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Connecting the Dots“Manufacturing Processes . . . . . . People Processes”
2nd Squadron 4th Cavalry Squadron Staff March 22, 1991
JoeKarl
Agenda & Reminders
• Welcome• Speaker Introduction• Handouts• Connecting the Dots “People Powered Lean”
– Building a Case– Case Study– Look at the “Process”
• Gaining Engagement, On Boarding, Production Skills, Leader Development
– Q&A
Hypothesis
If we can create Ownership and Engagement from the “Start” (On Boarding) and we have Engaged
Leaders . . . We can positively influence
1. *Increased Employee Satisfaction 2. *Increased Employee Engagement 3. Increased Customer Satisfaction 4. *Decrease Production Costs 5. Increased First Pass Yield6. *Increased Employee Skills 7. *Increase Production Capacity8. *Decrease Cycle Times9. *Decreased Turnover10. Increased Revenue 11. *Decrease Cost 12. *Increasing Profit
All Are Measurable Events
Gallup Business SuccessProductivity, Profitability, Retention, Customer Satisfaction
SustainableGrowth
EngagedEmployees
EngagedCustomers
TheRight Fit
IdentifyIndividualStrengths
Real ProfitIncrease
Great Leaders
StockIncrease
On Boarding
Signs of Actively DisengagedEmployees
• Physically present but psychologically absent• “What can I take” rather than “what can I give”• Share unhappiness about work with peers• “I’m OK but everyone else is not”• Service prevention rather than service provision• Not productive but always has excuses• Inability to move from problem to solution• Normal reaction starts with resistance• Low commitment to company• Might sabotage or manipulate solutions• Isolation, low trust
Signs of Not EngagedEmployees
• Meeting the Basics• Confusion or inability to act with confidence• Low risk response• No real sense of achievement• Making up their own game• Not always committed• Show negativity but not underground
Signs of Engaged Employees
• Psychologically committed to company• Consistent levels of High Performance• Innovative and drive for efficiency• Intentionally build supported relationships• Clear about role outcomes expected• Passionate, high energy, and enthusiastic• Never run out of things to do• Loyal to workgroup and company• Broaden what they do and build on it• Positive constructive criticism
Building a Case for Engagement
(CEO . . . Hourly)
7
“The most important process in your organization is the process that describes the relationship between the leader and their people. It is the only process that matters.”
Mike PettersPresident, Northrop Grumman Newport NewsOctober 21, 2006
“Ownership & Engagement” Thru the Lean Journey
PeopleEquipmentMaterials
Process
Ownership
Engagement
The goal of People Powered Lean (PPL) is to support the plant’s Lean Manufacturing Improvement initiative by synchronizing and integrating the
People side of the business with manufacturing.
People Powered Lean
Overall Goal
Gallup Business SuccessProductivity, Profitability, Retention, Customer Satisfaction
SustainableGrowth
EngagedEmployeesEngaged
Customers
TheRight Fit
IdentifyIndividualStrengths
Real ProfitIncrease
Great Leaders
StockIncrease
On Boarding
10
Gallup Engagement Hierarchy
What do I get?
What do I give?
Do I belong?
Howcan wegrow?
Ownership
2) I have materials and equipment I need to do my work right1) I know what is expected of me at work
6) Someone at work encourages my dev.5) My Supervisor/Someone at work cares4) I received recognition last seven days3) I do what I do best every day
10) I have a best friend at work9) Coworkers committed to quality8) Mission/Purpose of company7) At work, my opinions seem to count
12) Opportunities to learn and grow11) Progress in last six months
Growth
Teamwork
ManagementSupport
BasicNeeds
Copyright © 1992-1999 The Gallup Organization, Princeton, NJ. All rights reserved.
