Business Operations

By Mike Leigh

Executive Summary:

Since the pandemic recovery began, the challenge of finding good people has become even greater.

Labor shortage antidotes

We are currently in a labor shortage. Millions of workers left the workforce for various reasons during the pandemic, but not all of them have returned. This shortage has been a contributing factor to supply chain issues and inflation.

Organizations that need more employees will usually invest more time and money to recruit, sometimes offering higher salaries, bonuses, or greater benefits. HR managers are actively seeking new and innovative ways to recruit. Putting emphasis on recruiting is important, but most companies are neglecting two other strategies to their labor shortage problem that I believe are more important.

Employee retention. For every good employee retained, one less employee needs to be recruited, hired, onboarded, and trained. Employees are quitting at the highest rate ever recorded, yet few organizations invest enough into keeping their team members. There is a lot of bad leadership creating bad cultures. I am shocked at how many leaders fail to regularly meet one-on-one with their employees to explore their needs and career desires yet suffer high turnover and complain they can’t “find good people.” One local company I worked with who suffered from this decided to replace their operations leader. Not only did the exits slow down, but their employees told their friends and their former employees returned because of the positive change. Leadership matters!

Process Improvement. Instead of adding more people, organizations should invest in greater productivity. I have not yet seen a business process that couldn’t achieve an improvement of 10% or more in productivity or throughput. Most companies simply don’t spend much energy improving their processes. Not only does this strategy compensate for labor shortages, but it also lowers costs, increases profits, and improves competitiveness.

Investing time and money into retaining employees and improving processes should be a priority for every business. If they are not doing this, the new year is a good time to start!

Send your questions or comments to Mike@ OpXSolutionsllc.com