vehicles or connected technologies—has increased the demand for higher level knowledge and training to keep up. While the number of vehicles in use is expected to climb in the near future, the inclusion of interconnected sensors, cameras, and other devices that allow for both predictive maintenance and remote diagnosis, will cut the number of overall hours afforded to technicians.
The Visible (and Invisible) Costs of Turnover
Hiring, training, and assimilating new employees into your service center is no easy task. There are costs involved with every step, from when you first post the position to when the paperwork is signed, and the employee starts their first day.
According to author F. John Reh, a consultant with more than 30 years of experience in business management, there are both direct and indirect costs related to hiring new employees. This can include recruiting costs (fees to outside recruiters, job advertising costs), as well interview costs and hiring costs, such as sign-on bonuses, relocation costs, and even background checks and drug screenings.
Depending on how much notice an employee has given before leaving the company, employers may also have to scramble to fill the role in the meantime, with current staff picking up the slack, which could affect overall employee morale and lead to more turnover. According to the Society for Human Resource Management, on average, it can take more than 40 days to fill a vacant position, adding to the stress on both management and the technicians filling those voids.
Good employees are hard to find, which is why many companies are taking a more active approach to ensuring that their employees are content in the workplace, reducing the level of turnover.
Why Employees Leave
According to Mercer’s 2021 Global Talent Trends report, reinventing flexibility was at the top of survey respondents plans for transforming their workforce to focus on immediate priorities. The COVID-19 pandemic was likely a cause of this change, but the message is clear—employees want more flexibility in the workplace and will explore their options at other companies to fulfill this need.
The Work Institute’s 2020 Retention Report echoed the same message, with data showing that employees voluntarily leaving companies increased to more than 42 million in 2019—close to a 100 percent increase since 2010. The costs associated with turnover amounted to more than $630 billion in 2019, which were calculated by an average of $15,000 in costs per employee by the report’s author.
Good employees are not easy to find and can come at a premium. Given the current workforce data, coupled with Baby Boomers “heading for the exits” as they near retirement, it should be crystal clear that the old ways of recruitment and retention no longer work.
Here are things you should consider:
Pay Isn’t Everything
There are more ways to keep employees that just though salary increases. The Work Institute’s report found that three in four employee turnovers are preventable by offering other perks, like career development (20 percent of employees quit for career development reasons), and ensuring proper manager behavior (12 percent of employees quit for manager behavior reasons).
Ensuring that your employees envision a positive future with your company can increase your chances of retention, as well as giving them something to work towards. And putting the right person in charge of the right team will go a long way in retaining employees.
Onboarding is a Start
After an effective hiring process, the next steps in an employee’s journey can be the most crucial ones. As they say, you only get one chance to make a first impression, so make sure it’s a good one. The onboarding process at your company should include acclimating new hires into your work environment and culture. Take the time to introduce the staff, even those who they might not be actively working with.
A December 2020 article from Human Resources Today showed that explaining not only their role in the company, but also showing how they fit into the long-term goals of the organization, can do wonders. It makes them feel like more of a part of the team, and it can help increase retention rates.
Flexibility Isn’t Just for Millennials
Cross-generational research from FlexJobs found that 82 percent of millennials (they’ve now passed Gen X as the largest group in the U.S. workforce) rate flexibility as an important factor in evaluating jobs. That’s only slightly higher than Gen X or the Baby Boomers who also highly-value flexible work arrangements. [Note: Gen X, born from early-to-mid 1960s to the early 1980s; Baby Boomers, born between 1946 and 1964.)
Giving your workers time to tune out of their jobs and tune in to their personal lives can also go a long way to increase overall morale and decrease the number of employees leaving the company.
Workers Want Engagement
In a 2020 survey of workplace productivity by Gallup, the percentage of workers who are “highly involved in, enthusiastic about and committed to their work and workplace” reached a record high of 38 percent, even with many working from home due to COVID. Gallup’s analysis highlighted the fact that employee engagement during tough times is even more important, and therefore a necessary tool in the retention toolbox. Employer response to questions, queries, and concerns from their employees should be immediate and effectively worded.
Valvoline Instant Oil Change (VIOC) is the second-largest quick lube business in the U.S. with over 1,500 locations nationwide. As a service-oriented business experiencing continued growth, they are especially sensitive to the current labor market in their search for talent. They recognize that engagement matters.