Gallup StudyOnly 26% are Engaged
(loyal and productive)
55% are not engaged (just putting in time)
19% are actively disengaged (unhappy and spreading their
discontent)
$350 billion per year in lost productivity
Each employer is wasting approximately 10% of their
payroll dollars on lost productivity due to
disengagement
Signs of Engaged Employees• Psychologically committed to company• Consistent levels of High Performance• Innovative and drive for efficiency• Intentionally build supported relationships• Clear about role outcomes expected• Passionate, high energy, and enthusiastic• Never run out of things to do• Loyal to workgroup and company• Broaden what they do and build on it• Positive constructive criticism
Signs of Not Engaged Employees• Meeting the Basics• Confusion or inability to act with confidence• Low risk response• No real sense of achievement• Making up their own game• Not always committed• Show negativity but not underground
Signs of Actively Disengaged• Physically present but psychologically absent• “What can I take” rather than “what can I give”• Share unhappiness about work with peers• “I’m OK but everyone else is not”• Service prevention rather than service provision• Not productive but always has excuses• Inability to move from problem to solution• Normal reaction starts with resistance• Low commitment to company• Might sabotage or manipulate solutions• Isolation, low trust
Three Business/Social Groups in Every Organization
In Group – High Trust – Good Communications – “Let ‘em Run” Goal Setting– Low Task Definition Needs– High Relationship Needs
Led(O)
Leader
Led(I) Led(M)
Out Group – Low Trust – Stressful Communications – “By the Numbers” Goal
Setting– High Task Definition Needs– Low Relationship Needs
Strategic Goal For High Performing Unit
Facts:– Little movement from Out to In– More movement from In to Out due to
Leaders breaking the Goal Alignment Contract/Agreement
Middle Group The Key to Success
New Employees make a decision within first 48 - 72 hours from introduction to immediate supervisor.
Strategy1. Focus on New Hires Immediately
– On Boarding, Production Skills, and Leader Development
2. Focus on the Middle Group: Move them into the In Group as quickly as possible
– Production Skills & Leader Development
System Solutions
Systems Include• On Boarding
• Organizational Scheme• Leader Development
• Production Skills/Career Path Development
Systems Include• On Boarding
• Organizational Scheme• Leader Development
• Production Skills/Career Path Development
Powered Lean “PPL”Powered Lean “PPL”
SS
OM
1S
MU
NE
GM
OM OM
SSSS
1S 1S
GT GT
NE
Organizational Scheme
GM: General ManagerOM: Operations ManagerSS: Shift Supervisor1S: 1st Line SupervisorMU: Make Up SupervisorGT: Go To EmployeeE: Employee NE: New Employee
Vertical Dyad Linkage
EE
•How The Work Gets Accomplished•Core Daily Business Element•Communication Linkage•Planning Horizons•Specific Task/Behaviors
Organizational Schemefocuses on linkage and
its affect on the CoreBusiness Element
Training Concept
209
Training Program Overview
Skill Paths
1. Mechanic
2. Assembly
3. Sheet Metal
4. Material Handler
5. Technical Inspection
6. Maintenance
7. Production Control
Common SkillsTraining
What every employee needs to know
CellTraining
Skills to do 1st Job
Intermediate SkillsTraining
Skills to do second and third job
Employee Skill Path
Lead/Advanced Skills Training
Skills to Teach Others the Job
Master MechanicMentor
Tech Specialist
Hiri
ng
On
Bo
ard
ing
Soft Skills Development
Career
Complex Tasks
Life Cycle Skills Development Program
ManagementSkills
Basic Skills
Intermediate Skills
SupervisorDevelopment
Training
Supervisor Practical
Application/Evaluation
Advanced Skills
Initial Entry
Skills Training
I
MentorSkills
V
Competency Level
Experienced Personnel
Employment Skills
Skills Evaluation
BasicTraining
Practical ApplicationCoaching/ Evaluation
Practical ApplicationCoaching/ Evaluation
Practical ApplicationCoaching/ Evaluation
III
II
IntermediateTraining
AdvancedTraining
IV
Pre-Employment VI
College Transfers
Adult Education
Current Employees
Community Colleges
High Schools CommonSkills
TrainingTech Schools
Orient,Screen
&Identify
Candidates
Building PipelinesBusiness Metrics:
- Decrease Cost of Hiring- Reduce Attrition (pre- and post- hiring)- Reduce Hiring Cycle Time- Improve New Hire Integration - Improve New Hire Job Performance- Decrease New Hire Time to Competency
Military
State Employment Offices
Temp Agencies
Other Companies
Interview&
AssessSkills
GenerateLabor Req’s
HiringDecision
Increase Cost Decrease Cost
1st JobSkills
Development
ShouldBe
Tracked
Case Study
• ESCO Covington, a heavy manufacturing plant located in Covington, KY
• Produces heavy steel “Buckets”
• Need: “Build more quality steel products faster to improve market share and increase profit”
• Situation: High attrition and issues filling jobs at the speed of business
• ESCO Covington, a heavy manufacturing plant located in Covington, KY
• Produces heavy steel “Buckets”
• Need: “Build more quality steel products faster to improve market share and increase profit”
• Situation: High attrition and issues filling jobs at the speed of business
ESCO Covington People Powered Lean
Over 300 Employees10.3 Weeks Hiring Process
Production Skills ProcessOn Boarding Process
Where to Start?Where to Start?
