How to manage employee retirement

Randy Heisler, vice president of Life Cycle Engineering, a consulting firm serving private industry, public entities and government organizations, chats with Amanda Del Buono about retirement and how manufacturers can better prepare for their retiring workforce and incoming new workers.


Amanda Del Buono: Welcome back to Manufacturing Tomorrow’s Workforce. I’m Amanda Del Buono. Just want to remind our listeners again the deadline for nominations for the 2020 class of Influential Women in Manufacturing is quickly approaching. So, if there’s someone you’ve been thinking about nominating, get over to, and submit your nomination before March 31.

So, today I'm joined by Randy Heisler, vice president of Life Cycle Engineering, a consulting firm that serves private industry, public entities, government organization, and the military. Randy and I are talking about retirement and how manufacturers can better plan for employee retirement. Thanks for joining us today, Randy.

Randy: Thanks for having me.

Amanda: So, we hear a lot and read a lot about the impact that retirement is having on the manufacturing workforce, creating a skills gap, brain drain and all those other fun buzzwords, but how do you see retirement actually impacting the workforce?

Randy: Well, Amanda, there's no question that it's having an impact. Companies are literally scrambling to find qualified people. As you know, at this time, the unemployment rate is very low, certainly a factor, then in the competition for the resources out there that are looking for a move or looking for employment, is very stiff. It's becoming more and more difficult to find people to replace those that are retiring. Companies are trying to come up with ways to attract talent depending on the industry. If it's a heavy industrial environment, let's say, not a behind-the-desk type of position, people have a lot of choices. And, those folks are finding it really difficult to find somebody that wants to get dirty every day and that may not think that's for them sometimes until they get there. But, it certainly is a challenge.

On the employee side, there's often no one to learn from. I mean, it's an impact to someone that comes in that they're starting from scratch. And, if organizations have allowed the retirement train to get ahead of them, people have to come in and try to learn those jobs or those positions at the time of hire, which increases the stress, kind of like diving into the deep end.

Amanda: Right, right. It's bad enough, especially when you have young people coming out of university or what have you, coming in, and they're already trying to figure out their new job and being a professional, and to add on there, nobody to learn from, it's not helpful.

So, whether people are retiring in droves or it's just one or two people at a time, organizations should have a plan in place. But, what challenges can manufacturers be expecting when their longtime workforce retires as they set in place a plan? What should they be anticipating?

Randy: Well, it's like I said a minute ago. New hires coming in, depending on where they've come from, whether they're new to the workforce, just simply don't have experience. They've not been there and done that, in many cases, it could be their first real job, right? But, just as an example, let's say on the maintenance side of things, in trying to maintain equipment, you've got someone new that comes in that, like I've mentioned that there's no one there, or no one left, or not enough people left to teach them how to do things, so repairs take longer, right? So, companies that we're dealing with today, that is one big complaint. It's like, "Gosh, we've lost all the experience. We've got good people, okay, but they just don't know how to do it. It's their first time in making a particular repair," or something of that nature. And, it takes longer. Just like, you have professionals out in the world that seem to make things look easy and jobs go quickly, where someone that has not done it before can take two or three times as long. So, organizations are challenged with that for sure.

Also, let's say on the operations side, in operating the equipment as an example, variability creeps in. You've got folks that are just learning how to run the equipment and may bring their own previous experience, or even in, like I said, that lack of experience creates variability. So, you don't have, that's a term we use, that they may not have standard work in place or are not familiar with what that standard work might be. So, they're doing their best but those create some variability in the operation, which, at the end of the day, can affect the output and quality, things like that. So, mistakes increase. People that we work with are dealing with that quite often is that they can't get what we call first-pass yield because, simply, people are making mistakes. And so, they have to work through that over time, and over time, they get there. And, like I said, they get good people but they just haven't done that particular thing before.

The other unfortunate thing is that, oftentimes injuries increase there. People are saying, "Gosh, our safety performance just isn't what it used to be." And, once again, it's from that lack of experience. So, that one can be a real major challenge for folks. I think one of the real challenges, though, is to capture the knowledge of those senior folks before they retire. And, it's hard to believe, and I think it depends on the situation, but people aren’t always willing to share what they've learned. Maybe on their way out the door, they feel more comfortable sometimes, but, you know, their knowledge has often been a safety net. That, you know, the old adage that knowledge is power. And so, yeah, they sometimes keep that close and aren't super willing to share it.

Amanda: Right. But, what are some strategies that you've seen or do you have any suggestions for how manufacturers can either foster that communication, share that knowledge, maybe, better train these new people? Or what could they be doing to help ease this transition?

Randy: Well, I think in my experience, I'm on some different associations, and committees, and so on within some different industries and associations, and this topic is always a part of the discussion. And so, I'll give you a combination of things that others are doing as well as, maybe, some of my own opinions or experiences.

