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Manufacturing in Tough Times: 5 Keys to Keeping Your Key Employees

Bad times come and go. Don't let the inevitable variances disrupt your approach or keep you from doing right by your workers.

Manufacturers finally got a break in January, but it wasn't much of one. Both U.S. and Canadian indexes rose last month but remained below the 50 mark that would signal renewed growth. Months could pass before we get to that point.

How bad is it today? According to the latest figures from the Institute for Supply Management (ISM), economic activity in the manufacturing sector improved to 48.2 in January. The gain breaks what had been an awful streak of declines -- from 50.1 in October, to 48.6 in November, to just 48 in December. Economists blame a strong dollar, weak commodity prices and low demand for the sluggish recovery in the U.S.

Canadian producers may be better positioned. The RBC Canadian Manufacturers Purchasing Index (PMI) jumped 1.8 points to 49.3 in January from a survey-record low of 47.5 in December. As good a sign as that is, it still marked the sixth consecutive month of contraction for the country's manufacturing industry. Factory managers should prepare as if many more bad days are ahead. The key is figuring out how to do that without gutting operations and losing key employees in the process. Here are five ideas:

1. Ask what they need. Sounds simple, right? Not so fast. Recessionary markets crimp resources, which can make it difficult to grant raises or other perks. Here, you aren't so much trying to be like the genie in the bottle who grants three wishes, but rather a partner. Encourage employees to create and share their long-term hopes. Whether it's new equipment, more time off, a raise or some other change that would make the job easier, listen and document. You may run across one or more great productivity-boosting ideas worth investing in.

2. Find out what they want. Your employees are human; treat them as such. Listen not only to what they need but also what they want. In doing so, you'll signal that you care as much about their well-being as you do factory profits. Also, don't think that listening means you have to make good on every request. Connecting an employee who's worried about retirement with a highly recommended financial planner can be just as meaningful as any paid-for perk.

3. Be 100% transparent. Don't keep employees guessing! Instead, tell the truth about what's happening with the factory and explain the moves you're making to improve business conditions. Then, solicit feedback and consider all of it. Employees that feel heard are more likely to be engaged. They're also more likely to wait patiently for benefits, bonuses, and other perks to return.

4. Recognize outstanding work. Employees work smarter and more productively when they know management will recognize and reward a job well done. Collectively, the impact can be huge. Research we've compiled at Rideau concludes that employee engagement, productivity and customer service are, on average, 14% better in companies whose managers regularly recognize great work. The reverse is also true, of course. No one wants to work at a struggling factory run by tyrants.

5. Reward everyone, not just your top performers. A particularly toxic management theory holds that you should spend the vast majority of your time on top performers since they're the ones most likely to deliver excellent work. So what if that's true? In focusing only on your top players you'll miss everyday opportunities to recognize workers who stumble upon potential breakthroughs. Don't let that happen. Instead, take the time to find, encourage and reward those who achieve unexpectedly. After all, they're the ones most likely to become your future top performers.

Bad times come and go. Don't let the inevitable variances disrupt your approach or keep you from doing right by your workers. Ask what they need. Find out what they want. Be transparent about the state of your factory. And most of all, recognize and reward outstanding work wherever you find it. You can't single-handedly reverse the effects of a recessionary market, but you can make it easier to navigate by caring for  -- and keeping -- your best employees.

John Mills is executive vice president of Business Development at Rideau Recognition Solutions, a global leader in employee rewards and recognition programs designed to motivate and increase engagement and productivity across the workforce.

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