Today’s top manufacturing firms are hardly in the category of your dad’s or granddad’s factory of yore anymore. At least, that’s according to the latest Great Place to Work Report on this sector, Best Workplaces in Manufacturing & Production 2016, released a week ago today.
The report cites dramatic changes in industrial production and “a new employment deal defined by high levels of trust” that are prompting companies to “retool their relationships with employees as they compete for a shrinking pool of skilled workers,” says the report’s release.
The top manufacturing and production workplace for 2016 is Houston-based energy company Hilcorp. Electronics manufacturer Tactical Electronics, headquartered in Broken Arrow, Okla., ranks second on the list of 15 firms, followed by orthopedic surgical supply manufacturer Arthrex Inc., based in Naples, Fla.
As Michael Bush, CEO of Great Place to Work, puts it, the leading manufacturing and production companies “know the game has changed.”
“The best workplaces in the industry know they can’t just churn out their products with warm bodies,” he says. “They need to focus on attracting and retaining top talent by putting people first, in a high-trust culture. That’s how they are winning in the market.”
The list is based entirely on anonymous employee feedback from more than 34,900 randomly selected employees from companies in this sector. The winners do seem to defy outdated perceptions of working in factories and manufacturing plans.
For instance, in terms of job security, 92 percent of employees at companies on the list say their leaders would lay people off only as a last resort. That’s even better than the response from people at companies on the broader ranking of the Fortune 100 Best Companies to Work For list, which includes organizations in healthcare and technology that are experiencing much faster growth.
And forget about the stereotype of fat-cat executives in conflict with poorly paid assembly line grunts. An average 82 percent of employees at the best manufacturing and production workplaces say they receive a fair share of profits. Hilcorp, for example, gave out $100,000 bonus checks to all employees last year after it met five-year goals.
In fact, here’s the official rundown from the report of some of the neat things gong on at top-winner Hilcorp.:
- Buy-In Incentive Plan: This unique long-term incentive program provides all full-time employees with the opportunity to build personal wealth over time by allowing them to participate in Hilcorp projects and, as the projects start generating positive cash flow, the employee begins to share in the return.
- Bonus Program: Every employee’s annual bonus is aligned with company goals — “When Hilcorp Wins, We all Win” — and bonus payout percentages are the same for all full-time employees. Hilcorp’s bonus stretch goal is 60 percent and, during the past five years, employees have received an average of 36 percent of their base salary.
- The Hilcorp Giving Program: The company will establish a charitable trust of $2,500 to help employees support any U.S.-based 501(c)(3) organization. Hilcorp also helps increase an employee’s giving power by providing ongoing machining gifts up to $2,000 per year. Employees have donated more than $7 million to matching charities of their choice through this program.
- Mega Plans – BHAG’s: Every five years, Hilcorp sets a Big Hairy Audacious Goal (BHAG) that is truly a stretch goal with equally audacious rewards! For example, the latest BHAG, Dream 2015, was recently achieved by doubling the rate, reserves and value in five years. Everyone received (prorated based on hire date) $100,000!!!
As a result of their employee-focused approach, companies that made the list have an average turnover rate of just 7.2 percent, much lower than the national industry average of 13 percent reported by the Bureau of Labor Statistics.
Keeping that turnover low will offer a real advantage to these companies in the years ahead, the report says. As the president of the National Association of Manufacturers recently pointed out, the sector is expected to create 3.5 million new jobs in the next decade, but a lack of skilled workers is likely to leave 2 million of them unfilled. On top of the skills deficit, the industry also faces the challenges of an aging U.S. workforce and rising labor costs in Asia that make it easier to “insource” many of the jobs that left the United States in decades past. It continues:
“In this context, the Best Workplaces in Manufacturing and Production aren’t just exceptional for their people policies. They’re at the forefront of an entire industry that will need to create high-trust work environments in order to stay competitive in the years ahead.”
And in the words of Anil Saxena, Great Place to Work partner and workplace-culture consultant:
“There’s a lot of hiring in manufacturing, and there’s a lot of demand in manufacturing. [The perception of the sector as less-than-glamorous needn’t be a barrier to retaining valuable people.] If you treat your employees with respect and you involve them in your decision making, they’ll go the extra mile for you, regardless of their job title.”