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Losing staff is a headache. Training someone up, only to have them leave a week later, costs money, time and demotivates the rest of your staff who are left picking up the slack.
Warehouses and manufacturing businesses struggle with high staff turnover rates as employees on minimum wage have little to tie them to a specific employer if a new job opens up that's closer to home.
The costs associated with losing staff—particularly full-time employees—can be staggering, with estimates suggesting it can cost a third of an employee’s salary.
Retention isn’t just a nice-to-have. It is crucial to profitability, productivity and, ultimately, long-term success.
The cost of losing full-time staff
When employees leave, businesses don’t just lose an individual—they lose an investment. For a minimum-wage worker in a warehouse, it might seem less important but the drain on productivity, the knock-on effect for other team members and the additional cost of finding, and hiring, a replacement quickly add up. It includes:
- Recruitment costs (advertising, agency fees)
- Lost productivity
- Potential overtime costs as current staff cover for the missing employee
- Onboarding and training expenses for new hires
- Increased risk of losing established staff who may feel demotivated by their increased workload.
For large companies with high staff turnover, this can mean tens of thousands—if not millions—of pounds each year. In fact, according to a 2020 government report on training and workforce development, employers had invested around £42bn in training over the previous 12 months.
What motivates employees to stay?
For factory, warehouse and manufacturing businesses, retention strategies need to be tailored to the environment. Unlike office-based roles, working from home isn't possible and other "wellbeing" strategies can fall flat. Knowing what matters to your employees is vital to ensure any effort you put into perks or incentives will actually work.
We spoke to high volume recruiters and asked how they keep retention rates high. These were the top strategies:
1. Free or subsidised meals
On-site meals or discounted canteen services are powerful motivators for minimum-wage workers. Providing free meals reduces daily expenses and makes it easier for shift workers to eat healthy, filling meals when working anti-social hours.
2. Flexible hours
Working from home isn't possible. But, companies can offer flexibility to keep workers engaged. Allowing staff to swap shifts or have more say in their schedules can help them manage school pickups and drop offs, other caring responsibilities and find a pattern that suits them as well as the business.
3. Training and development
Offering training programs that provide employees with opportunities to upskill is another great retention strategy. Warehouse and factory workers often stay with employers who offer pathways for advancement, even if the immediate pay increase is minimal. For example, investing in forklift training or giving staff a clear pathway to promotion into supervisory roles can give employees a sense of progression and purpose, encouraging long-term commitment.
4. On-site facilities
Whether it’s a gym, a comfortable break room, or even something as simple as safe locker storage, on-site facilities can enhance the day-to-day experience for workers. A more pleasant working environment increases job satisfaction and reduces the likelihood of turnover.
5. Shuttle bus services
Transportation challenges are common in these sectors, especially when warehouses or factories are located in remote areas. Offering a shuttle bus service to and from work ensures that employees can get to their shifts on time and reliably, reducing absenteeism and no-shows, a key pain point for recruitment agencies and large employers alike.
The role of onboarding in employee retention
Onboarding is often overlooked but it is one of the most critical stages in ensuring long-term retention. A study by Glassdoor shows that a strong onboarding process improves new hire retention by 82% and productivity by 70%, often within the first few weeks. This is a serious issue, particularly in recruitment-heavy environments, where ensuring staff actually turn up and stay is a constant challenge.
Here are a few ways businesses can improve the onboarding process:
- Clear expectations: During onboarding, ensure that new hires are clear on their responsibilities, shift schedules, and any other relevant details. When there’s confusion, it leads to dissatisfaction and people quitting.
- Buddy programs: Assigning a buddy to help new employees navigate their first few weeks can reduce feelings of isolation and confusion. This support system can increase the likelihood of the employee staying through the critical early phase.
- Company shuttle bus services: Transport can play a significant role in improving reliability. For example, a RideTandem bus service ensures employees arrive on time without worrying about unreliable public transport, a significant factor in retention for factories and warehouses located in places with poor, or no, public transport.
How to create a positive culture
Culture is often considered a ‘soft’ factor in employee retention, but it’s arguably one of the most powerful tools companies have to retain their staff. For workers in minimum-wage jobs, creating a sense of belonging can make them think twice about leaving for another job down the road, even if the pay is the same.
1. Feedback and recognition
One of the simplest ways to create a positive work environment is through feedback and recognition. Employees need to feel seen and valued, regardless of their role or salary. A structured feedback program, where managers regularly check in and offer praise for a job well done, can dramatically improve engagement.
Recognition programs, such as ‘Employee of the Month’ or even small bonuses for achieving certain targets, go a long way in making employees feel appreciated.
2. Building a sense of community
Creating opportunities for employees to bond with each other can help foster a stronger sense of community. Organising team lunches, celebrating birthdays, or even providing company-branded apparel can strengthen workers' emotional connection to the company. This sense of camaraderie reduces the temptation to switch to another employer.
3. Regular surveys
Soliciting feedback through surveys gives employees a voice in the company and allows management to identify pain points that may lead to turnover. Regularly acting on feedback shows that the company values employee opinions, fostering loyalty.
Reduce turnover = increase engagement
To recap, businesses can reduce turnover and increase employee engagement by focusing on the following strategies:
- Provide benefits like free meals, shuttle services, and on-site facilities.
- Offer flexible shift schedules and opportunities for training and development.
- Ensure a smooth onboarding process, emphasising mentorship and clear communication.
- Foster a positive company culture through feedback, recognition, and a sense of community.
By prioritising these strategies, companies can reduce turnover, improve morale, and retain employees for the long term.
