Availability. Quality. Cost. The “big three.”
Those three words are probably at the tip of your tongue when you're comparing various locations for your new plant. After all, you want to make sure that your company will have the best possible labor force to operate your new facility.
Especially nowadays, with record low unemployment and tight labor markets throughout much of the United States, labor issues are probably your No. 1 concern. Are they intelligent? Will you be able to find them -- the smart ones -- in sufficient numbers? Can you do it at a price that will allow you to remain profitable?
There's a fourth word that should also be at the tip of your tongue ... and that word is dependability.
Are the typical workers dependable? Will they show up for work on time, consistently? And how do you measure something as ambiguous -- yet absolutely critical -- as that?
There are a number of ways.
Every year, in the fall, Expansion Management magazine evaluates 1,000 secondary school districts from around the country in order to provide our readers with a way to compare potential work forces. Among the areas we measure is the high school graduation rate.
This will tell you if the local students -- who will ultimately enter the labor force -- finish what they start. It's a quality indicator the armed services have used for more than a generation and is a reliable, though not foolproof, measure of work ethic and "stick-to-it-ive-ness."
Another way to look at dependability is to see if a community's work force has low turnover and low casual absenteeism rates.
Talk to other companies in the area that are similar to yours, either in terms of size or product. Find out what their monthly employee turnover rates are. If they're less than 1 percent, that's great. If they're more than that, find out why. It may not be cause for concern. However, if they're a lot more than that, watch out.
You're about to invest a lot of money on hiring and training workers to operate your new facility. A 3 percent monthly turnover rate means that, statistically, you're replacing your entire staff in less than three years. At a 4 percent turnover rate, you'll be replacing everyone in two years.
If you're operating a fast food franchise, those are probably great turnover numbers. If it's a multimillion dollar manufacturing facility you're running, those numbers mean you're headed for expensive labor problems that will also likely have a direct impact on the quality of your final product.
While you're talking to those other companies in the area, find out what their monthly casual absenteeism rate is. If it’s 3 percent or less, that's terrific. If it's more than that, be on the lookout. Remember, you're paying people based upon the expectation that they'll show up for work on time, every day.
Sure, you build a little fudge factor in there for the occasional absence, but a high casual absentee rate speaks volumes about the work ethic, or lack thereof.
So next time you're evaluating and comparing work forces among various locales, don't just look at “the big three.” Also take a hard look at dependability because, to a large extent, it can have a major impact on each of the other three: quality, availability and cost.
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