Executive Summary

Introduction

 

The Canadian Plastics Sector Council - Conseil canadien sectoriel des plastiques (CPSC) has identified worker retention/turnover and knowledge transfer as issues critical to the sector’s efforts to meet its anticipated skill needs. The ability of employers to address employment growth as well as replacement of turnover and retirements pose increasing human resource challenges. The CPSC has identified a strong demand, within CPSC and other sector councils, for research which consolidates available ‘best practices’ and solutions for dealing with these issues.  

 

This report - commissioned by the CPSC and carried out by the Canadian Labour and Business Centre (CLBC) - provides a comprehensive analysis of best practices in worker retention and knowledge transfer strategies. The report has two parts: 1) a review of the literature on best practices in retention and knowledge transfer, and 2) case studies of best practices within Canadian Plastics Manufacturing firms. Together, the documentation of these best practices can provide helpful and practical guides to other firms dealing with similar challenges.

  

The Importance of Worker Retention and Knowledge Transfer

 

When a business loses employees, it loses skills, experience and “corporate memory”. The magnitude and nature of these losses is a critical management issue, affecting productivity, profitability, and product and service quality. For employees, high turnover can negatively affect employment relationships, morale and workplace safety.  The cost of replacing workers can be high, the problems associated with finding and training new employees can be considerable, and the specific workplace-acquired skills and knowledge people walk away with can take years to replace.

 

The problem of turnover can be addressed through a variety of pro-active retention strategies: workplace policies and practices which increase employee commitment and loyalty. Knowledge transfer initiatives on the other hand, ensure that the knowledge and expertise of a company’s employees—its 'corporate memory'—are systematically and effectively shared among employees. They can offset the negative impact of turnover, but can also work pro-actively to reduce turnover by providing learning and skills development opportunities to employees - factors known to reduce turnover.

 

Employee retention and knowledge transfer are two elements of a more general concern that might be best termed ‘skills management,’—i.e., everything that has to do with recruiting, maintaining and developing the necessary mix and levels of skill required to achieve organizational and business objectives.

 

The Case Study Process

 

The companies that participated in the studies were drawn from five provinces, varied in size from 26 to 1900 employees, reflected the full range of industry products from packaging, building and construction, electrical components, furnishings, automotive and transportation, and included both unionized and non-unionized workplaces. This deliberate variety reflected an objective of the study, which was to explore the form which retention and knowledge transfer initiatives took in vastly different types of workplaces. 

 

Data were gathered through telephone interviews and a review of relevant documents. For each company profile, interviews were conducted with company officials knowledgeable about the firm’s human resource and organizational practices (such as HR managers and VPs, company presidents, CEOs, and owners). Where possible, interviews were held with workers or in unionized workplaces, union representatives, in order to provide an employee/union perspective on the retention and knowledge transfer measures and their impacts on employee satisfaction, career progression, and loyalty.

 

Best Practices in Retention and Knowledge Transfer

 

  1. Competitive and Fair Compensation is a fundamental starting point in most strategies to attract and retain employees. However, there is general agreement that compensation levels do not single-handedly guarantee employee retention. Common best practices include the use of industry surveys to benchmark and position wage and salary structures to be fair and competitive. (Case study examples:  Baytech; Canadian General Tower; Huronia Precision Plastics Inc; Innotech Precision; IPEX; Westbridge PET Containers).

 

  1. Adequate and Flexible Benefits can demonstrate to employees that a company is supportive and fair, and there is evidence to suggest that benefits are at the top of the list of reasons why employees choose to stay with their employer or to join the company in the first place. Many companies are responding to the increasingly diverse needs of their employees by introducing a greater element of choice in the range of benefits from which their workers can choose. Flexibility in benefits packages can enhance retention, as it creates responsiveness to the specific needs and circumstances of individual employees. (Case study examples:  Baytech; Canadian General Tower; Innotech Precision; IPEX).

 

  1. Innovative Compensation Systems and practices can have a positive impact on employee retention by motivating membership-oriented behaviour (commitment). Pay systems may also affect knowledge sharing and transfer if sharing, teamwork, suggestions, etc. are rewarded or recognized. Innovative compensation systems include gain sharing, skill-based pay and various types of bonus plans. (Case study examples:  Baytech; Canadian General Tower; Innotech Precision; IPEX; Westbridge PET Containers).

 

4. Recognition and Rewards include a diverse range of formal and informal, financial and non-financial, incentives given to individual employees, groups of employees or to an entire staff. They include such things as employee of the month awards, company-sponsored sports teams and social events, prizes, clothing, and so on. Recognition and rewards can contribute to a workplace culture of respect and appreciation for employees and work well done, and thereby reinforce employee commitment to the firm. (Case study examples:  Baytech; Canadian General Tower; Huronia Precision Plastics Inc; Innotech Precision; IPEX; Westbridge PET Containers).

