Holding on to employees proves challenging in the metals industry, but service centers can successfully retain talent by demonstrating loyalty and offering incentives.The onslaught of COVID-19 in 2020 found some companies laying off and furloughing employees. Conversely, the year 2021 has been deemed the Great Resignation. And for good reason. While hiring the right employees continues to pose a challenge, getting them to stick around is another matter altogether.
“COVID has wreaked havoc on hiring and retaining. It’s probably been one of the most challenging years in decades,” says Chuck Stickler, president, Charles Stickler Associates, Lancaster, PA. Amanda Middendorf, vice president of Human Resources at Kloeckner Metals, a steel service center in Roswell, Ga., also recognizes retention difficulties. “Employee retention has certainly been hard in 2021, as it has been for most companies,” she says. “We’re certainly taking action to better attract and retain team members.”
In many cases, employees quit soon after they are hired. Charles von Herrmann, vice president of Human Resources at Steel Warehouse Company Inc., South Bend, Ind., has found that newer employees don’t stay in their positions for long. “They work for a period of time, and they disappear and we don’t hear from them again,” he says. He adds it’s common to lose workers in the first 60 days of employment despite the company’s high wages and stellar reputation in the community. But the problem of retaining staff is not just unique to his company. “I hear from my colleagues in this area and out in the world, that [new-hire turnover] has become the norm,” he says.
But among Steel Warehouse’s seasoned workers, this is not the norm. The company’s experienced employees have much lower turnover rates. “We have tremendous success in retaining longer-term plant and office employees,” many who have been at the company for 30 to 35 years, he notes. Still, the business is trying to attract new talent – such as high school students – to the trades.
Henry Valdivia also has found retaining employees challenging, often because of the fierce competition for blue collar workers. He is the general manager of Century Metals and Supplies Inc., a service center in Miami Gardens, Fla. He says many growing companies lure workers from their current positions to what they perceive as more promising positions. “And [this problem] is across our industry. It’s very difficult to retain employees,” he says.
Often, employees show up at Century Metals and Supplies’ warehouse for the first day of work, only to quit on the second day because they had initially envisioned an easier job. And “some employees early in the year have decided to just quit their job because the unemployment incentives have much more return than going to work,” Valdivia says.
The company’s truck drivers also come and go. “There’s such a high demand for drivers, and it’s really impacting us,” says Valdivia. “Our drivers are telling us, ‘You know, I’m looking for another job that’s paying better.’” So to retain truck drivers, the company has increased wages. “If we hadn’t done this, I think we would’ve had a lot more employees leave,” he says.
For Steel Warehouse, the most difficult position to retain is a slitter operator because working the machine is challenging and requires great skill. “We find that, in that particular function, we experience about a third higher turnover than in any other position,” says von Herrmann.
To combat the slitter operator exodus, the company has been even more proactive. The director of manufacturing and the plant manager meet weekly with the operators to see how work is going and to make sure they have all the necessary tools and materials to effectively do their job and feel comfortable. “That has actually improved the situation noticeably,” observes von Herrmann, “but it’s still not good enough. We still lose people.”
Kloeckner Metals is “seeing challenges across the board, but especially in production staff,” says Middendorf. “It’s hard to say why exactly. Our exit interviews suggest that there are simply so many opportunities out there that our employees are being attracted to try a new company, or even a new industry altogether.”
Creating Employee LoyaltyDespite the flight of employees, service centers that are loyal to their staff tend to fare better in the worker retention arena. Many employers have been fiercely loyal to their employees during the pandemic – refusing to furlough or lay them off, for example.
And the employees have paid that loyalty back in abundance. “I’ve had many people say to me, ‘Hey, after what we went through, this company stood by me. I’m just not interested [in another job],’” says Stickler, who notes that such statements make his job as a recruiter more challenging. He adds that standing by employees and taking care of them should be part of the corporate culture – and this, in turn, can bode well for retention rates.
Steel Warehouse also helps foster loyalty among employees by providing them with a sense of belonging. Along with offering sound wages and benefits, the company has a yearly engagement survey. “We’re not trying to get employees to show up for work; we’re trying to bring their hearts and minds with them,” von Herrmann says. “And we have action plans tied to all those and at each individual location to try to improve engagement. We work continuously on positive effective communication with our employees.”
One of the company’s core values is to promote from within. “We try to be proactive, talking to people about their careers,” he says. This year, for example, the company has created development plans for all its stellar performers. “The bottom line is people want to go to work for an employer where they feel part of the team. They would like to know that the employer actually cares for them, and we do care for our employees. They want to be appreciated,” says von Herrmann.
Century Metals and Supplies has also adapted to its employees’ needs. “We try to promote from within and give opportunities for growth by training and investing in employees’ professional development,” says Valdivia.
Thus the company encourages machine helpers to become operators, team leaders to become supervisors, and those who want to drive trucks to get their truck driver’s license. And because of the pandemic, the sales staff began working remotely. “We didn’t want to lose those key sales personnel, and it’s worked out well,” Valdivia says, adding that his company tries to make employees feel valued.
Besides offering a competitive benefits package, the business has established incentive programs to further motivate warehouse, production and office personnel, such as bonuses for accomplishing goals.
Kloeckner Metals “supports career advancement opportunities with tuition reimbursement and provides courses and training programs to develop leadership skills,” says Middendorf. Such programs include the Rotational Management Training Program, which helps new graduates or operations employees who want to become supervisors. These individuals participate in intensive on-the-job training. In addition, the company’s Leading for Success program is a manager-development initiative.
