Kevin Kane:
Welcome to another First Business Bank Podcast. I'm Kevin Kane, and I'll be your host for today's episode on employee retention. Our previous podcast, Employee Recruitment, focused on a variety of specific strategies manufacturers can leverage to effectively compete for talent in what is currently a very difficult labor market. Today we're going to think about things a little differently, and I touched on this toward the end of the last podcast, in terms of the fact that it really doesn't matter how many new workers you can bring into your organization if you're unable to keep the folks that you already have.
Kevin Kane:
So joining us today to share her insights is Beth Aldana, service line leader for operational excellence at WMEP. Beth, thank you for being with us today. Would you mind sharing with our audience your professional experience and background to start off?
Beth Aldana:
Yeah, certainly. Thanks for the introduction, Kevin. And as you mentioned, I lead the operational excellence service line for WMEP, which ultimately encompasses everything from customized employee coaching, all the way through long-term organizational lead transformations for organizations. And my background has been in all in manufacturing. I've been in manufacturing for over 17 years. And in that time, my career has really centralized around developing and leading teams in different ways. So a lot of my background was in engineering, I've also got some experience in operations, worked with several small to mid sized manufacturers in the southeastern Wisconsin region.
Kevin Kane:
Terrific. Thanks, Beth. So by the conclusion of this podcast, we'd like people to walk away from the conversation with an understanding of the key reasons people leave companies, and what management can do to keep more of their employees in place. What do you see as the key factors employers have the most control over? And what should they focus on?
Beth Aldana:
Realistically, there's several factors that organizations do have control over as it relates to retaining employees. And for the purpose of this discussion, I would say the top four factors that would help an organization in retaining those employees, one would be improving the way that you onboard your new hires. This ultimately is an employee's first impression of your organization. It's very important. The second one I would say is engaging those employees once you have them on the team, helping the employee be a contributing part of the team, and make them feel that they're appreciated for what they bring to the organization.
Beth Aldana:
And next, I would say is drive performance expectations. Every day when somebody goes to work, they want to know what winning looks like. And if your company doesn't do a great job of laying those expectations out, making them visible, it's hard for employees to see what their impact is on a daily basis. And then the last factor I'd say that organizations have a lot of control over is really developing your employees. Starting that dialogue very early in their employment relationship with the organization, and then helping support them achieve those development goals throughout their employment with you.
Kevin Kane:
Okay. Got it. So let's just sort of order of operations, take those in sequence and let's start by taking a deeper dive on onboarding. So to start with, can you provide perhaps a little bigger picture context around what some of the challenges are with the onboarding process, and how manufacturers should approach that initial experience for new hires?
Beth Aldana:
Sure. For starters, I can't overstate enough the fact that first impressions matter. If we all think about our careers and our past experiences, we all probably have some great experiences and maybe some not so great experiences. And those all start with that first day at an organization. So if your company doesn't have a well defined onboarding process, you're missing a big opportunity to have an impact on keeping those employees at your organization. So a poll from Gallup in 2021 identified that about only 12% of companies did onboarding well, according to the employees. So if you think about that, that's a huge disconnect between a company's ability to retain employees, based on the first impression that they're giving those individuals when they start with the organization.
Beth Aldana:
So onboarding in general, I like to think of it as the 80/20 rule. About 80% of your onboarding success is really going to be based around about 20% of what you're actually doing. So when you think about an employee's first impression: How personalized is it? How much does this employer know about me? How much are we focused on what I can bring to this organization? A lot of onboarding is really focused on more on the administrative tasks. So we spend quite a bit of time putting together the documents, the policies, the procedures, the job specific training, but we really are missing an opportunity to start engaging that employee from that first time that we meet them, and we're doing the onboarding process with them.
Kevin Kane:
Got it. And so now that you've kind of broken that problem down a little bit, are there some other specific solutions that companies can execute on to make a difference? Something I guess I'm thinking about, Beth, is the virtual work environment. And how does that kind of fit into the employee experience early on? It's a little bit different than pre COVID, perhaps. But any thoughts on that dimension of the issue?