But, one of the No. 1 things that people don't spend enough time on is succession planning. You know, we typically know, okay, where we're going to get hurt when a particular person leaves or we have too many people leave in part of the organization. And, we haven't been, what I'm going to call proactive, and done really thoughtful succession planning trying to get ahead of that knowledge drain, and to pick, in a sense, the people in the organization that may replace others. Or, if we get back to that old method that some people are actually getting back to where they have apprenticeship programs, that creates the framework for knowledge sharing and succession planning, really, getting people into the workforce learning from the more senior folks. But, it requires an investment, and that's the challenge for a lot of folks is that, "Oh, gosh, we can't afford just to hire additional people, right? We only have the budget for X number of folks." But, some folks are getting back into the apprenticeship programs. I'm a huge believer of it. It's really how I started my career, in learning from someone else. And, it makes a huge, huge difference so that when someone does leave, there's someone right there behind them that has some experience that they've already learned.

And, another thing that folks are doing, and this one, you know, always seems to challenge, a lot of people talk about it, and maybe sometimes it's where they're at in the country, geographically, and so on. But, partnering with local trade schools. And, just to get a little deeper into that a lot of times they say, "Well, we've got trade schools, and we contact them and try to see who's graduating from those," and so on. But, you know, I call it really being active and working with those trade schools on what your upcoming needs are. Because, what folks are learning is that just having a contact with a trade school, they're not getting on the front side of helping the trade school understand your need so that they can make sure they tailor the education.

Amanda: Right. I spoke to somebody earlier who had mentioned something in line with that where it's like, the companies need to be a good customer to the schools, too. You need to tell them what you want, tell them what you need, so that the schools can train the students appropriately, right?

Randy: That's exactly right. So, people are understanding that a bit more, I think, than they did in the past. And a part of that is going out to those trade schools, talking to those students, and in a sense, marketing your company as a great place to work. Okay? Because they don't know, especially the younger workforce just hasn't had that experience; they may not know much about manufacturing or industrial environment. So, you have to get out there and market it and present what your company does. Just try to create some awareness and desire for them to go down that path and go to work in your environment.

The last item around this, I think, is internships. And, that's certainly common out there. They get to see what it's like and get some first-hand experience. And, those are typically pretty expensive, but it is an approach that people take, is trying to get into internships in place. What's the appetite for those folks? And, it gives you a chance to, kind of, test the talent, right, and test the individual on whether they're a fit for your organization.

Amanda: Right. Well, I've noticed, at least, in some of our columnists' work, a real strong desire for older professionals to, kind of, pass along their on-the-job knowledge, like you were talking about before, but there are people who don't necessarily have that inherently. How can companies help encourage and foster that knowledge exchange from the experienced employees to the lesser experienced employees? Do you have any suggestions for how they can do that rather than waiting until somebody is about to retire and then trying to train people up right away?

Randy: Yeah, I do. I guess, maybe, a little bit it's one of my frustrations that organizations that just wait too long and let that retirement train get ahead of them. But, like I mentioned earlier, you know who the people are in your organization that you're going to have to replace. And, get your head out of the sand and take action. You know your future or your company's future could potentially depend on it if you lose too much knowledge. I had mentioned the succession plan is to take action on that, and be very forthright in working that succession plan. And, I guess in a succession plan, really, starts to look at the people that are already in the organization that may promote into, you know, that absence, that role that is walking out the door. So, take that succession plan seriously. Another method is to create, if you don't already have one, create a knowledge repository for folks. And, even here at Life Cycle Engineering, we've created some web-based orientation tools that have just been pretty powerful to folks as they're coming in, feed up that, learning. So, if you have lost knowledge or you're just not in a position to get people face-to-face, that can be a real winner, is to get some of that knowledge out there. And, you know, proactively engage those senior employees, those ones like you mentioned that they may want to but there's not a device, there's not a method, or a process for them to share their knowledge. And, you know, I think sometimes they sit there going, "Gosh, when are they gonna ask me, you know, or how can I share this information?" So, it's getting, in some ways, old school-wise, getting their knowledge on paper, right, or getting it in a system for others to use as they come in.

Another thing that folks are doing is using them. An example, I guess, would be to create operational SOPs that, in a sense, are getting that on paper. Best practice making pass, creating training videos. There's a great technology out there today that in... I don't know if you're familiar with HoloLens, that a senior employee can go out and perform a task and the entire task is recorded. They can talk through it essentially creating in-house YouTube videos of how to do particular tasks out in the manufacturing environment. That can be very powerful. Develop a mentoring program. Once again, the folks that are already part of the company that could well replace that person is to engage the senior individual in being a mentor for some of the younger folks, and that can be very advantageous. Probably the last thing that we're seeing is, if you have to, right, if the train has got ahead of you, is to bring back some of those retirees to train the new workforce. Right, that can be a win-win. So, they may want to work still a little bit and enough to give you that advantage of having them come back and share what they know.

Amanda: Right, take advantage of the fact that people are wanting to work longer now and may not want to retire completely right away.