College Transfers
Adult Education
Current Employees
Community Colleges
High Schools CommonSkills
TrainingTech Schools
Orient,Screen
&Identify
Candidates
Building PipelinesBusiness Metrics:
- Decrease Cost of Hiring- Reduce Attrition (pre- and post- hiring)- Reduce Hiring Cycle Time- Improve New Hire Integration - Improve New Hire Job Performance- Decrease New Hire Time to Competency
Military
State Employment Offices
Temp Agencies
Other Companies
Interview&
AssessSkills
GenerateLabor Req’s
HiringDecision
Increase Cost Decrease Cost
1st JobSkills
Development
ShouldBe
Tracked
Training Concept
209
Training Program Overview
Skill Paths
1. Mechanic
2. Assembly
3. Sheet Metal
4. Material Handler
5. Technical Inspection
6. Maintenance
7. Production Control
Common SkillsTraining
What every employee needs to know
CellTraining
Skills to do 1st Job
Intermediate SkillsTraining
Skills to do second and third job
Employee Skill Path
Lead/Advanced Skills Training
Skills to Teach Others the Job
Master MechanicMentor
Tech SpecialistH
iring
On
Bo
ard
ing
Production Identifies
Requirement
HR PostsRequisition
HR Receives
Applications
HR SchedulesInterviews
Skills TestHiring
Decision
Drug Screen and
Physical
Applicant Given Report
Date
HR AdminInprocessing
Admin In-Processing & Video BasedOSHA Training
OJTTraining
Example Hiring Process July 2004
Offer Sent
ProductionInterviews
Cycle Time: 10.3 WeeksCost: $2,008 per new hire(Labor costs only)
ESCO Modernization Program
Results:Improved production efficiency by 23% (29.42
hours/product to 23.98 hours/product) representing a 1st year direct cost reduction of $285,600
Reduced the time to hire from 10.3 weeks to 1 week
Reduced the cost of hire from $2008 per hire to less than $500 per hire
Decreased 1st year attrition rate from 59% to 6%
Reduced overall attrition by 31%
Results:Improved production efficiency by 23% (29.42
hours/product to 23.98 hours/product) representing a 1st year direct cost reduction of $285,600
Reduced the time to hire from 10.3 weeks to 1 week
Reduced the cost of hire from $2008 per hire to less than $500 per hire
Decreased 1st year attrition rate from 59% to 6%
Reduced overall attrition by 31%
In six months, the project team analyzed, designed, developed, and piloted a modernized teammate acquisition program named People Powered Lean (PPL).
In six months, the project team analyzed, designed, developed, and piloted a modernized teammate acquisition program named People Powered Lean (PPL).
Components:• Modernized hiring process• Scenario based interview/skills
assessment• “World class” first day• Common skills training program;• Production cell training program• First 90 day coaching and feedback
process• PPL management system focused
on reducing the new Team Mates time to competency in their first job and reducing 1st year attrition.
Components:• Modernized hiring process• Scenario based interview/skills
assessment• “World class” first day• Common skills training program;• Production cell training program• First 90 day coaching and feedback
process• PPL management system focused
on reducing the new Team Mates time to competency in their first job and reducing 1st year attrition.
The overarching goal was to create new Team mate engagement from first contact leading to improved business performance.
On BoardingBuilding People Pipelines to Attract, Hire, and Retain the Right People, in the Right Numbers, in the
Right Skills, at the Right Time, at the Right Cost…
“Getting The Right People on the Bus”Recruiting - - - Trying Out - - - Making the Team
“Getting The Right People on the Bus”Recruiting - - - Trying Out - - - Making the Team
Are You Forecasting Your Labor as you Forecast Your Business
• How far out are you looking?
