7/16/2015 | 3 MINUTE READ

Use 'The Good Jobs Strategy' to Find Employees

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By changing their workforce management systems, companies start thinking about employees as sources for opportunity and customer satisfaction.


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For the sixth year in a row, the ManpowerGroup Annual Talent Shortage Survey reveals that skilled trade’s positions are the hardest to fill for U.S. employers. Among U.S. employers, 48 percent acknowledge that talent shortages have a medium to high impact on their business, but few are putting talent strategies in place to address the problem. One in five U.S. employers is still not pursuing strategies to overcome talent shortages, despite the negative impact on their business.

The data showed two pieces of information: the problem is getting worse and employers aren’t doing much to solve it.  

While it’s a nuisance today, if not addressed, the lack of a talented, skilled trade’s workforce could have wide-ranging, epidemic consequences in the near future. Could it be that employers aren’t really sure how to solve this issue?  

Typically, manufacturers start new employees at or below minimum wage, provide poorly designed on-the-job training, start them on a second or third shift and treat them like a human robot in a job with no meaning or purpose from the new employee’s perspective. This is a demotivating mixture of poverty level wages, poorly designed training, chaotic scheduling and creates another reason for a new employee to keep options open for a different job opportunity. This is a new employee on-board style that has contributed to the problem, not the solution. 

The old rule of thumb for many manufacturers has been to drive down wages and reduce operation costs. This is typically a function of reduced sales or margin erosion. This short-term mentality creates a vicious cycle of disinvestment in their workforce—in the search of higher profits. 

Has the “doing more with less” mentality run its course?

Consider the findings published by MIT professor Zeynop Ton in her book, “The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profit.” She argues that a company can adopt a low-cost strategy that promotes investments in employees. Ms. Ton shows that treating employees as assets in which manufacturers invest resources into, can foster an environment for profit, efficiency and better customer service.

What if the focus shifted from lower costs to long-term, smarter investments: Creating products that people want to buy at a fair margin and providing jobs that people want to keep. When labor is understood as a strategic asset, not a cost to be minimized, everyone—from customers to shareholders—fares better over the long term, according to Ms. Ton. By changing their workforce management systems, companies stop thinking about people as cost centers and units of production and start thinking about them as sources for possible opportunity and customer satisfaction.

The result of this shift by employers is that employees are more productive and satisfied when they are able to get their work done, have the opportunity to focus, and feel connected to a higher purpose at work.

Ms. Ton’s counterintuitive money-making approach finds its roots in a business model that controls costs, offers a living wage, and satisfies customers. 

Here’s how The Good Jobs Strategy works: 
1. Offer less/fewer options. Controlling costs starts with offering a narrower selection of product offerings, fewer price discounts and limited hours. It makes fewer pieces, at stronger margins. It does not offer volume discounts, and if time lines in quotes are accurately managed, its hours should be reduced. 
2. Standardize and empower. Ms. Ton freely admits borrowing liberally from the Toyota Production System. This method incorporates such elements as employee decision making, giving employees a say in the execution of the company’s strategic vision and empowering them to bring ideas to management and change their options.
3. Cross-train. Instead of specific jobs, in most cases, employees shift jobs based upon work flow. Many small, successful manufacturers already cross-train employees out of necessity. 
4. Operate with slack. Overstaffing actually reduces costs. The “extra” staff doesn’t sit around—they participate in training and continuous improvement. This also reduces the need for overtime, creating better work/life balance for the employee.
The Good Jobs Strategy is clear: Companies that control costs and consider employees as assets, not expenses, boost customer satisfaction and loyalty by producing quality products while bolstering their profits.