Raising pay rates to retain talent
In today's competitive labor market, retaining talent is more critical than ever.
The U.S. Bureau of Labor Statistics reported 322,000 resignations in the manufacturing industry in June 2022 — an increase from 302,000 one year earlier during the Great Resignation.
The figures speak for themselves, and companies must take a proactive approach to maintain their workforce.
If you can't minimize employee turnover, your manufacturing business will suffer — and so will its bottom line.
To keep the best employees on board and avoid losing them to competitors, it's vital to offer competitive compensation packages that align with industry standards.
Do low pay rates contribute to high turnover?
Although pay isn't the only factor to consider when it comes to employee retention, it's one of the most important.
According to a study by The Pew Research Center based on an analysis of U.S. government data, 60% of workers who changed jobs experienced a salary increase. At the same time, less than half of those who stayed with their current employer received a raise.
This result proves how competitive the market is currently, with manufacturers often experiencing workforce shortages. And while you can't control what other companies offer, you can ensure that your employees are compensated well and consistently.
The industry standard in manufacturing is higher than a lot of other sectors in the economy, and offering the minimum wage is uncommon. In fact, only about 30,000 U.S. manufacturing workers were paid the prevailing federal minimum wage or less in 2021. This is due to the high-skilled nature of the industry, as well as rising living costs and inflation rates.
But while the industry is competitive, it's also full of opportunities for those who are willing to invest in their workers. The ability to offer a competitive salary and benefits package can help you attract and retain the most skilled workers — which could be the difference between success and failure.
Combating the problem with higher pay
When it comes to recruiting and retaining talent, companies face challenges in finding the best workforce for their needs. However, raising pay rates can make your company stand out from the rest — and keep employees happy and motivated while you continue developing a positive culture with benefits packages that support staff well-being.
The key is to find the right balance between pay and benefits. A robust compensation package can help you attract and retain the right talent, but your business will suffer if it's too expensive to maintain.
While you can't raise pay rates overnight, it's definitely the time to start thinking about doing so. There's no shortage of manufacturing jobs, but there's a shortage of workers willing to accept them.
The best advice we can give you is to stay up-to-date on industry trends and act sooner rather than later so your company doesn't fall behind the competition.