Red Deer Prospect
Tuesday, August 07, 2007
Employee Retention & Productivity
Rising wages, low taxes, and a strong oil and gas market continue to drive the hot Alberta economy. Combined with a large, educated and talented workforce, the province’s future has never looked better.
The resulting competition for labour and increased pressure for productivity can be felt in all sectors of the economy from retail, manufacturing, sales and service to major industry. In today’s environment, companies need to work hard to differentiate themselves by strategically positioning themselves as being an employer of choice.
According to the ‘Employee Engagement and Productivity Forum’ held at the Red Deer Lodge on June 20, hosted by the Red Deer Regional Economic Development, in conjunction with Calgary Works, Edmonton Economic Development and the Alberta Government, the best way to attract, retain and engage employees, along with maintaining or increasing productivity, is by simply being a great place to work.
As Alberta is facing a labour shortage, the experts who spoke at the forum said it’s important for organizations to be aware of, and alleviate, any productivity and engagement challenges they are facing in order to increase outputs and keep employees happy. Presenters included keynotes Carol Kinsey, Allan Bailey and Sean Slater, along with local business representatives.
Happy employees not only make better and more productive employees, but they’re also more likely to be company loyal. And the less people that leave a company, the less need there is to spend time and money on recruitment and training.
With the retirement of baby boomers imminently approaching, companies are hiring their future leaders now, making investments in their people more prudent. The technical knowledge, leadership and understanding that is lost when long-time employees retire can be alleviated with a committed and energetic younger generation that has the necessary tools and training to do the jobs. As organizations go forward, they need to employ new strategies to ensure they build "career employees", while adding production value to their businesses.
Innovative rewards programs and "perks" to employees, such as massage and yoga, flexible work schedules and benefits packages, competitive compensation packages, along with a commitment to employee education and training were named as necessary components to ensuring a competitive advantage in today’s business marketplace. Employers must also ensure they engage and empower employees by asking for their ideas, at the beginning and throughout entire processes, as well as ensuring that job selection processes encourage internal movement.
In today’s market, where employers will often use aggressive recruitment tactics, there may not always be the same attention on retention and ensuring employees are content. By working to exceed employee expectations, and adjusting to their needs, employers can expect to not only increase productivity but also retain long-term employees.
According to Statistics Canada, the year 2007 opened on a solid note for productivity in the Canadian business sector. Between January and March, quarterly labour productivity growth climbed to 0.7 per cent, more than three times the pace in the previous quarter (+0.2 per cent). Canadian businesses managed to triple their production rate relative to the previous quarter, while hours worked increased at a more moderate pace. This surge in productivity in the first quarter of 2007 is the largest gain since the 1.0 per cent recorded in the third quarter of 2005.
A study published in June 2007 by the Microeconomic Analysis Division of Statistics Canada, titled ‘Investment and Long-term Productivity Growth in the Canadian Business Sector’, attributes most of the increases in labour productivity over the past 45 years to investments in machinery and equipment.
These capital improvements were found to be the most important factor in labour productivity growth, accounting for 55 per cent of the productivity gains, workforce quality improvements accounted for 20 per cent, with other factors, such as organizational change, technological changes or increases in economies of scale, accounting for the remaining 25 per cent.
This is not to say that payback from labour investments is low. In fact, according to the Canadian Apprenticeship Forum, employers can expect to earn $1.38 for every dollar they invest in training an apprentice. What the report does demonstrate is that, when it comes to productivity, a trained and solid workforce is only one component to success.
Simplifying and improving both business processes and business relationships, focusing on customer success and eliminating waste are also factors to improving productivity, and all part of "lean" thinking.
James P. Womack first introduced lean thinking in 1992 to help companies achieve their goals of becoming more competitive, productive and innovative by eliminating waste, from the factory to the office. By applying lean principles, companies are meant to be able to better identify and map their processes, as well as better respond to the needs of their customers.
This is achieved through the reduction of waste activities that the customer will not pay for, instead performing activities that add value in the eyes of the customer. Lean organizations apply an approach that reduces waste, improves quality and embraces employee involvement.
"Manufacturers in the United States embraced the lean manufacturing process almost as soon as it was introduced," says Clif Skrypnyk, Director of Manufacturing Systems, Alberta Employment, Immigration and Industry. "But Lean in Alberta didn’t really begin until 2000, when the Alberta government, in partnership with the Canadian Manufacturers and Exporters, began promoting and supporting lean thinking."
"In order for Alberta manufacturers to become more productive and effectively compete within the global market, they need to adopt the principles as quickly as possible," added Skrypnyk.
There is no doubting that Central Alberta is currently in a labour crunch. With employment growth and a strong economy projected to persist, along with an aging labour force, it is expected that this market will only continue to tighten over the next 10 years.
According to the Employee Engagement and Productivity Forum, whether by increasing morale or decreasing inefficiencies, Managers and CEOs need to ensure employee engagement and productivity is a priority in their businesses. By empowering employees, involving them emotionally in the company, and striving to make their jobs enjoyable, employers will be in a better position to meet the challenges facing our labour market today and well into the future.
Seven Ways to Eliminate Waste via "Lean" Thinking
Simplifying and improving both business processes and business relationships, focusing on customer success and eliminating waste are also factors to improving productivity, and all part of "lean" thinking.
- Stop Overproduction or Early Production
both result in the production of unnecessary products and materials, and the waste of material, resources, and personnel. LEAN analysis helps to identify and eliminate the production of units that are no longer used, or that are redundant to the product being produced.
- Manage Inventory
LEAN inventory management methods will prevent the holding or purchasing of unnecessary raw materials, performance of unnecessary work-in-progress, or the production and storage of unnecessary product.
- Streamline Transportation
By streamlining transportation of materials, you can reduce multiple handling of materials, delays in material handling, as well as unnecessary handling.
- Optimize Motion and Actions
LEAN analysis reveals unproductive actions and motions performed by your personnel. For example, unnecessary trips to inventory to collect parts could be eliminated by storing the parts closer to where they are actually used.
- Reduce Waiting Times
Waiting for products, personnel, or parts all result in wasted time. Idle time is time during which value is not added to the product.
- Reduce or Eliminate Production of Defective Units
LEAN analysis helps to identify errors in the production process and helps eliminate the production of defective units that cannot be used or sold.
- Reduce or Stop Over-processing
LEAN analysis reveals unnecessary steps or work elements that do not add value to the work or product.
For more information on lean thinking, contact Clif Skrypnyk, Director of Manufacturing Systems, Alberta Employment, Immigration & Industry, by phone at 780.427.6494 or by email at clif.skrypnyk@gov.ab.ca.
GenTex Oilfield Manufacturing Inc.
GenTex, founded in 1997, specializes in the manufacturing of truck, trailer and skid mounted oilfield equipment for international and domestic markets. Their research and development provides customers with the most ergonomic hot oil and pressure units available.
"Employee training is a key focus of our organization," said Garett Cupples, President of GenTex. "Understanding the uses of the equipment gives staff the ability to design more efficient and higher-quality pieces."
GenTex utilizes Red Deer College for many professional training courses for their employees. Cupples believes it is this commitment to employee training and development, along with a good compensation package, bonuses and other employee incentives that has allowed GenTex to retain their core group of first rate employees.
GenTex Oilfield Manufacturing Inc.
#10 37337 Burnt Lake Trail
Red Deer, Alberta, Canada
(403) 341-4155
