Tyson Foods Inc. has nearly halved its hourly work-force turnover rate in the past three years using a combination of strategies built around what the company calls its three guideposts, its core values, cultural tenets and team-member bill of rights.
The Springdale-based meat processor has reduced hourly employee turnover, or the rate at which hourly employees must be replaced because they either quit, are fired or are laid off, by 44 percent.
Tyson Foods is one of the world’s largest meat processors and employs 115,000 people in the U.S. and other countries.
Donnie Smith, the company’s president and chief executive officer, told of the reduction during the annual shareholders meeting in early February.
Gary Mickelson, spokesman for Tyson Foods, said the company attributes the improvement in employee turnover to many factors, including the guideposts and fear of an uncertain job market for the unemployed during the recession.
The unemployment rate in the United States averaged 5.8percent in 2008, 9.3 percent in 2009 and started 2010 at 10.6 percent in January before dropping to 9.3 percent in November, the most recent month for which data are available, according to the Department of Labor Force Statistics.
The Tyson guideposts primarily are built on the beliefthat people want to be treated with dignity in their work and the workplace, said Rod Nagel, senior vice president of human resource operations at Tyson Foods.
Tyson Foods’ core values first says it is a company ofpeople engaged in the production of food, seeking to pursue truth and integrity. The first of the Cultural Tenets is “We care about each other.”
And the Team Member Bill of Rights outlines not just the federal and state benefits that employees have but the additional “rights” workers enjoy at Tyson Foods.
Mickelson said the company has made a concentrated effort on discovering the underlying reasons for employee turnover.
“This is significant to our business since maintaining a stable workforce is important to our continued ability to consistently and efficiently produce high quality products,” Mickelson wrote in a e-mailed statement Wednesday.
Richard Lobb, spokesman for the National Chicken Council in Washington, D.C., said the hourly employment turnover rate for the poultry industry is commonly believed to be high, although the council has never surveyed its members about the rate.
Tyson Foods would not disclose the actual hourly turnover rate because it considers that information a competitive advantage over other companies.
Kathy Deck, economist and director of the Center for Business and Economic Research at the Sam M. Walton College of Business, University of Arkansas at Fayetteville, agreed.
“It goes directly to the bottom line,” she said of employee turnover rates.
It is critical, in many industries, for companies to keep employees on the job for longer periods of time, Deck said.
“Employees gain valuable training while on the job. If a company loses the employee, it loses the investment made in that employee,” Deck said.
Reducing employee turnover rates reduces investment costs of the work force and lets the company reap the returns on that investment and the experience of existing employees, Deck said.
Nagel said one of the tools used to identify some problems in employee retention was “The 5 Whys.”
The 5 Whys is a question and answer technique developed by Sakichi Toyoda for the Toyota Industries Corp. to move past the symptoms of a problem to get to the root cause, according to a paper on the topic published by Asian Development Bank in 2009.
The premise of the technique is that, starting with the problem and asking why the problem exists, by the time the fifth “why” is asked the nature of the problem and its solution will become clear.
Nagel said that the process isn’t locked into just five levels.
“You go as deep as you need to go to discover the source,” he said Wednesday.
He gave an example of how the technique worked.
Some processing workers were frustrated with the lack of sharp scissors they use to portion chicken breast meat. Knowing that frustration fuels employee turnover, a team studying the problem asked why the scissors were not being sharpened. They found out the worker who usually sharpens the scissors for that part of the plant was on a leave of absence without a qualified backup person assigned to do his job. Another why question discovered that substitute workers were trying to operate the sharpening equipment with varying degrees of success, Nagel said.
The result was that the plant trained a backup sharpener to ensure the scissors are properly sharpened and performance audits are conducted regularly on the scissors, Nagel said.
During the shareholders meeting, Smith said the reduction in turnover was an example of Tyson Foods’ focus on sustainability, which the company addresses in four categories - planet, people, products and profits.
To contact this reporter: [email protected]
Business, Pages 43 on 02/20/2011