Working on Workforce: Productive Firms Have Fewer Problems Finding People

white hat ladyJacobs, describing a growing wave of what she calls “Misty Harbor Pride,” said she only needed to hire five people in November for one of the boat manufacturer’s 60-person departments—and four of those were new hires to aid with an expanded production line. Meanwhile, in a different department one-third the size, workers have been slower to adopt the company’s new culture. Jacobs hired eight people during the same month to replace workers who had left.

“You can have that mentality of ‘Why am I doing so much?’ or you can have that mentality of ‘Sure, I can do that. Why don’t I help you?’ It’s all about how you present it,” Jacobs said. In general, with the focus on employee-driven productivity, “we have more of an ownership attitude. People are happy to come to work.”

Companies across Iowa report similar benefits from following Lean manufacturing and other productivity practices. Businesses that incorporate Lean tend to have less worker turnover and to be more attractive to available job applicants, experts say. Both are valuable traits in a state where manufacturers have long reported difficulties in finding skilled people willing to work at what the companies consider a practical wage.

The trick, according to the experts, is that you can’t simply look to Lean to solve your hiring problems. Long-term benefits come only for companies that embrace the entire philosophy—a philosophy popularized by Toyota Motor Corporation, which rose to dominate its industry by encouraging employees to continually search for ways to boost quality and bleed waste out of the production process.

“Toyota used to say, ‘First we build people, and then we build cars,’” said CIRAS program manager Jeff Mohr. “If your reason for using Lean, your sole reason, is to cut costs, then it may be counterproductive.

hard hat dude“That’s not what Lean is about,” Mohr said. “Lean is about doing more with what you have and building an army of problem solvers rather than relying on a small team of problem solvers.”

Pella Corporation in Pella, Iowa, has been embracing Lean production methods since 1993, to better utilize the materials, time, and resources it uses to manufacture its windows, doors, blinds, and shades. “Our products were some of the most expensive available on the market,” said Gina Singer, continuous improvement manager for the company. “We needed to rework our pricing, while maintaining our product standards and driving profit.”

Over the course of several years, the company streamlined its production process, continued to reduce waste, and reorganized team members and their duties. The company used its extra capacity to “shift processes from our distribution organization to Pella, freeing our distributors to focus on sales and service,” added Singer. For example, Pella started using its own labor to add prefinish stain and colors to its windows, thereby creating more value for the consumer.

Teresa McMahon, executive director of the nonprofit Iowa Lean Consortium, stresses that “Lean isn’t a silver bullet” and that simply “trying to cut (costs) is not going to lead you to prosperity.” Rather, it’s building a culture where employees are actively involved in making their work run more smoothly—and where they’re able to do so without fear of talking themselves out of jobs.

Tony Hogan, president and chief executive at Kreg Tool Company in Huxley, said his still-growing company has been following Lean practices for more than three years. But Hogan believes Kreg has felt less pain in hiring from the so-called worker shortage than it would have if the company had not built a workplace environment that encourages employees to be more productive.

“Culturally, Lean only works as a longterm philosophy,” Hogan said. “It doesn’t work if you’re focused on the short-term investment. . . . It’s all about employee engagement and involvement. As soon as that engagement results in ‘I don’t have a job,’ then the whole thing falls apart.”

“We have been successful, in our minds, because of the culture that we have here,” Hogan said. “Once they see what we’re about, they want to join our team. Without that cultural impact, it would be a lot more challenging.”

Gary Carlson, vice president of community relations for HNI Corporation, the Muscatine-based maker of office furniture, said it’s difficult to quantify how much of his company’s lower turnover and higher productivity came as a result of Lean. “Because we do a lot more (in terms of production) as a Lean company, we haven’t needed as many people,” Carlson said. “But because we’re having growth, we still need more people.”

The bottom line is that Lean will certainly help, but it won’t eliminate workforce issues in a growing company.

“If you’re only going into it as a reason to reduce your headcount to produce the same output, then try something else,” Carlson said. “You’re not genuinely into it. I think Lean really has to become part of your culture.

“There are a lot of great things that can come from Lean,” he said. “But you really have to become invested.”

 

This article originally appeared in the Winter 2016 edition of CIRAS News. You can find the rest of this issue and more of CIRAS News on our website.