• What skills will you require?
• Lead time from labor requirement to competency?
• Who manages this process?
Are You Forecasting Your Labor as you Forecast Your Business
• How far out are you looking?
• What skills will you require?
• Lead time from labor requirement to competency?
• Who manages this process?
Building Pipelines:
• Orient, Screen, Identify
• Interview & Assess Skills
• Common Skills Training
• 1st Job Skills Development
Building Pipelines:
• Orient, Screen, Identify
• Interview & Assess Skills
• Common Skills Training
• 1st Job Skills Development
Decrease Cost of Hiring, Reduce Attrition, Reduce Hiring Cycle Time, Decrease Time to Competency, Improve New Hire Performance
College Transfers
Adult Education
Current Employees
Community Colleges
High Schools CommonSkills
TrainingTech Schools
Orient,Screen
&Identify
Candidates
Building PipelinesBusiness Metrics:
- Decrease Cost of Hiring- Reduce Attrition (pre- and post- hiring)- Reduce Hiring Cycle Time- Improve New Hire Integration - Improve New Hire Job Performance- Decrease New Hire Time to Competency
Military
State Employment Offices
Temp Agencies
Other Companies
Interview&
AssessSkills
GenerateLabor Req’s
HiringDecision
Increase Cost Decrease Cost
1st JobSkills
Development
ShouldBe
Tracked
Production Identifies
Requirement
HR PostsRequisition
HR Receives
Applications
HR SchedulesInterviews
Skills TestHiring
Decision
Drug Screen and
Physical
Applicant Given Report
Date
HR AdminInprocessing
Admin In-Processing & Video BasedOSHA Training
OJT Training
Example Hiring Process: July 2004
Offer Sent
ProductionInterviews
Cycle Time: 10.3 WeeksCost: $2,008 per new hire (Labor costs only)
Production Identifies
Requirement
HR PostsRequisition &Sends to OET
OETScreening
HR Receives
Applications
HR SchedulesInterviews
InterviewsConducted;
Welding Test
Hiring Decision
Drug Screen and
Physical
Applicant Given Report
Date
HR AdminInprocessing
Plant Manager Meeting
Shift Supervisor
OSHA Training
Process/Quality
Training
Example Hiring Process: October 2004
Offer;New Hire
Packet Sent
Cell Training
Structured Orientation and Training Process
Cycle Time: 5.8 Weeks - 43.7% reductionCost: $1,420 per new hire (Labor costs only) – 29.3% reduction
In Order to Attract, Hire, and Retain . . . Ask Yourself
• Are you forecasting your labor as you forecast your business? – Are your labor forecast driven by your production needs– What is the Minimum and Maximum required– Are competitors/new companies expected to enter into the market– What are the recruitment differentiators (conditions, environment, pay, stability,
schedule, parking, overtime, etc.) • How far out are you looking?
– Do you expect increased/decreased production– What are the Pipeline Capacities
• What skills will you require? Current or New?– What does your candidate profile look like?– What does the job look like (RJP)– Is there a skills assessment; if so who administers it
• Lead Time from labor requirement to competency?– What are the in processing procedures
• Who is responsible for managing it?– Who does orientation and screening– Who conducts the interviews
• What options do you have?– What and where are the pipelines– What are their capacities
College Transfers
Adult Education
Current Employees
Community Colleges
High Schools CommonSkills
TrainingTech Schools
Orient,Screen
&Identify
Candidates
Business Metrics:- Decrease Cost of Hiring- Reduce Attrition (pre- and post- hiring)- Reduce Hiring Cycle Time- Improve New Hire Integration - Improve New Hire Job Performance- Decrease New Hire Time to Competency
Military
State Employment Offices
Temp Agencies
Other Companies
Interview&
AssessSkills
GenerateLabor Req’s
HiringDecision
Increase Cost Decrease Cost
1st JobSkills
Development
ShouldBe
Tracked
ExamplePipeline Capacity Analysis
2. Adult Education
1. Community Colleges
4. Tech Schools
3. Other Companies(VEC)
• Community Colleges (65 identified) – Tidewater (50)– Paul D. Camp (15)
• Adult Education (108 identified)– Norfolk Tech (12)– New Horizons (20)– Pruden (1)– Richmond Tech (75)
• Local Companies Laying Off Workers (50 Identified) – Information from Virginia Employment Commission
• Technical High Schools (56 identified)– New Horizons (20), Pruden (4), Norfolk Tech (10),
Virginia Beach (16), Chesapeake (6), Badger (0)
Total Identified as of 5/11/2005: 279
Example Orientation and Screening
• Conduct Initial Orientation by providing Realistic Job Preview to each interested person. www.vasteemer.com
• Candidates passing minimal screening criteria are provided applications.
