Increasing labor market challenges and the departure of the General Manager in 2016 caused problems with the site culture, hurting employee morale. A high temp-to-perm ratio and excessive overtime were creating a lack of camaraderie and a high burnout rate. As a result, the 2016 turnover rate was 450%. Kenco went to the customer with concerns and garnered its approval to enact immediate changes to improve the work culture and slow down employee churn.
With a new General Manager onboard in February 2017, Kenco’s first step was to perform one-on-one interviews with every employee at the site to discuss issues and suggestions for improvement. The consensus among employees was that they did not feel respected, there were no avenues for employee development, accountability was inconsistent, and they felt overworked. To address the most urgent issues, Kenco and the new General Manager developed a comprehensive, budget-neutral action plan:
- Recommit to Kenco’s Guiding Principles and build a work culture based on the “Golden Rule.” The team also created two site mission statements: “It’s not just a shipment, it’s a patient,” and “Do the right things for the right reasons.”
- Define what winning looks like – align goals and incentives around the customer’s KPIs.
- Institute weekly team meetings to build camaraderie, trust, and effective communication.
- Conduct a wage survey and secure the customer’s approval to increase wages and reduce the use of temps. The customer approved a $1.00-$1.50 hourly pay increase, as well as a $1.00 shift differential for second-shift associates.
- Start an “Employee of the Month” program.
- Expedite temp-to-perm rollover from 90 days to two weeks based on five key characteristics: 1) strong work ethic, 2) dependable, 3) positive attitude, 4) self-motivated, and 5) team-oriented.
- Implement more visual management within the training process and throughout the facility.
Wage increases were made official in September 2017, the temp-to-perm strategy was shifted to a direct-hire approach, and temps were completely converted to full-time employees by January. This included six internal promotions. Volume spikes are now proactively managed to avoid reliance on temp labor and excessive overtime. With morale and engagement up, the employee suggestion board saw a dramatic increase in participation. Most importantly, turnover dropped 225 percentage points from 2016 to 2017, with another 150 percentage-point drops expected in 2018.