Beth Aldana:
The virtual work environment definitely adds a whole other layer of challenges to the onboarding process. But it's really no different than your typical onboarding challenges that you have. Ultimately, if you're going to have to onboard somebody virtually, it's not the ideal choice, but if that's the way it needs to be, go into it with a plan. Make sure that you have it well defined. Make sure that all those individuals that are going to participate in the onboarding are also familiar with the plan, it's pre scheduled. It's not just left to form itself as things get started. So make sure that you go into it with a plan because the virtual environment can create a whole other level of disconnect for a new employee with an organization, and so it makes it that much more challenging to help them feel welcome and to feel like they're part of the team.
Kevin Kane:
Okay. Beyond that, I guess something else I'm thinking about too is as you're describing, and there may be some additional aspects of this that you'd like to expand on, but one thought or question that I've got in the moment is: Who ultimately is accountable or leads the onboarding effort? Is it the HR function, for example? Or what have you seen in your experience in terms of the owner of onboarding for any particular company?
Beth Aldana:
I've seen it done many different ways, and it can vary widely, depending upon the organization. Oftentimes, the human resource function does take a lead role in a lot of the onboarding. However, if you think about back to kind of that connecting to the individual and helping them really get acclimated to the organization, the hiring manager and the team in which that individual is going to be joining when they start, they really have the ability to have a tremendous impact on that onboarding experience. So I've seen it where HR takes the lead, but I've also seen it where the hiring manager and HR, they collaborate, they come you with a nice solution that addresses all the areas of onboarding, while also helping that individual become part of the team as quickly as possible.
Kevin Kane:
Okay, makes sense. So it takes a village to make the onboarding process a success, not necessarily just one group within an organization. Any other thoughts before we move onto the next factor? Any other thoughts on the onboarding process or best practices that you can share with our listeners today?
Beth Aldana:
Yeah. There's definitely a few best practices, and I've hit on it a few times already. One is to have a defined process. If there isn't a defined process that your organization is using to bring new people on board, chances are everybody's doing it different. And the experience that your new hires is going to be very different depending upon the team that they're joining, what their focus for the job might be. But having something that's outlined and that is trained, and other individuals in the organization understand, will make a tremendous impact on improving your consistency in how well you onboard.
Beth Aldana:
Another good practice is to somehow have a measurable way of determining what success looks like for that onboarding process. For example, if it's a certain production rate or a certain output that an individual has to achieve, set a target for yourself and then measure against that because that's going to help you understand if that individual is able to get acclimated to the team, to the company, to their new role, and really become productive for you as an individual, which ties into engagement in a lot of other things that can help that employee's overall experience with the organization.
Beth Aldana:
And the other best practice I would like to bring up is to always look for feedback. So if you have an identified process or a system that you're following, make sure that includes some sort of feedback loop, and get the feedback from the individuals going through it. So as you have new hires going through the process, there should be some interval checks ins as: How is it going? What can we do different? How would you improve this process? And all of those things are going to help you really bolster and improve the way that you bring new folks in.
Kevin Kane:
Perfect. That really makes a ton of sense. And so you just touched on the second aspect of this, so let's shift the conversation a little bit. Many companies, including First Business Bank, talk a lot about employee engagement. Can you tell us a little bit more about what that means, why it matters? And we can dig into that a little more.
Beth Aldana:
Absolutely. Employee engagement is really a measure of how much employees are involved on a daily basis, how much they understand the purpose of the organization, how they impact the organization's performance daily, and why it's important is employees being engaged is really what's going to drive your business success long-term because the more that you have individuals involved in providing ideas, coming up with solutions, helping drive those business results, that's just going to make your organization stronger on an ongoing long-term basis.
Kevin Kane:
And are there any issues around this retention factor, I'll call it, that are unique to manufacturers? So is employee engagement in the manufacturing environment, in your opinion different than it might be in a service business, or a distribution business, or other segments beyond the manufacturing aspect?
