People are Not Plastic: Four Challenges Facing the Industry

by Darryl Warren, president
D. Gene Alliance

Employees do not perform or respond as predictably as plastic. If they did, our job in managing human capital would be easier. The plastics industry is experiencing complex challenges with our most important asset, our people. Placing a help wanted advertisement does not yield quality applicants, which leaves a large skills gap. Experienced workers are leaving the workforce in record numbers. One of every four managers is a millennial who is not recruited, retained, motivated or led in the same way as experienced workers of other generations. Compounding these problems is the lack of engagement that could cost the plastics industry billions every year¹.

During an October 2016 roundtable of industry leaders representing 16 organizations from seven states, CEOs and other management-level stakeholders gathered to discuss best practices and share solutions to these complex people issues. The challenges were categorized into four areas.

1. The Skills Gap
2. The Boomer Cliff
3. The Millennial Challenge
4. The Engagement Deficit

The Skills Gap

A 2015 study by Deloitte estimated six out of 10 positions will remain unfilled due to the talent shortage². The skills gap is separated into two categories: operations and leadership. We identified innovative practices beyond existing training programs. Step one is to conduct a thorough assessment to benchmark the current state. Only then can the organization establish strategic plans to bridge any skills gap.

To offset the shortage of incoming talent, forward-thinking organizations are widening talent feeder pools to include nontraditional sources, such as correctional facilities and halfway houses. This untapped group of entry-level employees has been very successful as a resource for the plastic manufacturers working with that community.

Changing the perception of manufacturing also has delivered success in sourcing new talent. Many organizations are investing in the advancements of computer technology, robotics and graphic simulation. These areas are of great interest to younger generations. Organizations in competition for new talent must promote internal investments in new technology. The use of mentoring programs to train talent hired is not new, but an effort to strategically match the mentor and the mentee is new. We understand that the best learning occurs when strong alignment exists. When possible, organizations should assign the mentor relationship based on common background, geographical location and dominant characteristics. This connection reduces any generational conflict that can exist when one group mentors another.

The Boomer Cliff

A 2016 article in the Washington Post challenged the commonly cited figure – and then confirmed its accuracy – that 10,000 baby boomers are eligible to or will retire each day³. It’s not possible to prevent workers from reaching retirement age, but there are tactics and best practices to be utilized to manage “brain drain.”

Since a large number of employees is expected to leave the workforce daily, smart organizations are preparing for the inevitable. Scheduled time is being blocked out for older, experienced workers to record the undocumented tribal knowledge that has been developed over the years. This knowledge goes beyond written work instructions created for the specific position.

Another practice is to tailor job duties to the specific needs of the potential retiree. This may help delay departure, which will provide the organization the valuable time to document and record knowledge developed over time. Heavy travel expectations and lack of flexibility are top reasons why experienced workers are more receptive to retirement. When possible, organizations should reduce travel requirements and institute a more flexible job structure to accommodate the needs of the aging employee.

The Millennial Challenge

Studies tell us millennials will make up approximately 75 percent of the workforce by 2030⁴. To compete for the best talent in the current employees’ labor market, recruitment efforts should be tailored to specific groups. HR departments that focus on the specific needs of millennials are more successful filling open positions from this unique pool of applicants. The characteristics of this group are well documented. Hiring campaigns that highlight these characteristics in their organizational culture create greater employment interest among millennials. The primary issue organizations face as new generations enter the workforce is the multi-generational conflict that occurs. A critical change that smart organizations are making to manage this conflict is first adjusting their perception of the incoming generation(s). A paradigm shift in the organizational culture must take place for the hiring staff to recognize a resume listing several employers may not necessarily indicate career instability.

Millennials have a strong need to control their time. To effectively court this group, organizations should illustrate a culture of flexibility. The focus for management-level staff should be on delivering results – not on being in the building at a cubicle at a specific time. The greater sense of control of one’s time reduces employee stress. Lower employee stress contributes to a greater percentage of employee retention, and data prove it is a lower cost to retain an employee than to recruit a new employee.

Examples of flexibility in manufacturing operations as it relates to time include self-scheduling teams that allow employees to have input on hours worked, technology that allows for seamless onsite/offsite communication and schedules that provide three-day weekends on a regular basis. Nothing will replace the fact that manufacturers must have a dedicated production schedule, but a willingness of the organization to be flexible and nontraditional will appeal to millennials’ need to control their own time, even in a structured manufacturing setting.

The Engagement Deficit

Data from Gallup tells us approximately 70 percent of the US workforce is either not engaged or disengaged in work activities⁵. A good first step to address a lack of engagement is to determine the existing level of engagement. Many tools, in the form of surveys, are available in the marketplace to benchmark the current state, but the most critical fact is once an organization begins to assess current engagement, there must be a strategic plan and early commitment to address any findings uncovered. Organizational engagement gets worse when feedback is solicited but no action or change is made. A senior level commitment to invest in and address issues revealed is required before engagement levels are explored.

It also was found that to be most effective, organizations must ensure their mission is clearly defined. In today’s market, it is important to identify the “why” of the organization. The greater purpose must be clearly understood for employees to feel connected and contribute at their highest levels. At the end of the day, the new employee wants independence and the opportunity to make the world a better place. The organization’s objective must be greater than return on shareholder equity. Understanding the “why” helps align organizational objectives to the employee. In the spirit of collaboration to improve the industry, leaders in plastics will continue to discuss challenges in human capital and share best practices solutions. Preparing for upcoming challenges that will affect our businesses should be very intentional. Success will not happen by accident.

References

1. Retallick, A. (2015, May 25) The Cost of a Disengaged Employee. Glass Door for Employees. Retrieved Sept. 10, 2016, from www.glassdoor.com.
2. Griffi, C., McNelly, et al. (2015) The Skills Gap in US Manufacturing – 2015 and Beyond (P 4) Deloitte – Manufacturing Institute
3. Kessler, G. (2014, July 24) Do 10,000 baby boomers retire each day? Washington Post. Retrieved Sept. 9, 2016, from www.washingtonpost.com.
4. Smith, J. (2014, November 18) 8 Things You Need to Know About Millennials at Work. Business Insider. Retrieved Sept. 9, 2016, from www.businessinsider.com.
5. Adkins, A. (2015, January 28) Majority of US Employees Not Engaged Despite Gains in 2014 Employee Engagement. Gallup Organization. Retrieved Sept. 10, 2016, from www.gallup.com.

Darryl Warren is president of D. Gene Alliance, a business solutions company and licensee of Crestcom International, where interactive leadership training delivers real business results. For a copy of the complete CEO Roundtable white paper report, People are Not Plastic, email [email protected] or call 317.910.4318.