 

  1. Training, Professional Development, and Career Planning are effective ways to enhance employee retention. Training constitutes a visible investment that the company makes in the worker, providing him or her with new skills, and greater competencies and confidence. Training often leads to work that is more intrinsically rewarding. Combined with effective communication about how an employee’s efforts at developing skills will lead him or her to more challenging and meaningful positions within the company, training encourages workers to make longer term commitments to their workplace: it permits them to see a future with the company. All of the companies we interviewed were very active in the area of skills training and professional development. Many have put in place effective internal promotion programs that allow even their unskilled and semi-skilled workforce to move towards positions of greater responsibility and remuneration within the company. (Case study examples:  Baytech; Canadian General Tower; Huronia Precision Plastics Inc; Innotech Precision; Interquisa Canada s.e.c; IPEX; Westbridge PET Containers).

 

  1. Recruitment & Orientation practices can be of crucial importance to keeping workers over the longer term. Employee retention is enhanced by ensuring a good “fit” between a company’s workplace culture—its way of doing business and the qualities that it espouses as valuable—and the interests, character, and motivations of the individuals that exist within it. Recruitment practices that emphasize not only formal qualifications (job-relevant technical ability) but also more general types of qualifications and dispositions on the part of the recruit can be part of an effective retention strategy. Our own case-based study revealed that employees in some workplaces, particularly the smaller ones, do more than merely work together: they often share similar interests and have a very strong inter-personal rapport, and these in turn help to bind them together as a cohesive whole. Indeed, the quality of interpersonal relations may contribute significantly to retention in its own right. Good initial orientation to the newly-hired employee can not only help to effectively integrate that person into the workplace but can also help to make the new person feel welcome and provide him or her information about how to cope with the demands of the workplace, and any possible problems that may arise. (Case study examples:  Baytech; Canadian General Tower; Innotech Precision; Interquisa Canada s.e.c; IPEX)

 

  1. Healthy Workplace or Wellness Initiatives take on a variety of forms, including those directed at the physical work environment (cleanliness, safety, ergonomics, etc.); health practices (supporting healthy lifestyles, fitness, diet, etc.); and social environment and personal resources (organizational culture, a sense of control over one’s work, employee assistance programs, etc.). Healthy workplace initiatives not only improve the health and well-being of individual employees, but contribute to business performance objectives including employee retention. (Case study examples:  Baytech; Canadian General Tower; Huronia Precision Plastics Inc; Innotech Precision; IPEX).

 

  1. Work-Life Balance programs recognize that employees have important family and extraprofessional obligations that compete with their workplace commitments. Practices such as dependent care leave, childcare subsidies, eldercare programs, counseling and referral, and flexible working hours allow people to strike a more meaningful and potentially less stressful balance between obligations at the workplace and obligations at home. Firms that operate on the basis of shift work may have employees who find it particularly difficult to balance family and work obligations. Flexibility and responsiveness on the part of employers can go a long way in helping employees to resolve such conflicts and be more productive at work. Policies that prove to be effective in helping employees to manage work-life balance in a shift work setting include (i) limiting split shifts, (ii) providing advanced notice of shift changes, (iii) permitting employees to trade shifts amongst themselves and, most importantly, consulting with employees about their work-life balance needs while planning shifts. (Case study examples:  Baytech; Canadian General Tower; Innotech Precision; IPEX).

 

  1. Job Design & Work Teams can enhance the intrinsic rewards of the job, making work more fulfilling, challenging, interesting, and stimulating. Practices such as autonomous or semi-autonomous work teams, ‘self-scheduling,’ and job rotation can not only improve retention but have also been shown to improve a number of other important indicators such as productivity, accidents and injuries and product quality. (Case study examples:  Baytech; Canadian General Tower; Innotech Precision; IPEX).

 

  1. Employee Participation & Communication. Open, responsive, two-way communications are vital to good employee retention, and should be considered as the basic building blocks of any effective retention practice. Most, if not all, of the retention strategies and practices fundamentally depend on a sound approach to communicating with employees. Without communications, many of these practices would be impossible to implement in any effective way. The case studies we conducted revealed considerable efforts to communicate with employees, through a variety of vehicles including employee surveys, regularly scheduled committee meetings, formal postings and newsletters, and personal discussions. Several companies keep their employees regularly up to date on the company’s financial performance, and maintain open-door communication policies. (Case study examples:  Baytech; Canadian General Tower; Huronia Precision Plastics Inc; Innotech Precision; Interquisa Canada s.e.c; IPEX; Westbridge PET Containers).

 

  1. Performance Appraisal practices that provide good feedback to employees and give them a view of their longer-term progress within the company