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April 17, 2000 02:00 AM

Firms share solutions to high turnover rate

Steve Toloken
Assistant Managing Editor
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    INDIANAPOLIS — Metro Plastics Technologies Inc. had an unusual solution to workers constantly leaving for other jobs: It cut their workload to 30 hours a week, still paid them for 40 hours with full benefits, and added an entire shift. Great for workers but bad for the company, right?

    Wrong. Metro reports that turnover dropped, morale improved and the firm got better.

    "It made us more competitive," said Jeff Leonard, quality assurance manager for the Noblesville, Ind., custom injection molder. "It let us retain work we were preparing to lose. It made us a more attractive molding company."

    Plastic processors like Metro gathered March 30 in Indianapolis to trade ideas and listen to Fortune 500 firms talk about their work-force issues, at a seminar sponsored by the trade group Mid-America Plastics Partners Inc.

    Metro's solution is a dramatic response to tightening labor markets.

    "I don't want to say we were competing with McDonald's, but they were getting very aggressive," Leonard said.

    The 30-40 shift comes with a catch that can be tough for employees, though. They don't get paid for breaks or lunches, and if they have unexcused tardiness, they lose the 10 hours of bonus pay and only get paid for working 30 hours, he said.

    Initially, Metro lost some long-time employees, but found that turnover has dropped dramatically since, to about 10 percent, he said.

    The company finds it easier to attract people. Leonard said he interviewed three people with injection molding experience to work the overnight shift the day before his speech, and hired all three to start the next day.

    The schedules cost more in direct labor, but bring stability and let management focus more on "value-added issues," he said.

    Battling turnover was a key problem for many firms at the forum. Many said they lost most of their new hires in the first 90 days.

    Plano Molding Co. in Sandwich, Ill., has replaced its entire night shift of 35 employees in the past year. That makes training tough, and hurts production, said Jim Vrtis, production manager at the injection molder.

    But Vrtis does not think wages are the problem. Rather, it's the nature of the work: "Making plastic tackle boxes is not a glamorous job."

    The company tries things like Hawaiian shirt night, and knows it must be more flexible with scheduling, he said.

    Scheduling can be tough for molders, though, because firms make money when machines run 24 hours a day, said Ken Williams, operations manager for Franklin Plastic Products Inc. in Franklin, Ind.

    The company has flexible schedules for assembly workers, including a 9 a.m. to 3 p.m. shift for parents, he said.

    But the 2 percent unemployment rate in Indiana means "we are probably employing the unemployable" and seeing turnover hit 50 percent a year at the company, Williams said.

    Fast-food restaurants that pay $7.50 an hour and offer $500 signing bonuses hurt companies like Franklin, he said.

    "You need a competitive wage," he said. "After that, what retains people is a culture that recognizes the worth of the individual. Today, that is more recognized than in the past."

    Dan Smith, general manager of American Plastic Moldings Corp. in Scottsburg, Ind., said retirees will be the next big source of labor, particularly considering that the federal government just loosened rules on how much a retiree can make before Social Security benefits are cut.

    APM used to rely on welfare-to-work programs, but found that those workers would leave for other jobs after being trained by APM, Smith said. And, according to APM human resources manager Joyce Walker, more people leaving welfare now have serious problems like drug abuse.

    Smith said he left the event with a concrete idea that came from a speaker from Wal-Mart Stores Inc.: Spread orientation out over 90 days to avoid overloading workers with more information than they need, he said.

    "If you can keep 'em 90 days, you got 'em," Smith said.

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