• Validates Pre-Requisite Experience as required and provides copy of skills assessment/test.
• Ensure application completion• Classifies Candidate Sheet• Provide Candidate with Hiring Process/Cycle Time
Information and Tracking Sheet
Orient,Screen
&Identify
Candidates
ExampleCandidate Classifications
1. Hire Now: Exceeds All Criteria 2. Hire: Meets All Criteria3. Near Hire: Will meet All Criteria within 30 days with
self-directed development4. Far Hire: Will meet All Criteria within 120-180 days with
self-directed development5. No Hire: Will not meet minimum criteria for at least 6
months 6. Best Athlete 7. Has unique skills outside of current Job Search
Requirements
ExampleInterview and Skills Assessment
Goal: Create a situation where the employee and the company can determine if the new employee has the skills and attitudes to be successful
Features:1. Plant Tour2. Skills Assessment3. Attitude Assessment4. Hiring Decision5. New Teammate Skills Development Plan
Interview&
SkillsAssessment
ExampleSkill Assessment Classification
• Fully Qualified:– Passes Skills Assessment 1st Time– Good attitude
• Qualified:– Fails part of Skills Assessment – Good attitude– Can pass with minimal re-training…– Company provides training on the spot
• Minimally Qualified:– Fails most of Skills Assessment – Good attitude– Requires significant training either pre- or post hiring
• Unqualified:– Fails all of Skills Assessment – Good attitude– Refer to Local Training Facility/School for skills development
In Process &
CommonSkills
Training
ExampleIn Processing and Common Skills
TrainingGoal: Efficiently in-process and bring new
teammates to competency on all Common Tasks prior to assignment to work area or cell.
Example “World Class First Day”
Goal:– New Team Mate leaves after first day thinking:
• Wow! These guys really know what they are doing.• I’ve talked to the Plant Manager and my Boss.• I understand what we do here and how I fit in.• I know the how to work safely.• I know what I need to do to be successful in this company• I have a hard hat and a locker with my name on it • I know I will get paid.• I know what I need to do tomorrow.• Let’s go to work!
Experiences . . . Beliefs . . . Actions . . . Results
ExampleWorld Class 1st Day
Thursday’s 9:30 AM: Arrive at Plant• Met by Production Manager• Turn HR New Hire Packet to HR Rep • Issued Locker with Name on it• Issued Helmet with Name on it • Digital Picture taken • Issued Equipment • Check Employee provided PPE
9:45 AM: Plant Tour and Safety Training with Production Manager• OSHA Safety Training Checklist Completed and placed in Employee Training File
11:45 AM: Meet Plant Manager • Lunch or Office Call• Introduction to company and general information about the corporation, history,
products, markets, and facilities• Expose the new employee to Culture, Values, what the company does, how the
company makes money, and where the employee fits in the bigger picture
World Class 1st DayThursday’s 1:00 PM: Quality Overview • Plant Tour with Quality Manager• General training on quality• Individual expectations, metrics, quality control, quality process
2:00 PM: Process Overview • Plant Tour with Continuous Improvement Manager; • Walks the Value Stream; Sees the Big Picture• Introduction to Lean Training. • Continuous Improvement Responsibilities
4:00 PM: Administrative Questions and Answers • Verification of In-processing with HR Manager
Example Common Skills Training
Tailored Individual Development Plan developed at the Interview and Skills Assessment.
Example Learner Based Training Lesson Outline:
1. Message From the GM2. Safety/OSHA 3. Production Terms and Language 4. Use of Personal Protective Equipment (PPE)5. Reading Measurements to the 1/16” Detail6. Blueprints and Weld Symbols7. Quality Assurance
NOTE: A Web Based Platform so that New Hires can review and pre-train prior to Interview. Can be used as a post hiring support tool.
