COVID-19 inflicted an undeniable impact on every industry around the globe. The supply chain industry faces increased prices, decreased resources and a consumer landscape that is more demanding than ever, as many companies implement operationally taxing services such as same-day shipping.
For generations, supply chain companies have survived by analyzing metrics, hitting targets and improving efficiency – by nature, the industry finds success in leading with quantitative data and results. However, the changes wrought by COVID-19 may not be solved just by focusing on quantitative data and profit margins. What we are seeing more and more is that over-indexing on numbers makes it easy to overlook the significant role that people play in the success of organizations. This oversight can lead to the costly ramification of losing key team members who feel undervalued and unimportant.
Aside from knowledge, perspective and experience, when good employees leave an organization, Gallup reports that the cost to replace them can range from one-half to two times their annual salary.
The bottom line is that great people make great companies and rising to meet the needs of an organization’s workforce will ultimately minimize costs and maximize gains.
While the idea of reimagining company culture to ensure workforce longevity may seem daunting, the cornerstone of successful talent retention efforts is investing where it matters - in culture, in people and in ROI.
Invest in Culture
COVID-19 had a significant impact on company culture by sparking phenomena such as the “Great Resignation,” the surge in hybrid and remote work positions and offering people the opportunity to evaluate how their work positively or negatively affected their lives.
Today, many companies realize that their company culture has been left in disarray and is unable to meet the new standards and expectations of the workforce. As a result, these organizations are attempting to rebuild their cultures for this new reality. In an effort to establish not only a distinctive but a positive and engaging culture, leaders are asking themselves, "What's special about our company?"
While culture is often perceived as a “soft” component of business, it is the driving force that determines how successful a company is in achieving its bottom line. Developing a positive environment is imperative for business leaders to consider when crafting long-term business strategies and budgets. An engaging culture leads to higher retention rates, which saves money and protects companies’ investments over time.
When employees are connected to a mission, feel like a genuine part of the team and have a purpose that extends beyond themselves, they tend to work more diligently, be mindful of deadlines and are incentivized to stay loyal to their companies. When these cultural aspects are absent, many workers are more likely to seek employment elsewhere, even if the alternative organization is simply offering primary incentives such as increased pay. An hourly increase of $5 to $10 can be the deciding factor for an employee considering signing with an alternate company.
It is also important to consider generational differences when constructing company culture. While each employee has unique wants and needs, individuals from the same generation often share similar workplace characteristics.
For example, according to Purdue Global, millennials generally value a healthy focus on work-life balance, seek development and growth opportunities and are motivated by high-quality, driven management. In contrast, Generation Z finds success in independence, feels empowered by spaces that encourage employee innovation and is driven by an inclusive and diverse work environment.
However, a survey conducted by LinkedIn and CensusWide reveals that 72% of Gen Z and 66% of millennials say they are contemplating a career change in the next 12 months. This leads us to believe that businesses are still working to understand how to perfect their company cultures and foster long-term employee retention.
Invest in People
The evolving expectations of every generation of workers mean that companies must equip their management teams to meet these employees where they are. The reality is that most employees don't leave companies; they leave managers.
Employing a management team that can effectively support workers is immensely valuable as it drives employee engagement and supports workforce retention.
One of the principal ways to ensure a management team is equipped for success is by prioritizing comprehensive management training programs. While this may sound obvious, nearly 50% of managers with over ten years of experience claim that they’ve only received around nine total hours of training throughout their careers, according to LORMAN.
Management is a foundational step in an employee’s career advancement. Even with proven performance, each manager should still be equipped to effectively lead, develop and support individuals in a way that aligns with the company's and workforce's missions. To do this, companies that promote from within should consider an added component of coaching, educational content and leadership training.
For all managers, employee feedback is an essential step in creating a profitable and healthy work environment. Implementing a feedback loop from employees to gauge a manager’s leadership performance provides key insights regarding the temperament of the current work environment. These feedback loops also provide an increased understanding of a manager’s effect on employee engagement, their continued drive to invest in the company and, inevitably, retention.
While some employees are driven to move into management, it is essential to note that not all employees are interested in this advancement. Contrary to popular belief, many employees thrive when they can immerse themselves in one job and build their expertise over several years.
While one facet of investing in people is working to recognize their efforts through promotions; another is remembering to take the time to understand individual needs and desires in the workplace. People know when they are being treated like a number or subjected to a generic plan, so leaders must educate themselves on individual needs and tailor their approach accordingly.
Invest for the Long-Term
When companies invest in their people, they inherently invest in their future and experience an imminent increase in their ROI through reduced attrition and increased productivity.
According to CNBC, approximately 50.5 million Americans quit their jobs in 2022, compared to 25 million 10 years ago, resulting in a cost of $1 trillion in voluntary turnover across the U.S. annually.
When companies prioritize investing in high-potential and critical employees, they express their willingness to invest in future generations and long-term growth opportunities. Building a business that promotes employee retention can increase customer satisfaction, generational organizational knowledge and increase morale and productivity. All of which will benefit the profit margin and bottom line.
While the idealistic solution to these issues may be to pour money into one-size-fits-all culture-building programs, the reality is that when a company is investing time and resources into people, customized programs and positive, present and distinct company culture, the organization can expect a great return.