Amid the economic fervor of the early 2000s — characterized by a critical shortage of skilled labor and an abundance of job opportunities — manufacturing entities faced daunting challenges. Grappling with an unsustainable turnover rate exceeding 65%, one South Carolina manufacturing powerhouse found itself at a crossroads, seeking a strategic solution to cultivate a more stable and productive workforce. For this company, partnering with Impact Workforce Solutions marked a transformative step toward reducing operational costs. Their success illustrates the tremendous potential of strategic workforce management in the manufacturing sector.
Manufacturing workforce challenges
The manufacturing company we worked with faced a number of challenges rooted in workforce instability.
Workforce model imbalance
The company’s 63%/37% (direct/temp) workforce model manifested in widespread employee dissatisfaction. This model’s inherent flaws underscored a significant disconnect between the company’s operational needs and its workforce strategy, leading to an environment where long-term engagement and loyalty were scarce.
High turnover rates
The consequence of this imbalance was starkly evident in the company’s turnover rates, which soared above 65% monthly. This statistic was a clear indicator of the urgency for a strategic overhaul, as the churn drained resources, hampered productivity, and stalled operational efficiency at scale.
Challenges in attraction and recruitment
Compounding the impacts of workforce instability, the company struggled to attract qualified talent within South Carolina’s competitive environment. The lack of adequate benefits was a critical deterrent, making the recruitment process both slow and costly.
Financial repercussions of high turnover
The high turnover rates and recruitment challenges translated into substantial operational costs. These costs were multifaceted, affecting the immediate financial health of the company while impeding its long-term growth and development.
Compromised quality and safety
The financial strain imposed by these workforce challenges limited opportunities to achieve operational excellence. The constant churn and difficulty in attracting skilled workers led to compromised quality and safety standards, introducing significant risks and opportunity costs.
Impact Workforce Solutions
In response to this client’s burgeoning challenges, Impact Workforce Solutions introduced the Core2 program — a strategic initiative designed to relieve and resolve the critical issues of turnover and employee dissatisfaction through holistic employer of record (EOR) services and retention solutions.
Insight into root causes
Our first move was to identify the underlying factors contributing to this manufacturing operation’s high turnover rates and low employee engagement. To do this, we coordinated focus groups with employees to understand their human concerns and workforce needs. This low-lift process delivered invaluable insights for tailoring retention strategies and our EOR solutions.
Implementing Core2
Our core strategic intervention was the implementation of Impact’s Core2 program. Core2 synergizes EOR services and retention solutions, which enabled our client to transition from the unsustainable 63%/37% direct/temp workforce model to a more balanced 50%/50% model. This shift fostered a stronger sense of belonging across core and contingent workers, and it enhanced employee benefits significantly. Concurrently, the shift to a 50/50 model lowered this client’s overall labor costs and created more flexibility for scaling to new market opportunities.
On-site operations management
We also deployed on-site operations managers and shift supervisors to strengthen employee engagement and operational efficiency. The presence of dedicated professionals to manage day-to-day operations and oversee shifts was instrumental in streamlining processes, enhancing communication, and fostering a culture of excellence.
Extraordinary outcomes
For this client in manufacturing, Impact’s Core2 solution was instrumental in establishing workforce stability, engagement, and productivity. The shift yielded substantial financial savings, and it provided the client with more flexibility and opportunities for expansion.
Retention
- Turnover plummeted from 67% to 9%.
Cost savings
- $876,000 in savings for training and turnover for every 100 employees
- $800,000 in savings within the first year of implementation
- $192,000 in hard-cost avoidance within the first year of implementation
Operational excellence
- Productivity increase: The Core2 employee population exhibited a noticeable increase in productivity, a testament to the enhanced engagement and satisfaction resulting from better benefits and job security.
- Expansion of Core2 programs: Buoyed by the success and versatility of the pilot program, the company proceeded to establish Core2 initiatives in seven additional facilities.
Overall
- Lower overall labor costs
- Improved retention
- Lift and shift of liability and risk
- Lower administrative burden for selection, onboarding, and management of first-year talent
Revolutionize your manufacturing center
In a sector like manufacturing — where human capital is as critical as technological advancements — an effective workforce strategy can fundamentally transform operations and business outcomes. Through our Core2 program, Impact Workforce Solutions affirms the value of employee-centric strategies, collaboration, and innovation in overcoming the complexities of workforce management. And as our client knows well — our solutions work.