Beth Aldana:
It may not necessarily be unique to manufacturing, but what I have found is that a lack of engagement in manufacturing is oftentimes a self perpetuating cycle. And by this I mean if a manufacturing organization has a high level of disengagement, it's going to continue that cycle until the organization creates an environment to stop it. Think about it from a firefighting perspective. When people are so focused on surviving day to day with the challenges in front of them, it doesn't give employees an opportunity to provide ideas and solutions that might have a longer term impact, and eventually, they may stop bringing forth those ideas because they feel that they're not being heard, and therefore, resulting in ongoing firefighting. It may not be something that's unique to manufacturing, but it is definitely something that I've observed many times in my career. It links directly to how engaged employees are.
Kevin Kane:
Okay. And something else I'm thinking about now too is the ultimate measure of an employee that's not engaged is that they leave the organization. But before it gets to that more dramatic result or outcome, are there any sort of, I guess I'd call it warning signs or signals, in the context of a manufacturing firm that might suggest, besides some of the things you talked about, which is they're not bringing forth new ideas? But are there other measures around manufacturing performance that might suggest that there's a problem that perhaps can be solved before it results in attrition?
Beth Aldana:
Depending upon how widespread the issue is with a lack of engagement, it can definitely show up in many of your manufacturing KPIs. Your level of quality, the customer service, which your customers are reporting back to you, productivity, so all of those, if they're not trending or tracking the way that they could be, or that you would like them to be organizationally, you might want to take a step back and ask the question. Why is that? And then dig a little bit deeper and start to get some feedback from individuals on the floor because typically, those are a result of something that's going on.
Kevin Kane:
Okay. Yeah, I like that. I mean, certainly, we use again at our company, we use as one way to gauge engagement is an employee survey. But that's an annual event, so in between, there are things that could be going on. And I like the way you just described manufacturing KPIs and other measures that aren't perhaps directly perceived as a reflection of employee engagement or a symptom of disengagement. That makes a heck of a lot of sense. Any final thoughts on how to strengthen or improve staff engagement? I think you've touched on this a little bit as we started to talk about the topic. But any other ways to just get on top of this and build a more engaged team in an organization?
Beth Aldana:
I would say one way to definitely start is to have a process or method for gathering some employee feedback. And Kevin, you had mentioned employee surveys. That's definitely one option is to get some feedback at some interval from employees to understand what they see some of the biggest challenges in the organization being. Another thing is you can develop a formal CI program, continuous improvement program, which we work with companies with on a regular basis. It's putting some infrastructure in place so that individuals, team members, can ... They have an avenue to provide that feedback and they can help make an impact. Daily team meetings, huddles, just general touchpoints with your team to have a two way dialogue, understand what's going well, what's not going well. What can we maybe be doing differently?
Beth Aldana:
And most importantly, if you do have a process in place, is to act upon it. So if you're getting some feedback from employees, the worst possible thing you can do is not act on that feedback. And not that you can implement everything that's provided, or solve every problem that's brought forth, but there has to be some action if people are providing some feedback on what they think could help improve the organization, even if that action is a review of it and determining what the next steps are.
Kevin Kane:
Yeah. That's awesome because everything you're describing, we talk about here as well. In other words, to your point, you ask somebody for your opinion, if they provide that opinion, provide feedback, and there's no outcome, there's no effort to try to prioritize and make improvement, then folks, they check out. And then the next time you have a survey probably, the response rate is quite low, or the reaction to things is just not happening, so appreciate your insights on that topic, Beth.
Kevin Kane:
So let's move on to the third factor that you mentioned at the top of our conversation, which is driving performance management. This one's very interesting to me in terms of how does ... My thought I guess, or my question is: How does creating accountability keep a team together and mitigate attrition? It's not quite as obvious maybe as the first two factors that you walked us through.
Beth Aldana:
Well, one way that you can create accountability by driving performance is that ultimately, you're giving your team a target. You're giving them a goal so that when you're, on a daily basis, when everybody's working hard to do their tasks, they know what success looks like on a daily basis. They know what done looks like. And they know what their contribution is doing for the team. And so really, it's all about creating those expectations and being transparent with it, and then also making it a habit of revisiting what those expectations are on a regular basis. And if it's in production, a big portion of that is daily touchpoints. How did I do today? How did we do today as an organization? So that you can respond more quickly than reading the results maybe a month later. But to help folks know what they're contributing on a daily basis and if they're succeeding, you have to put the goal out there and you have to help them understand where they are in relation to that goal.