Randy: Exactly, I think people are jumping more slowly into retirement these days than they may have in the past.

Amanda: Yeah. Well then, it seems inevitable that as you have one generation retiring, you have a new generation coming into the workforce. Have you noticed or do you have any advice for management who are, maybe, struggling with managing one workforce that's got a foot out the door and then another one that's a little bit, they're green, they don't have the experience yet? I would presume that would put some challenges for the management. How do they deal with that, do you have any suggestions?

Randy: Oh, there's no doubt about it. Just as an example, 60% of millennials are looking for new career opportunities, okay? Which, you know, I compare that to folks like myself that, as we got into our career, right off the bat, we weren't thinking about the next job, okay?

Amanda: Right.

Randy: We tended to be those long-time people that had allegiance to the company and so on, and we were just a different culture, and millennials think differently. I'm using them as an example here, and you have to manage that. And, they simply come to work with a different, not a bad mindset. I'm not throwing them under the bus, it's just, they think differently, so you have to manage that at the same time you're managing the more senior folks.

Millennials are looking for completely different work experiences and benefits. You know, you've heard of the Googles and so on out there that have all of these, let's call it the daily perks, okay, that people are looking for today that just wasn't even in anyone's mind years ago, but they look for more of a work-life balance. Gallup, who you may be familiar with, has done some studies around it, and with the millennials, you have to be more upfront in addressing what their priorities are, okay? Treating them almost like a customer, okay? Sounds strange but people are finding that to be true, and promoting social values of those folks, prioritizing career growth, right? Understanding or helping them understand that, that is important to you, or as important to you as it is to them, and then providing frequent feedback, okay? Folks are just looking for different things today, and I guess, it goes back to the competition as well as that you have to be aware of what others are offering, right? In terms of those benefits, in terms of off time, those perks, and then even, maybe not as new as other things, but the idea of working from home, right? So, you're managing, sometimes, two different types of people when you look at comparing the baby boomers to the millennials. So, it is definitely a challenge, it's a real thing. A lot of people out there are talking about it, trying to figure it out.

Amanda: Yeah. Yeah, that makes a ton of sense. Definitely a different world, you know, between the two generations, and how they work, and what they're looking for. And then, of course, staying competitive.

Randy: Oh, I'm sorry?

Amanda: No, well, just staying competitive in the manufacturing hiring market today is important, you know?

Randy: Oh, there's no doubt it. People have choices and as a company or organization, you're always after the best people. And, in today's world, it makes a difference what you do and how you handle it in order to get the best.

Amanda: Yeah. I guess, you know, we talked about how companies should be having a longer-term view when it comes to the workforce. So, what should the long-term view be for companies when it comes to workforce turnover and managing new incoming workers?

Randy: Well, I think it's in the question, of sorts, is companies need to take the long view, anticipate what that turnover is going to be, right, measuring that. And, most companies do, they know their turnover rate, but they don't always take it down to the individual to anticipate that, like I mentioned before. Today's workforce changes jobs multiple times, manage that reality, it is going to happen. They're not going to walk in and stay here. So, it becomes where, you're not just dealing with folks that have been there a long time that are retiring, you're dealing with folks that have been there for a shorter period of time but leaving, right, and, their knowledge is walking away. And, in many cases, it's a frustration for folks that say, "Gosh, you know, we trained them and then they left," right?

Amanda: Mm-hmm.

Randy: But, you know, you don't have that choice, you have to train people. And, you know, you have to market your workplace, I think I mentioned that already, as great place to learn and stay. You know, our company, as an example, is in something where you're in a contest of sorts around the best place to work. And, in our case in South Carolina, we've won that award, I think 13 years, or we were in the top 10 in the last 13 years running.

Amanda: Oh, wow.

Randy: Yeah, that has people looking at your website or at your company saying, "Gosh, what is so good there?" I think we have as many people looking at our career page as we do on our services. So, that can make a difference so that's something that folks can do.

But, like I'd mentioned, I call it almost, you know, the need to develop a perpetual plan, right, that can be used over, and over, and over, not only with the folks that are staying a short time but those who've also stayed a long time. I guess the bottom line for me is, as a company, organization, whatever, it is very important to foster a culture in your organization that makes people want to work for you. And, that can make a huge difference. So, to me, that's the bottom line.

Amanda: Right, right. Well, thank you so much, Randy, for taking some time to talk to us about this, and help our listeners better manage their retiring workers. It was a pleasure having you on today.

Randy: It's been my pleasure. Thank you so much.

Amanda: And thanks to our listeners for tuning in today. Stay tuned for the next pod on March 25, when I’ll be discussing manufacturing’s reputation and how to attract young workers with Terry Iverson, founder of Champion Now and author of Finding America’s Greatest Champion: Building prosperity through manufacturing, mentoring and the awesome responsibility of parenting.

For more, tune in to the Manufacturing Tomorrow's Workforce podcast.

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