With the advent of Industry 4.0 in manufacturing, the forging industry is faced with yet another challenge: talent management. We’ve all been there. Sometimes an expert forger can work a forge press like a surgeon but can’t figure out how to operate the new screens, controls and sensors. Meanwhile, a new hire out of high school may be able to work all of the new technology but doesn’t know the first step to making a forging. One of the biggest internal problems tends to be finding that perfect candidate who is an expert in both fields. In the absence of this, we resort to hiring the next best candidate and training to fill in the knowledge gap. The issue here is that the price tag to train (in time, personnel and money) can be rather costly.

The True Cost of Losing Talent

It is easy to see some of the costs we incur when an employee leaves the company (such as the lost costs of training that person), but the true costs go much deeper. First, you sometimes lose internal, private knowledge. In my background in forging, I knew of a forge-press operator who knew that, when forgings started sticking in the die, he could spit into the die before the workpiece went in to cause pressure and a “pop” that would separate the workpiece from the die at the end of the cycle. If that person left the company tomorrow, and no one else has this private knowledge, all you know is that your process engineer starts calling you saying that a bunch of parts are sticking and that you are suffering a good amount of downtime.

Beyond downtime, can you imagine the potential for increase in cost of poor quality? What if you lose your process engineer, quality engineer or rework specialist? What costs have you seen from major product excursions?

Last, but not least, there is always an inherent cost in resources when you bring in someone new to replace the lost talent. There may be a cost to hire a search firm, but a study from the Harvard Business School has shown that a new mid-level employee can actually cost a company money for 6.2 months after their date of hire as they become acclimated. In your own company, have you seen these costs materialize as you lose good employees?

But why do they leave?

Forging is a very specialized skill set, and within a community there may be only a few companies operating in the field. Yet you may have seen some of your best talent jump from shop to shop. For those who leave the company but stay in the forging industry, we know that the issue must go beyond the industry itself.

Many could speculate that the broad absence of pensions in the industry nowadays no longer anchors or motivates an employee to stay put. Consequently, if another shop is offering $1 more per hour or better shifts or scheduling, it’s no surprise that an employee would be motivated to pursue the opportunity. We all know that you could then try to offer $2 more per hour to keep them from leaving, but this kind of negotiation would not be a sustainable way to promote retention.

Monetary Value and Perceived Value are not the Same

Anyone with a marketing background knows that one of the quickest ways to impact your bottom line is to provide perceived value to your end user without increasing your monetary investment to do so. Think about why people are eager to buy a $1,000 iPhone versus a $500 competitor. Even though the raw materials may cost the same, the iPhone brings perceived value for the user that the competitor does not in the forms of technology, user experience, product support and more.

One major step that should be taken is to talk with your employees directly about what they value personally in their life. Talk to everyone from your die designer to your die sinker. Because this is the forging industry, expect some very real and truthful responses.

Most importantly, you should expect to run into two things. First, expect to have to hold firm on certain issues. “Higher pay” will almost always come up as a suggestion, but (as stated earlier) this is not always a sustainable long-term solution.

Second, expect that people don’t actually know what they want because they don’t know what’s available. To illustrate, when told to choose your favorite ice-cream flavor between vanilla, chocolate and strawberry, you will easily make the best choice. When told to simply choose any flavor of ice cream as your favorite, there will always be some other, better option out there that you haven’t even thought of yet. That said, be prepared to offer some potential options to spark conversation.

An example of this is how our financial firm offers a variety of employee benefits at no cost to the employer. An employee might not think to ask for this, but when it is suggested as a real possibility they will see the value in the opportunity. This applies to companies of all sizes because no company is too big or too small.

While we can provide the more common services of retirement accounts and life insurance, we can also provide the opportunity for your employees to meet with a fully licensed advisor to develop a game plan toward becoming debt-free, properly protected and financially independent. Again, this is at no cost to the employer, so both parties win. When an employee becomes debt-free and financially secure thanks to a benefit provided by their employer, how do you think they will feel about their employer?

In chemistry, there is a concept called “activation energy,” where certain reactions/events require an additional amount of energy before they can start to take place. The same applies to people. Think, for example, about being at a buffet and deciding whether to get another plate of food or not. Certain factors are telling you yes, and certain factors are telling you no. But when the pros outweigh the cons, you go and get that extra plate. For employees, the same is true when they decide to leave a company. There will always be reasons why they want to leave and why they want to stay.

The more benefits provided to the employee through the company, the more they like their employer and the more likely they are to stay and not consider a move. If they move, they may have to get a new retirement account or find a new advisor, for instance. Now when faced with a potential pay raise at another shop, they will have to weigh this option next to the activation energy required to give up the various benefits provided at your shop. What perceived value would you see in making this decision to give up these added benefits? Is it worth the $1/hour or $2/hour raise?

We Choose to Work Smarter, not Harder in Forging

The forging industry has been the backbone of nations for thousands of years. The way it has done so is by adapting to changing environments in order to provide the best products to move the nation forward. In a time when pensions are hard to come by and training new employees comes at such a high cost, it is apparent that we need to do more to retain good talent. Low- and no-cost employee benefits like free access to a financial advisor can tip the scale in favor of retention and instantly help your bottom line. Recruit once, train once, retain for longer and prosper as part of a healthy and helpful partnership.