Kevin Kane:
Okay. So Beth, you've started to kind of establish this framework around driving performance management in terms of having clarity around the goals for the team or the individual, measuring that, providing feedback on a timely basis so that they understand how they're doing in relationship to those key goals. Talk to me a little bit about ... Because we haven't really touched on rewards or other things that you would say, "Okay, if you're getting things done in the way that we need them to be done." Is that part of the equation to keep folks motivated? Is it simply good enough to say, "Okay, I'm doing well in relationship to these objectives," and that's just good enough? What are your thoughts on that?
Beth Aldana:
The rewards definitely have to be linked into performance. And the thing to think about is rewards look different for everybody. Incentives look different for every individual on your team. But the important part is that you celebrate that success and you show the appreciation to your employees. And once you get to know the individuals on your team well, you'll start to understand what different folks see as a form of appreciation. Some may look at it more as a financial, some want just more of a show of appreciation from their leadership team. But ultimately, if you have goals and targets and the team is meeting them, somehow that should be tied back into a reward program. And as I mentioned, the rewards could look very different for each organization, for each team, even for each individual.
Beth Aldana:
What works for one group may not work for another group. The important thing is celebrate the successes with your team as you achieve them. And if you do well, move the target, so make it a little bit more challenging for yourself next time, to keep moving the group forward.
Kevin Kane:
There you go. I like it. So the final topic for today around retention is developing employees. So two questions to get us started on this. Why is it important to pay attention to employee development? And how do you actually define it?
Beth Aldana:
So to answer the why portion, why it's important is because employee development is very closely linked to employee retention. If you think about the positions that you've held throughout your career, and maybe peers and other experiences that you've had, if you feel that you're not advancing, or you're not developing within the career or the job that you have, there's a strong probability that you may be a little bit disengaged, and maybe are looking for other opportunities. So employee development is most definitely important when it relates to, as it relates to keep employees on your team, growing them and developing them.
Beth Aldana:
And employee development looks very different for everybody. But ultimately, what it means is understanding what your employees, they bring to the table, what their strengths are, what their aspirations are as it relates to growing themselves personally and professionally, and helping support them achieve those goals throughout their career.
Kevin Kane:
Okay. And how much of that is ... In way to me, I'm thinking about sort of skill development. I know that's maybe more of a narrow kind of way of thinking about this. But is it up to each individual to figure out what skills they need in order to be successful and communicate that to their team lead, or whatever the chain of command is there? Yeah. How do you think about that aspect of it?
Beth Aldana:
It's definitely a two way street. I mean, the individual has to be interested to bring forward what it is that the strengths they have, areas that they maybe want to develop in, but even more important is that an organization has to create an environment that allows people to do that, that allows people to feel comfortable in coming forth with their developmental needs and creates an environment where they can actually achieve those. And so it's definitely a two way street when it comes to employee development. But I would say for starters, an organization does have to create that atmosphere so that it opens the door for your team members to come in and start that dialogue.
Kevin Kane:
Okay. Got it. Maybe this is more of a question, Beth, about your own professional journey and the fact that you have done some different things with different companies. Tell me about that. How did that sort of play out? What sort of support were you given that allowed you to move into some different areas at the companies you've worked for?
Beth Aldana:
Yeah. It was very different with each of the organizations that I worked for and continue to work for. But ultimately, for the most part, the organization would outline what some of those potential opportunities were. But as an employee, I realized I had to be the one that actually went forth and expressed the interest and took the initiative as well. So I've had a couple different experiences throughout my career, but I would say in general the biggest thing that I've learned from a personal perspective is that I have to be willing to ask for what I want. Whether or not the organization supports it, that's a whole different discussion. But as a starting point, the individual has to be willing to put themself out there and express what those needs are.
Kevin Kane:
Okay. Yeah, and I appreciate the way you described it as well in terms of it is a two way street, meaning the employee has to own their development, has to communicate those interests and aspirations, and at the same time, the company needs to be listening to that, and to the extent that there are individuals that would like to progress either in a linear fashion or across the organization into other aspects of the business. They need to be prepared for I guess internal training, being willing to support education, or other skill development programs that are outside of the organization. Is that kind of the right way to be thinking about it?
