Employee retention: Facing the front-line flexibility dilemma in manufacturing
by Derek Dobson, CEO and Plan Manager, CAAT Pension Plan
As employers continue to think differently about workplace wellness and total rewards, organizations should explore a variety of benefits beyond the paycheck that address financial stressors.
Industry coverage shows that manufacturers are thinking differently about their business and workforce development strategies. Competition to keep qualified talent is already tight and will continue to tighten over the coming years, with about 12% of Canadians planning to leave their jobs within the next twelve months, almost double the rate in January.
Governments and businesses that want to remove supply chain risks, improve time to delivery, and enhance inventory management are investing in domestic production. However, there are not enough skilled and experienced workers to meet demand, which is intensifying employer efforts to engage and retain personnel. In a tight talent market, employers who proactively evaluate retention strategies to factor in flexibility and financial benefits can outpace their competitors.
Relieving stressors that underly and influence employment decisions can help inspire employee loyalty. As employee demands increase, keeping pace can be challenging especially where on-site work is the norm, as is the case in manufacturing, packaging, and engineering.
The Front-Line Flexibility Dilemma
Maintaining a healthy work-life balance is a key stressor for many Canadians. Calls for flexible work accommodations have grown louder with each year, driving some Canadian and US governments to propose “unplugging” policies and four-day workweeks. Leaders who are facing the front-line flexibility dilemma know that essential roles have limited capacity to support remote or flexible work options, and yet failing to meet employee expectations can cause disconnection and discontent in the workplace.
Cultures that support employee health and wellness will look to alleviate another key stressor among Canadians: achieving financial security. In a recent survey, salary and benefits were cited as the most important job feature, making cost-effective benefits that maintain compensation efficiency even more appealing.
Rewarding Employees Beyond the Paycheck
A workplace pension that offers inflation-protected lifetime retirement income is an emerging differentiator for financially stressed employees. In fact, 71% of workers would prefer a better pension over a higher pay, and 86% of employers who offer a pension say they are extremely or very important to recruitment, retention, and reducing stress.
Once a cornerstone of the employee experience, defined benefit (DB) pensions offset looming financial stress and anxiety but have significantly declined over recent decades, despite economic pressures that make it more valuable and relevant to workers today:
- Canadians are concerned about the cost of living impacting their ability to afford day-to-day expenditures (88%) and save for retirement (85%).
- Seventy percent of Canadians are worried that they aren’t saving enough for retirement, with women facing a higher risk of retirement insecurity than men.
- Employers are aware that household financial pressures are impacting the workplace and increasing pay to retain employees, with manufacturing wages up 8.2% and professional, scientific and technical services up 9.7%.
We don’t need to look far into the past to remember when a lifelong career in manufacturing was highly desirable and rewarding, partly because employees could depend on receiving lifetime retirement income. Bringing a modern DB pension to the workplace experience can help manufacturers attract and retain more workers to the sector, including women and skilled workers, when flexible work arrangements are not an option.
As employers continue to think differently about workplace wellness and total rewards, organizations should explore a variety of benefits beyond the paycheck that address financial stressors. It would align with the sector’s overall efforts to modernize and overcome career and satisfaction myths. With every effort underway to transform how work is performed – improving safety, cleanliness, and productivity – stepping up investments in holistic and financial wellness would demonstrate a continued commitment to nurturing talent throughout a fulfilling tenure.
