QUESTION: This reader’s question asks about “how to re-engage an aging workforce?” I’m paraphrasing several issues his company is facing, e.g., people just getting by; excessive absenteeism; employees not being replaced due to excess capacity so they don’t understand why they must improve when new capacity isn’t needed -- markets are flat for the last three years; expected to do more with less; weekly meetings that discuss the same issues with no resolution due to lack of resources, and a spending freeze.
ANSWER: One could write a book speaking to all of the underlying causes and possible solutions. But in the 800 words or so I have here, I’ll share some experiences that may be helpful. To one degree or another, these issues are common to a broad cross-section of U.S. industry that is still working to recover from the Great Recession. The aging of the baby boomers has been long forecasted, and the shortage of skilled workers is already surfacing as a constraint to manufacturing companies for engineers, scientists, skilled trades, electronic techs, certain machine operators with special skills and so on.
In contrast, those performing manual labor and running outdated, legacy equipment are finding themselves disadvantaged. That won’t change until the company rebuilds basic capabilities that their competition is using to grow market share. But in this particular case, my impression is that the factory in question does not have an operating model that will result in success. A resurgence in the market won’t change the underlying issues in the factory that apparently have been building over a long period of time.
Here’s what I’d do:
• Recognize around the leadership table that workers are behaving the way they’ve been trained by their leadership, past and present, to behave over a long period of time. As a team are they ready to face this head on? If so proceed down this list. If not, stop here and live with it until the plant closes.
• Plan and execute a series of all employee meetings where the most senior leader of the facility delivers the same script with all groups on all shifts. (A script is important to ensure that every person in the business hears exactly the same message. No winging it!) The script should include a short-version of why you are where you are and do a mea culpa for leaders past and present who have not done their jobs helping to keep the business competitive. Acknowledge that most employees, both salaried and hourly, past and present, have actively participated in creating the culture that exists in the business. Communications have been poor and there has been little if any engagement on the part of the leadership over a long period of time. The outcome of this chronic dysfunction is that hourly people began checking their brains at the time clock and picking them up on the way home since their leadership stopped listening or otherwise involving them.
• In these meetings cover a number of these topics below which the plant leadership team will face head on after appropriate sign-offs from their bosses so there is support and zero surprises for all:
• Rightsize the business based on the best market and customer forecast possible for the next six to 12 months. Too many companies elongate this process thinking bluer skies are just around the next bend. Assume they are not. Use the forecast to decide. Don’t put your people through the torture of worrying every day if they’re going to be next -- I liken this approach to cutting a dog’s tail off one inch at a time. Set the new baseline capacity and size the operation accordingly.
• Work with your business HR and finance functions to offer an early retirement package for hourly and salaried workers who are age (pick your number) or older. Don’t miss the chance to include as many malcontents as possible to get the bad attitudes and behaviors out of the building. In a union shop be sure to get their leaders involved early. Discuss openly the history of non-productive relationships with leadership and the union and leadership’s commitment to change. Work with HR/labor relations and the union to be sure their leaders are on board and willing to change as well.
• Reset the deck on the new leadership expectations re: creating/updating/following standard work processes.
• Make it clear that the absenteeism policy applies to all. If someone is no longer employable due to health considerations, work with them to explore a disability solution. If it’s simply a question of excessive absenteeism that makes them unemployable, then execute the policy to the letter for everyone. Consistency is critical. Remind all employees what the policy is so there aren’t any surprises later when it is enforced.
• Have your team determine what cost structure must be in place for the operation to be viable based on the forecasted volumes and explain/quantify that need to all employees. They need to know that the plant has to get better -- probably much better -- if they want to retain their jobs longer term and if there’s any chance of growing jobs into the future. At this juncture the survival of the business is at risk.
• As the low-hanging cost improvements begin to deliver, be sure and plan some ongoing training of how the company will be managed in the new paradigm as it relates specifically to hourly folks, supervision, et al.
The circumstances described in the reader’s question makes it pretty clear that this is a complete turnaround kind of project. The business model isn’t working, and the relationship with hourly employees must undergo major improvement. We can be sure that there are lots of underlying issues here that we simply cannot address in this space and without more information. But there are a few key takeaways from the situation as described:
• For management to have any chance of regaining lost credibility, it starts with them looking their people in the eyes and telling them the truth about the state of the business. Get out on the shop floor and engage the workers one-on-one or in small groups. Have open discussions with an honest exchange. Consider doing a formal employee attitude survey to get unfiltered feedback. Find out what and where the most problematic issues are. Then deal with them. Follow up relentlessly and help solve the things you can, and explain why there are others that you can’t. Most of all, be truthful. Earning the employees’ trust and developing management credibility is huge.
• Once the right-sizing has been completed, recognize the frustration and hopelessness that has permeated the culture, and ask for everyone’s help in changing it with better processes and an attitude of ‘how can I help?’
• Address the need for change head on. As W. Edwards Deming said, “It is not necessary to change. Survival is not mandatory.”
Larry Fast is founder and president of Pathways to Manufacturing Excellence and a veteran of 35 years in the wire and cable industry. He is the author of "The 12 Principles of Manufacturing Excellence: A Leader's Guide to Achieving and Sustaining Excellence." A second edition is planned for release in 2015. As Belden’s VP of manufacturing Fast led a transformation of Belden plants in the late '80s and early '90s that included cellularizing about 80% of the company’s equipment around common products and routing, and the use of what is now know as lean tools. Fast is retired from General Cable Corp., which he joined in 1997. As General Cable's senior vice president of operations, Fast launched a manufacturing excellence strategy in 1999. Since the launch of the strategy, there have been 34 General Cable IndustryWeek “Best Plants Finalist awards, including 12 IW Best Plants winners. Fast holds a bachelor's degree in management and administration from Indiana University and is a graduate from Earlham College’s Institute for Executive Growth. He also completed the program for management development at the Harvard University School of Business.