Beth Aldana:
Yeah. Absolutely. And if for some reason, it's just not a match, that's a decision point to figure out because obviously, it has to make sense for your organization as well in terms of what the developmental request is and the needs are. But once you understand that with the employee, to your point, Kevin, coming up with a plan to achieve that, whether it's internal training, external training, job shadowing, whatever that might be. How do you help that individual achieve that development goal?
Kevin Kane:
Okay. And Beth, based on what you've seen, is that harder to accomplish in a smaller company? We at our organization, we serve companies, manufacturing firms are a big part of our client base, and we're focused on the smaller end to the middle end, if that's the way to describe it, of the middle market. From what you've seen, is it more difficult for a smaller company to drive employee development and create those opportunities? Maybe that's not really the right way to think about it, but I'm interested in your opinion on that.
Beth Aldana:
Well, the way to look at it is the ladder might not be as tall for a small organization because there's just not space to go vertically. So a different way to frame it is to look at expanding horizontally. What are some different responsibilities, some different skills that employee can maybe development that makes them more valuable to the organization, helps them support the organization in different ways? And that's definitely a common challenge that smaller organizations have, and it's all about how you frame it and how you work through it with the employee because ultimately, growth isn't necessarily about climbing the ladder. Growth is about developing your skillsets and your capabilities, and what you're able to do for the organization. And that can come in many shapes and forms, and oftentimes, it can come horizontally, or just taking on additional tasks, additional responsibility in smaller organizations.
Kevin Kane:
I really like the way you just described that because one of the things we hear from clients and prospects is that the external environment for a manufacturer is constantly changing. And we talk about a flexible labor force that can move into different newer roles as the needs of the company evolve, and as competitive conditions change, and even as the process within an organization changes. So in a way, what you describe in my opinion is that kind of supporting more diverse experiences within an organization, even if it's a smaller company, is good for the employee. It's good for retention. But it also creates maybe optionality for the company to adjust or pivot, depending on how things are changing. Does that make sense?
Beth Aldana:
Yeah, that definitely makes sense. I mean, it's just like complex manufacturing these days, where you have small batch, large variety. You have to be flexible. And to do that, your folks on the shop floor have to be trained in a wide variety of processes, not just be a mile deep, inch wide, mile deep on a couple processes. How do you get them to have more skills that can spread across the board? And it applies on the shop floor and in the office. But think about that from employee development. To be flexible and to meet the future needs, which I don't think any of us know what those are at this point because the world's changing so fast, it's really having the ability to have a flexible workforce, and develop skills in areas that can support that.
Kevin Kane:
Yeah. That's awesome. And maybe that's a great way to kind of wrap up because again, especially over the last two years, we've heard about so many companies that have had to shift and adjust and reassess their strategies. And their own customers are changing. And how do they adapt and try to meet those changes in customer needs? And so the intersection of employee development and the versatility that introduces into your organization, small, medium, or large, can be a competitive advantage it seems to me. Well, Beth, thank you so much for sharing a ton of great ideas today. Any thoughts on retention strategies beyond the four key factors that we covered today?
Beth Aldana:
The final thought I would have is to just think back through your own experience in your career. You've probably had some great experiences and you've maybe had some experiences that weren't your favorite throughout your career. And really understand why those experiences were what they were for you. And think about the great experiences. How do you bring that to your organization? What is something that you can take from what you've learned in your own past and apply that to your current organization to help make it a place where not only you want to work and thrive, but where other team members maybe want to work and thrive?
Kevin Kane:
That's great advice and pretty simple, which is what makes it so powerful. So thank you again, Beth. So our final podcast, we've had the first there, our final podcast in the series will focus on redeployment. And we just sort of touched on that in a roundabout way toward the end of our conversation here. So to our listeners, we hope that you'll join us for the final, the fourth installment of our series here that we're working together with WMEP on. And again, that will be redeployment.
Kevin Kane:
As always, we'd like to thank WMEP for their support and our partnership with them, and thank our audience members for listening. Be sure to visit us at firstbusiness.bank to explore the other resources that we offer business owners and leaders to help them succeed. And we invite you to experience the advantage with First Business Bank. Thank you.