Matt Furcolo, Valvoline’s vice president of company operations, spoke to the importance of recognizing individuals for what they bring to a culture. They do this by allowing them input in the areas that impact them day-to-day. One area identified by one of the company’s routine surveys is that employees in warmer-weather areas of the country, wanted to be able to wear shorts at work.
As it happened, Valvoline’s standard uniform had been in place for 30 years. Furcolo and company managers recognized that this change was important to employees and made it happen. Employees are now able to wear shorts for designated periods of the year.
Your Brand Must Be Authentic
A 2018 report, Attracting and Retaining Talent in the Auto Industry, released by Weber Shandwick, found that only 33 percent of Millennial automotive engineers perceived a strong match between how their employer portrayed themselves and what their employee experience was. This “trust” factor was even lower with female engineers—only 18 percent of them said they placed “a lot” of trust in their organization’s leadership.
Taking Steps to Prevent Turnover
Keep in mind that you are not alone. What are other companies and industries doing to prevent, or at least mitigate turnover? Finding qualified people who meet the talent needs of your business, especially in terms of technicians and installers mirrors the challenges facing other industries.
Manufacturing is one of America’s legacy sectors. As an industry sector, manufacturing represents everything from automotive assembly to food processing, has undergone a dramatic transformation since the post-World War II era. Then, nearly a third of all Americans worked in factories.
There are standardized practices that work across most if not all industries and sectors. This is true with any business hiring specialized employees like trucking fleets, and positions like heavy-duty technicians.
Don’t ignore pay
According to the most current Bureau of Labor Statistics data, the average annual salary of automotive service technicians and mechanics is $46,760, below the national occupational employment and wage estimates from May 2020 of $56,310.
Some industry experts have pointed to flat-rate pay as a cause for turnover, where the employer estimates how long a job should take and pays the technician a preset amount, based on the projected time. This has been seen as unpredictable by some, since it relies on the amount of work orders to keep technicians busy and paid regularly.
Pay may not matter to some. But in terms of hiring employees with a particular skill set—like technicians and installers—pay cannot be ignored.
High-performing companies invest in and engage their employees
Training and engaging your current employees are equally important. Tooling U-SME (formerly Tooling University), is a nonprofit educational technology and blended-learning organization that provides certifications, software, and content for manufacturing. They released a report, The True Cost of Turnover: Hidden Costs Go Beyond Financial to Impact Productivity and Culture, which highlighted how voluntary turnover costs organizations hundreds of thousands and up to millions of dollars. The report also detailed the dangers in neglecting taking necessary steps to retain and continually develop a company’s current workforce.
In a nutshell, the report indicated that it was those “high-impact learning organizations,” which tended to “outperform their peers” in terms of a host of factors, including maintaining a vibrant workforce. What they found is that high-performing companies invested in “employee engagement, personnel, and tools to continually evaluate and develop their workforce.”
All industries are struggling to recruit new people as Baby Boomers age out. In the trucking field, it’s estimated that 80,000 new technicians will be needed over the coming decade according to Tooling U-SME’s report. The question for you becomes: will there be enough “new blood” to fill those slots? Also, how do you make sure your current workforce has the right skills?
Great talent is scarce
In a tight labor environment, where competition for talent can be cut-throat, being able differentiate who you are from similar companies is particularly important. And while differentiation from the masses is essential, it’s also imperative for job seekers to connect with your brand.
Companies can optimize their career sites so that jobs are indexed by Google, while also putting processes in place that help maximize the visibility of certain jobs on various job boards, like Indeed. By modeling culture-building practices, coupled with ongoing training and development, you can promote a “people-focused” culture at your company.
While it can be argued whether there’s an actual labor shortage, it’s clear that the competition for exceptional talent is intensifying. Skill sets necessary for companies like Valvoline and companies hiring technicians and installers require a different approach in terms of recruitment and then, retention.
It’s not a new thing: highly functional companies have cultures that communicate clearly to their people: we care about you. They engage them, provide some flexibility, and model authenticity across their culture. It’s always been that way, even if “culture” wasn’t a commonly used term in the past.
If you want to attract exceptional talent, then you need to be the kind of company that clearly communicates that you care about your people. Valvoline has differentiated itself from competitors by promoting an employee value proposition to ensure applicants and current team members understand what we have to offer as a company.
Want to learn more about preventing turnover? Request a callback at partner.valvoline.com.