Skills every individual must know prior to starting Cell Training
Example Cell Training
1st JobSkills
Development
Goal: Seamlessly integrate new Hire into the production line and reduce “Time to Competency”
Sequence List:1. New Hire meets with 1st Line Supervisors/Cell Trainers 2. 1st Line Supervisor uses Skills Assessment Record to
develop Cell Training Program3. Supervisors use 30-60-90 day Feedback System to
assess performance and update skills development record.
4. New Team Mate and 1st Line Supervisor conduct a Goal Alignment session and agree on initial Career Path and Production Skills Training Plan.
# Interested 104 97 +7
# of Apps Received 85 81 +4
# of Screened Candidates Scheduled for Test/Interview 65 59 +6
# Tested & Interviewed 58 53 +5
Classifications
And
Assessments
Fully Qualified 7 7 -
Qualified (Less than 2 weeks) 17 17 -
Minimally Qualified (2-4 weeks) 26 22 +4
Unqualified (More than 4 weeks) 8 7 +1
Awaiting Weld Test Results (Bend) 0 0 -
Applicant Flow
Applicant Flow: Page 1 of 2
Dec. 12 Nov. 7 Delta
# Failed Interview 13 12 +1
# that Voluntarily Withdrew 9 9 -
# Awaiting Hiring Decision or Offer Pending 0 1 -1
# of Active Applicants 5 6 -1
# Offered and Accepted Employment 34 31 +3
# of Offers Declined or Rescinded 3 3 -
# Started 32 30 +2
# Terminated 7 5 +2
Applicant Flow
Applicant Flow: Page 2 of 2
Dec. 12 Nov. 7 Delta
Hiring Cycle Times- All Cycle Times measured in Calendar Days -
Cycle Time Interval Days
Application Date to Test/Interview Date 18.55
Test /Interview Date to Offer Date5.05
Offer Date to Acceptance2.64
Acceptance to Start Date10.50
Total Application Date to Start Date42.41
Changes since Nov. 7th Program Review -1.96
Hiring Cycle AttritionHiring Cycle Phase # Attrited
Pre-Application 19
App Date to Weld Test 21
Weld Test to Interview 8
Post-Interview 15
Drug Test 0
Offer Declined 2
Post-Hire (In-Training) 7
Total Hiring Cycle Attrition: 72 of 104 Candidates
Post-Hire AttritionName
Termination Date
Termination ReasonDays on the Job(Liebherr Work
Days)
7/25/2005Discharged from Welding Training. Poor work habits
and slow progression given as primary reasons.10
10/4/2005
Unable to complete the Welding School within 7 weeks. Liebherr liked Dorian’s Work Ethic and
offered him positions in Assembly/Paint. Dorian refused to work on 2nd Shift and thus was dismissed.
44
8/26/2005Discharged from Welding School. Dismissed for
‘cheating’ on his vertical Weld Test. Albert laid his test plate flat after receiving warning from Bob.
15
8/8/2005Discharged from Welding School. Poor work habits
and slow progression given as primary reasons.11
10/10/2005Unacceptable progress in Welding School and unwillingness to brake old habits. Needs more
experience than our training can provide.11
11/18/2005Discharged for falsifying application with regards to
educational background (HS Graduation).31
12/2/2005Discharged for falsifying application with regards to
educational background (HS Graduation).45
Failed Interview Results
NameInterview
DateHire Category Reason for Failed Interview
12/7/2005 Minimally Qualified
Poor Weld Test Performance & Interview revealed troubling history. Expelled from
school with 3 months left. Criminal charges pending , with January court date.
Date Range: Nov. 7th – Dec 12th
Total Failed Interviews (since 5/24/05): 15
Atmosphere of Ownership . . . Led Will
• Treat the company like their own
• Hold each other accountable for doing the right thing
• Give early warning of problems
• Have the courage to ask questions
Organizational Goals– Cost– Schedule– Quality– Safety
Individual Goals– Compensation– Opportunities– Responsibility– Work Environment– Recognition
Communication Awareness
Goal Alignment
Led
Leader to Led Linkage
Can only occur when there is a conversation between the Leader and the Led about the Led!