Kloeckner Metals also offers competitive compensation, including excellent retirement offerings and benefits. The business also provides flexibility to employees whenever it can. “[Staff] in the back office, sales staff and some administrative staff who can work from home are easier to retain,” says Middendorf. “Since the beginning of the pandemic, working from home has become a standard benefit.” She acknowledges, however, that it’s more challenging for warehouse and production staff to have such a flexible option.
“Kloeckner really cares about our employees, and we consider everyone who works for Kloeckner part of the family,” she says, adding 2021 witnessed the service center offering employee-appreciation activities, with more to come in 2022.
“Our KloecknerCares initiative encourages employees to give back to the local community through a three-day volunteer time off policy,” she says. “In the event of hardships caused by natural disaster or other catastrophic events, we utilize Kloeckner Metals Relief Fund, our nonprofit arm, to look out for each other.”
Yet, Stickler warns that a threat to employee loyalty is on the horizon – mandated COVID-19 vaccines. He says someone who loves his career recently called him and said, “‘I might need a new job. I might have to get a mandated vaccine and I’m not going to do it.’” He notes that a company may have to have a different COVID-19 protocol in each of its facilities. And, he points out, the rules for mandated COVID-19 vaccines are nebulous.
By employing various retention strategies, employers stand a better chance of creating a team mindset and a sense of belonging. As von Herrmann notes, “We try to be the workplace that we want to work at.”
[Sidebar:]
Great Expectations
Retaining the right employees starts with an effective interview process, followed by a structured onboarding process, as well as employment agreements, according to Danny Kerr, managing partner and founder of Breakthrough Academy, Abbotsford, British Columbia. The business helps entrepreneurs in the trades grow their companies’ profitability and effectively manage their time.
Kerr notes that, in terms of expectations, employees and employers must be on the same page. He believes that job interviews reveal whether prospective employees have a different set of expectations of what a position entails than their employers. That’s why Kerr believes in a critical interview process – to clarify what the position entails, to weed out the seemingly poor performers and begin to build a sound relationship with potential employees. “Spending one- to two-hour interviews on somebody helps build that relationship,” he says. “The bad people don’t like critical interviews, and it pushes them away, and that’s what you want anyway.”
Kerr’s point is that potentially good employees want a critical interview. Without one, the interviewee might feel that he or she got short shrift and say, “‘this person barely asked me any questions,’ ‘they really sold me on a position and they don’t know what they’re looking for.’”
Kerr observes, “When I interview someone, I’ll go into their past experience, their life, the hardest life experience they’ve ever been through, their biggest goals they’ve set in their life and how they work through it,” continues Kerr, “and I’m actually giving them feedback on their strengths and weaknesses.” At the interview, Kerr also advises the prospective employee how he or she can work on these weaknesses.
Kerr recommends that, once the employee is hired, the employer and employee sign an employment agreement. Such an agreement clarifies the employer’s expectations, the employee’s roles and identifies the supervisor to whom the employee will report.
This document helps “the employee feel protected, so they’re not just doing a bunch of random things and thrown in many different directions,” says Kerr. “They know early on what they’re signing up for and they know the expectations that [employers] have.” This agreement conveys what the employee needs to do throughout the year.
Kerr adds that each employment agreement should include deliverables, which are “basically a set of numbers that someone has to achieve by year-end to be worth their weight.” For example, a production staff member’s goal could be to produce a certain amount in a 40-hour week. The supervisor indicates the different aspects of the employee’s job to be in charge of to ensure that goal is realized.
Onboarding should also be a structured process, according to Kerr. “I think it’s important that when you’re onboarding somebody to have a structured plan for them and to actually fulfill that,” he says. “If I have a new employee coming on, I have a two-week structured hour-by-hour plan for them.” During this orientation, the new hire spends time with Kerr and some of the company’s team members, as well as reviews procedures and a carefully laid-out orientation plan.
Kerr also indicates that the supervisor should be more of a coach who develops the team rather than a boss who rules with an iron fist. To retain people long-term, Kerr does something called GSR every week with his staff – Goal Setting and Review. “Every week I’m going to go over [with the employee] how the last week went, what went well, what didn’t go well, if you met your goals, and if you missed your goals and by how much,” he says, adding that they then set another goal together.
And during this process, Kerr transitions from being his employees’ boss to being their coach. “Especially for the younger generation, they’re seeking mentorship; if [a supervisor says,] ‘just do your job; see you later,’ they’ll feel pretty abandoned,” says Kerr, emphasizing that helping employees attain their goals should be done in a supportive way. “A supervisor could say, ‘I’m here to help you and to work with you.’ People read [into] that and they think, ‘this person is pretty committed to me,’ and they’ll show up to that. The bad people will leave you anyway, and that’s fine. I’d rather learn that in the first week [than later].”
Kerr believes in having incentives to encourage employees to meet their individual and team goals. He believes team accountability is important so individuals want to avoid letting the boss and their teammates down.
Kerr offers a warning: “If you’re not going to actively engage and do the hard work to onboard, interview, train and develop, then your competition will get these [employees].”
For more information and to find a free sample employee agreement, visit https://www.btacademy.com.
Caption:Production employees have been the most difficult to retain for many service centers.
(Photo courtesy Steel Warehouse Company)