Industry News
10 min read

The Cost of Losing Frontline Employees

blog post image

Here's How To Avoid Paying It

Employee retention is as important (if not more important) than hiring workers.

At any given manufacturing organization, a single frontline departure can lead to numerous expenses. And more than just the financial ones. 

Over the years, multiple workplace studies have attempted to quantify this number. 

  • Gallup’s data claims the cost of losing someone is half of that person’s annual salary. 
  • The Predictive Index’s report says it’s $11,000 a person. 
  • Other human resource research shows it’s more, once you consider separation expenses like severance, unemployment and benefits; along with replacement costs of advertising, recruiting and interviews.

But in the context of expert knowledge, however, losing several thousand dollars per employee annually feels like a small number.

What about the soft costs? What about the invaluable asset of lost information?

When a frontline employee walks out the factory door for the last time, all their insight, expert knowledge and experience leaves with them. 

And if that repository of common problems and solutions only lives in the heads of that experienced employee you have a very expensive organizational problem on your hands.

Consider the time, effort and expense it will cost to recoup that knowledge. That recovery process can take days, weeks, and months of work, just to get back to baseline. You won’t hear sighs of relief from the team, only groans of additional work. Everyone who didn’t know what the departing worker knew, will now have to start from scratch. 

It’s impossible to put a dollar amount on that loss. 

One frontline employee leaving can become the pebble in the manufacturing pond that sends expensive ripples in all organizational directions.

Panopto, an asynchronous communication software for universities and enterprise businesses, recently published The Workplace Knowledge and Productivity Report. Their research suggests companies are losing millions of dollars in annual productivity due to delays in sharing knowledge.

We weren’t surprised to read these numbers. We advise manufacturing customers every day about their frontline retention, hiring, and onboarding issues, and the kinds of sentiments they share with us aren’t dissimilar to this report. 

The reality of our industry is, turnover is on everyone’s mind. And companies should do what they can to stop it. At the same time, they should also seek out ways to mitigate the loss wherever and however they can. That expense of losing expert knowledge, while not necessarily a hard metric, is big enough that taking precautions against it is critical.

Here are our recommendations, both strategic and tactical: 

STRATEGY #1: Build A Succession Plan For Knowledge

At the executive level of any organization, succession planning is critical. If the company doesn’t have plans for c-suite departures, they’re vulnerable to a leadership gap that can cost the company significant time and money.

When it comes to your expert knowledge, the process isn’t all that different. People may wear different headgear than the royal family, but the spirit is the same.

Manufacturing leaders should provide a mechanism that ensures critical information has been properly captured, approved, and leveraged. They must take a stand for proactive and prolific documentation, and not accept knowledge loss to the degree that it currently happens.

Without this intention, it becomes too labor intensive to fill those gaps when frontline workers depart.

When insights are conveniently available to everyone on the factory floor, frontline teams waste less time searching for information. And more time being productive.

Our tactical recommendation: Use Instant Notifications For Updates.

Do your frontline employees receive customized alerts when action is required or changes have been made to processes? Dozuki enables knowledge succession planning through instant notifications, both onsite and via email. This helps you increase visibility, establish continuity, and reduce response times. Now everyone will be on the same page, quite literally. 

Free Download Solving the Skills Gap on the Factory Floor

STRATEGY #2: Crowdsource Frontline Problem Solving

Obtaining input into a task by enlisting the services of a large number of people is not a new practice. Early internet users weren’t the pioneers of crowdsourcing. It goes back centuries.

Kings in the middle ages used to crowdsource the measuring of longitudinal positions of seafaring vessels. British governments famously offered the public a monetary prize to the citizen who came up with the best solution.

That’s using the population as wind in your sails.

Planters, in the early nineteen hundreds, also crowdsourced their brand logo. According to the book Getting Results From Crowds, the food manufacturer’s famous Mr. Peanut logo was designed by a fourteen year old boy who won the contest.

That’s not nuts, that’s smart.

If you want to avoid the information cost of losing frontline employees, we suggest you do the same. Crowdsourcing wisdom is a surefire way to get what’s inside of people’s heads down onto a more shareable and permanent format.

Our tactical Recommendation: Make Questioning & Answering A Team Ritual

To increase collaboration and knowledge sharing between users, we recommend using the built-in Q&A engine in Dozuki. No more tapping coworkers on the shoulder every five minutes. No more waiting for the day shift to come in with the answers. Now frontline workers can simply post their questions to multiple facilities and crowdsource the support they need. It’s accessible, it’s scalable, and best of all, it’s documented. Forever.

STRATEGY #3: Empower Workers To Take Ownership

Many manufacturers use a seasonal or transitional workforce, so getting employees onboarded quickly is critical. After all, if they only have workers for a year or less, it's essential to make them as productive as possible.

Sadly, most operators spend hours every week waiting to receive information. And when they struggle to obtain knowledge that affects their ability to do their job, it doesn’t bode well for long term retention.

How can frontline teams ramp up quickly and empower workers to leverage limited amounts of time, energy, manpower and other resources? In a recent episode of The Voices of Manufacturing Podcast, our friends from Kawasaki Motors told us a story that we couldn’t believe:

“When a farm town hits hard times during a down economy, one factory hires college football players to use their skills from the defensive line, to build motorcycles on the assembly line.”

It sounds like a movie trailer, but it's real life. We sat down with Tim Melvin (Human Resources Manager) and Jake Matheny (Production Manager) about how they used their unexpected approach to empowerment. Turns out, the more ownership you give, the more engaged workers become.

Our tactical recommendation: Gamify Guide Creation + Management.

Hold a contest to see who can locate documents the fastest. Lowest time in the plant gets a gift card! Operators will race each other to search for work instructions. One of our customers even set up an arcade booth in the lunchroom so everyone had a turn. It lowered the team’s resistance to using their new digital tools and ensured that positive culture builds. Your workplace could feel like frontline teams are actually collaborating on guides, instead of one person telling them what to do.

With these strategies and tactics, you can be sure to make frontline digital transformation more inclusive, less labor intensive and more engaging. That’s a recipe for retention.

What’s more, you can mitigate the costs of critical insight, expert knowledge and experience disappearing when employees inevitably move on.

Now the repository of common problems and solutions will no longer live in people’s heads, but in a shareable permanent format. That isn’t a dusty binder.

Your days of frontline workers starting from scratch will be a thing of the past.

Free Download Solving the Skills Gap on the Factory Floor

Topic(s): Industry News
brushstroke design brushstroke design

Written by Scott Ginsberg

Scott is the Content Marketing Manager at Dozuki. He’s spent 20+ years writing books about wearing nametags, conducting corporate training seminars on approachability, and leading knowledge management programs at tech startups. Text him right now at 314.374.3397 with your favorite emoji.

Related Posts

View All Posts