Retain and Retrain, or Replace?

“The only thing worse than training your employees and having them leave is not training them and having them stay.” — Henry Ford

Pioneer Service was nearly a victim of the truth behind the quote above from Henry Ford. The late 2000s were the start of a rough time for U.S. manufacturing. My company was no exception. As an owner, the realization that my company was in danger of failing kept me up at night. It was one part pride, one part self-reflection and about eight parts seeing the cars in my company parking lot. Each car was a family, and I had watched many of those children grow up year after year at our company events.

I was determined not to close my doors. My core business strategy was (and still remains) people first. Survival meant adapting, which meant we had to reinvent ourselves as a company with a move into Swiss CNC machining. We had work to do, but we weren’t laying anyone off.

The list of things to learn was extensive, but the payoff would be everyone continuing to earn a living. That said, retraining essentially turns an experienced employee into one who is overpaid and under-qualified. The $30-per-hour employee is now doing a job I could hire someone else to do for $15 per hour. Overpaying under-skilled labor is unsustainable for any business.

One might think most employees would at least consider such an initiative necessary to maintain our collective income. I certainly thought so.

I was wrong. Oh, was I wrong.

Not about everyone, of course. Some were willing to learn and understood how their future and the company’s well-being were tied together. But others were...comfortable. They had put in years of effort and didn’t want to hear that their hard-won knowledge was obsolete.

Being willing to adapt requires admitting that your current skills aren’t measuring up anymore. Everyone – myself and my managers included – needed to make that admission. Complicating this effort was that many people paid the idea lip service, but had no intention of following through.

I considered it my role to lead by example and inspire my team to hone their skills and seize their future in manufacturing. It was not immediately gratifying. For each employee who was willing to try, I had one who only wanted to push back. All of our training to handle our new machines and methods had to come from outside the company. I hired consultants for weekends, doubling down on the cost of training with overtime for everyone involved. When I was lucky, my employees attended. When I was unlucky, my employees attended, but argued with their trainers and refused to learn anything. These individuals quickly became capable of only manual labor, and several refused to do even that.

Some of my production team needed to improve their English, learn how to navigate our new ERP system and learn how to read GD&T blueprints. Some complied, some did so grudgingly, some flat-out resisted every step of the way. Some even took a pay cut to go elsewhere, which I now look back upon with gratitude.

Eventually, I had to hire to fill empty positions. Although the new hires were less experienced and relatively inexpensive, they knew more than many of my tenured employees about the technology. A few of my “old guard” took almost every opportunity to create drama with employees they deemed a threat, mainly because the work of the new hires was twice as good for half the cost.

In hindsight, it would’ve been far less costly and emotionally draining to replace my tenured employees with agreeable and affordable alternatives. Out of the 40 employees who were at my company when the retraining efforts began, fewer than 10 remain to this day.

So was it worth it? Do I have regrets?

Yes, it was absolutely worth it. I found the employees we would need to compete. I also found the ones who were unwilling to learn, and I accepted them for what they were: a necessary step for our team’s survival.

The only thing I regret is trying too hard to protect everyone. I disincentivized learning by making everyone feel too safe. If I had to do it over again, I would properly evaluate each employee’s willingness and readiness to undergo training before encouraging anyone to stay. I would assign deadlines, maintain metrics and establish consequences. Once they’d proven their commitment to change by making progress, their future and position would be secure.

Clearer expectations and consequences give complacent workers fewer reasons to stay, and me fewer reasons to keep them for too long. Cutthroat firings aren’t necessary. Although I was too slow to dismiss the stubborn ones, I helped some of them find jobs elsewhere. Doing so sooner would’ve saved everyone frustration and stress.

The answer to the question of whether to “retain and retrain, or replace” is never completely up to the business owner. As an employer, it would be easy to say “no one gets fired, they fire themselves” or “hire slow, fire fast.” Recognizing a poor fit and allowing everyone to start from scratch can be a boon for everyone involved. I believe in those sayings — for the most part.

But not all. At the end of the day, it’s up to us to establish clear expectations for performance and growth, to our employees to answer the question for themselves, and back to us to hold them accountable. The health of my business — the livelihood of the ones willing to learn — depends on it.