Authentic Communication Leader
If We Fully Implement PPL . . .1. Increased Employee Satisfaction 2. Increased Employee Engagement 3. Increased Customer Satisfaction 4. Decrease Production Costs 5. Increased First Pass Yield6. Increased Employee Skills 7. Decrease Cycle Times 8. Increase Production Capacity9. Decreased Turnover/Increase Retention10.Increased Revenue 11.Decrease Cost to Produce 12.Increasing Profit
All AreMeasurable
Events
63
Turnover Costs
Industry Vol. Quits Retire Fired
TotalTurnover
Rate
Replacement Costs
Industry Standard
Annual Turnover Costs for 300 Worker
Site
All Private 22.0% 2.5% 0.5% 25.0% $12,000 $900,000
Construction 25.5% 2.5% 1.0% 29.0% $14,000 $1,218,000
Manufacturing 14.0% 2.0% 1.0% 17.0% $14,000 $714,000
Wholesale Trade 15.0% 3.0% 1.0% 19.0% $10,000 $570,000
Retail Trade 30.0% 3.3% 0.7% 34.0% $8,000 $816,000
Transportation 15.0% 3.5% 0.5% 19.0% $13,000 $741000
Leisure and Hospitality 44.0% 2.5% 0.5% 47.0% $6,000 $846,000
Manufacturing Breakout
• 82.4% of Turnover Costs are in the Voluntary Quits Category• 11.8% of Turnover Costs are in the Retirement Category• 5.8% of Turnover Costs are in the Fired Category
Manufacturing
TotalTurnover
RateVol.
Quits Retire Fired
Replacement Costs
Industry Standard
Annual Turnover
Costs for 300 Worker Site
Total 17.0% 14.0% 2.0% 1.0% $14,000 $714,000
Vol. Quits 14.0% $14,000 $588,000
Retire 2.0% $14,000 $84,000
Fired 1.0% $14,000 $42,000
Voluntary Quits Costs
Industry Vol. QuitsTotal
Turnover rate
Replacement Costs
Industry Standard
Annual Voluntary Quits Costs for 300
Worker Site
All Private 22.0% 25.0% $12,000 $792,000
Construction 25.5% 29.0% $14,000 $1.071,000
Manufacturing 14.0% 17.0% $14,000 $588,000
Wholesale Trade 15.0% 19.0% $10,000 $450,000
Retail Trade 30.0% 34.0% $8,000 $720,000
Transportation 15.0% 19.0% $13,000 $585,000
Leisure and Hospitality 44.0% 47.0% $6,000 $792,000
Retirement Costs
Industry RetireTotal
Turnover rate
Replacement Costs
Industry Standard
Annual Retirements Costs for 300 Worker
Site
All Private 2.5% 25.0% $12,000 $90,000
Construction 2.5% 29.0% $14,000 $105,000
Manufacturing 2.0% 17.0% $14,000 $84,000
Wholesale Trade 3.0% 19.0% $10,000 $90,000
Retail Trade 3.3% 34.0% $8,000 $79,200
Transportation 3.5% 19.0% $13,000 $136,500
Leisure and Hospitality 2.5% 47.0% $6,000 $45,000
Fired
Industry Fired
TotalTurnover
rate
Replacement Costs
Industry Standard
Annual Fired Costs for 300 Worker Site
All Private 0.5% 25.0% $12,000 $18,000
Construction 1.0% 29.0% $14,000 $42,000
Manufacturing 1.0% 17.0% $14,000 $42,000
Wholesale Trade 1.0% 19.0% $10,000 $30,000
Retail Trade 0.7% 34.0% $8,000 $16,800
Transportation 0.5% 19.0% $13,000 $19,500
Leisure and Hospitality 0.5% 47.0% $6,000 $9,000
PPLChallenges
1. No silver bullet…Big Problem with a lot of moving parts in a dynamic business environment
2. Focused effort based upon real analysis…not a “Good Idea of the Day” approach.
3. Recommendations must make good business sense
4. Design Executable Programs and be good Program Managers (Cost, Schedule, Quality)
5. Be realistic in execution and “eat the elephant” one bite at a time.
6. Requires long range thinking… People are multi-year projects-- if fact Life Long Projects
PPLThings to Attack
• Organizational Scheme • On Boarding• Leader Development – Current and Future• Production Skills Training• Lean Training
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