Strategies for Controlling Workforce Attrition in Manufacturing

In the industrial sector, where production goals are critical, workforce attrition can become a costly obstacle. With manufacturing turnover rates reaching as high as 37% (Award.co) and over 400% (Statista) in temporary staffing, high employee turnover disrupts productivity and significantly increases recruiting and training costs. This challenge is compounded by a labor shortage across the U.S., where there are approximately 85 workers available for every 100 job openings (U.S. Chamber of Commerce). Companies that aim to build a resilient workforce need a balanced approach that combines data-driven insights with proactive employee engagement. Here are four strategies any industrial business can adopt to reduce attrition and support long-term growth.

The Cost of Workforce Attrition

Attrition can affect industrial companies in several ways:

• Increased training costs: Frequent employee turnover means increased expenses for onboarding and training replacements.
• Reduced productivity: Every new hire requires time to ramp up, disrupting established workflows.
• Lower morale: High turnover can demoralize remaining employees, creating a cycle that’s hard to break.

According to a report from Deloitte and The Manufacturing Institute, the manufacturing industry will need up to 3.8 million jobs filled between 2024 and 2033, with nearly half of these potentially going unfilled due to recruitment and retention challenges (Investopedia). This trend underscores the need for practical retention strategies to create a more stable workforce.

1. Leverage Data to Track and Reduce Attrition

Using data to identify turnover trends and address attrition proactively is essential. One effective approach involves tracking specific metrics that reveal underlying retention challenges.

• Regular Performance Reviews: Quarterly Business Reviews (QBRs) can be an effective way to analyze turnover metrics and identify potential areas of concern. Tracking KPIs like turnover rates and time-to-fill can help management spot issues before they lead to widespread attrition.
• Exit Interview Insights: Tracking reasons for employee departure allows companies to understand the root causes of turnover, whether related to compensation, work environment, or management practices. Companies that systematically analyze exit data can address common issues directly.
• Predictive Analytics: Some businesses have found success by using predictive analytics to identify trends in specific departments or roles. For example, if certain roles have particularly high turnover, it may indicate a mismatch between job expectations and employee skill sets. By understanding these patterns, companies can take preventive measures, like re-evaluating role requirements or enhancing onboarding practices.

Example: Eastridge Workforce Solutions has worked with companies to implement Quarterly Business Reviews that track KPIs related to attrition. Eastridge utilizes proprietary tools to track the candidate journey, pinpointing where the highest drop-off percentages occur within the hiring funnel. We analyze turnover data, including the frequency and reasons behind employee exits, while collaborating closely with internal workforce advisors to identify trends and insights. Additionally, we offer comparative analyses across anonymous companies, revealing patterns and market-specific trends to help optimize workforce strategies.  By analyzing this data, organizations can proactively address common turnover drivers, such as poor onboarding experiences or lack of training support.

In manufacturing, turnover costs can vary significantly depending on the role, company size, and location, but a typical estimate is about 20-30% of the annual salary for hourly workers and up to 150% of the annual salary for highly skilled roles.

The formula for Estimating Turnover Cost

Turnover Cost = (Separation Costs + Vacancy Costs + Replacement Costs + Training Costs)

Defining Each Component:

Quick Estimate Formula for Hourly Positions

Turnover Cost = Annual Salary of Position × 0.2 to 0.3

For example, if a manufacturing worker earns $50,000 annually, the turnover cost might be around $10,000 to $15,000 per turnover event.

This approach provides a general idea but can be refined with real data from the company on recruitment, training, and lost productivity costs for accuracy.

2. Build Clarity Around Roles and Growth Opportunities

One of the simplest ways to reduce early-stage turnover is to ensure clear communication about role expectations and growth opportunities from day one.

• Setting Clear Expectations: Establishing transparent communication between new hires and management about job responsibilities and performance expectations prevents misunderstandings. This open dialogue can also align employees’ personal goals with company goals.
• Career Pathways: Employees are more likely to stay with a company when they can envision a future within it. Companies can create clear advancement pathways and mentorship programs to show employees that growth opportunities are available.

Example:  Eastridge’s collaborative hiring process starts with gathering information to develop a deep understanding of customers' operational needs.  The the process  utilizes specific intake procedures and a continuous feedback loop with hiring managers to drive alignment and success in placements. Additionally, our quality control extends to supporting working associates throughout their assignments to ensure satisfaction, provide encouragement, and foster strong relationships. This approach enhances assignment duration, boosts performance, and has led to a high conversion rate of temporary associates transitioning to permanent employees.

3. Design an Engaging Workplace Environment

An engaging work environment goes a long way in supporting retention. Creating a workplace that meets employees' personal and professional needs fosters loyalty and encourages long-term commitment.

• Recognition Programs: Recognizing contributions and celebrating milestones can boost morale and foster loyalty. Companies with formalized recognition programs often see increased engagement and reduced turnover.
• Tailored Benefits: Offering benefits that align with employee needs, such as flexible scheduling or wellness programs, can improve retention. Companies can survey employees to determine which benefits would be most valuable to their workforce.
• Regular Check-ins: Consistent feedback sessions help employees feel valued and heard. This practice can also foster open communication, making employees more likely to discuss concerns before they escalate into reasons for leaving.

Example: Eastridge maintains regular check-ins and has developed tailored recognition programs to support mutual goals, including improved attendance, retention, and performance. We personally accompany working associates on their first day and make frequent onsite visits to build relationships, offer coaching, and answer any questions. For clients with a high volume of Eastridge associates, we provide dedicated onsite support, acting as an extension of our customer’s HR team to enhance engagement and responsiveness.

4. Use Predictive Analytics to Address Retention Risks

Beyond tracking current metrics, using predictive analytics can help companies anticipate and address retention risks before they become larger issues.

• Identify At-Risk Groups: Some businesses use data analytics to detect patterns in turnover, which allows them to create targeted solutions. For example, if specific roles have high attrition, the company can re-evaluate job requirements or improve training programs to better support these employees.
• Proactive Adjustments: Predictive analytics can indicate potential problems in advance, giving businesses time to address issues like employee dissatisfaction or lack of advancement options before they become serious enough to impact turnover.

Example: Eastridge applies predictive analytics to help companies identify potential retention issues. For instance, if data shows that employees often leave due to limited career development, they may recommend professional development programs to address these concerns before attrition becomes an issue.

Success in Action: Reducing Attrition through Data and Engagement

One Eastridge Industrial client was struggling with high turnover in entry-level roles.  Working with Eastridge, the company found success by combining data analysis and engagement initiatives. By analyzing their attrition data and recognizing the lack of career advancement as a main driver for turnover, they launched a training program that offered employees clear growth pathways. Within six months, turnover dropped by 30%, and employees reported higher job satisfaction and motivation.

In another example, Eastridge worked with a global leader in healthcare manufacturing providing medical devices, diagnostics, pharmaceutical delivery, consumer health products, and orthopedics.  Leveraging data and Eastridge’s proprietary GATE candidate assessment program, the client was able to reduce turnover by 10% and improve product quality by 20%.

Building a Sustainable Workforce through Strategic Retention

Combining data-driven insights with employee engagement strategies can help industrial companies control attrition. With a holistic approach that includes structured metrics, clear communication, and workplace engagement, businesses can build a stable, productive workforce. As labor shortages continue, these strategies will be essential to retain talent and support long-term growth in the industrial sector.