A high turnover rate in the manufacturing industry is no laughing matter and can be a major detriment to your business. In fact, studies show that “average employment replacement costs are 1 to 1½ times their salary.” Besides this, consistent turnover can adversely affect your business in other ways including reduced productivity, lower employee morale, decreased revenue and so on.
Fortunately, exit interviews can serve as an effective way to learn about what’s causing high turnover and help you right the ship. Let’s discuss the importance of exit interviews and how they can help improve future retention.
Save Significant Money
When you think about all of the expenses that are associated with replacing employees such as posting job ads, training and onboarding, they can really add up in a hurry. If you find yourself constantly making new hires because existing employees are leaving, it can put your business in a tough predicament.
The same aforementioned study also found that “if only one person is retained using knowledge gained from the exit interview findings, the dollars spent to dollars saved ratio = $25,000 to $50,000; a net savings of $25,000.” And that’s just for one person. If you consider the long-term implications, this can have a profound impact on your business and increase your profitability dramatically.
If it’s clear that there’s a retention problem and employees are leaving prematurely, you’ll want to get to the root cause of it. Exit interviews are arguably the best way to accomplish this because they’re designed to get firsthand insight into why your workers aren’t sticking around.
For instance, they can identify negative influencers such as company practices and policies and determine if there are any specific issues that are causing a high turnover rate. This kind of objective data can provide some much-needed perspective so you’ll know exactly what’s going wrong and what needs to change.
As an employer at a manufacturing company, it’s critical to understand what makes your employees tick and do whatever it takes to ensure a reasonable level of job satisfaction. By analyzing the data generated from exit interviews, you can pinpoint where operations can improve to increase your retention rate. You can also use this information to come up with creative solutions to enhance employee morale. Over time, this can be a catalyst for better rapport with workers and decrease the odds of them leaving prematurely.
If you find that you’re losing top manufacturing talent, it’s important to take action before it’s too late. By performing exit interviews, you’ll gain key insights into why your employees are leaving and resolve the situation before it gets out of hand.
Looking for more hiring and management advice? Check out our HR Management blog posts or reach out to our experienced recruiting team at Shannon Staffing today!