Слике страница
PDF
ePub

some security of tenure and have opportunities to make themselves of added value to the company? If so, the centralized employment department should find it. The successful industry of the future is going to be set against a social background in which a healthier status will exist not only for men's bodies but for men's minds. It is in developments such as these that the centralized employment department can be of vital advantage. And the advantage is not an intangible one, for it will be found to translate itself definitely and permanently into dollars and cents.

HOW TO REDUCE LABOR TURNOVER

BY BOYD FISHER,

Vice-President, Detroit Executives' Club.

No one knows how much it costs to break in new men. The most conservative estimate of any authority is $40 per man, but this, as well as every other estimate, is, after all, only an estimate. No one has yet used an exact cost system for recording the waste of unnecessary hiring and firing. I myself prepared such a system and submitted it to the employment managers' division of the Executives' Club last September. As yet no one has put it into effect, although several plants have promised to do so as soon as conditions warrant.

THE GREAT COST OF LABOR TURNOVER

Aside from the rather careful estimates made by W. A. Grieves and Magnus Alexander, we have only occasional flashes of evidence as to the great cost of labor turnover. One of the most startling evidences, which has come to my attention, may be gleaned from the report of a meeting of the production methods group of the Executives' Club on September 20, 1916.

Mr. J. T. B. Rheinfeldt, head of the manufacturing standards department of the Packard Motor Car Company, had explained the methods by which his department had rated the expected capacity of every machine and production center in that great plant. He gave out the information that the ideal capacity was 25 per cent higher than the expected capacity—that is, his company has 25 per cent more equipment than would be necessary to turn out the work, if it were not necessary to allow for delays, breakdowns and lowspeed production.

I now quote from the minutes:

Mr. Beatty asked if the standard time allowed to the men were included in the 25 per cent allowance or not.

Mr. Rheinfeldt said that whenever a method was changed, a new time study was made. The allowance of 25 per cent was a blanket to cover shortages, absence, keeping the machine going, repair, etc.

Mr. Fisher asked how much of the 25 per cent was due to the turnover of labor

—that is, if there was no absence to be contended with, how much this 25 per cent could be reduced.

Mr. Rheinfeldt said that if the labor turnover were zero, the factor could be eliminated entirely, as the allowance on the time study would care for the repairs, breakage of tools and machines, etc.

Think of this for a moment. The physical equipment of the Packard Motor Car Company is worth, in round figures, $9,000,000. If the turnover of labor were reduced to zero, this huge investment could, in Mr. Rheinfeldt's opinion, be reduced by $1,800,000. The interest at 6 per cent on this amount of money is $108,000 per an

num.

Nor is this all. Is it not fair to assume that labor cost would also be reduced 25 per cent if there were no turnover? If so, out of 12,000 employes the wages of 2,400 men and supervisors, anything from a million and a half to two and a half million dollars a year, could be wiped out.

Now a word about the reliability of the above figures. They are not worth very much. In the first place, Mr. Rheinfeldt may have been in error in estimating his ideal capacity. He may have overstated the case, too, when he gave it as his opinion that a complete elimination of turnover would eliminate the 25 per cent extra capacity added to the standard time allowance. Furthermore, I have purposely avoided giving exact figures on equipment investment and on the wages of one-fifth of 12,000 employes. I do not want the figures on cost of turnover in the Packard plant to seem to be exact.

But I do want to enforce this point. The Packard employment department is one of the oldest and best conducted in Detroit. It has already effected vast savings in cost of turnover and yet the head of the standards department, the man who, with his assistants, sets all standard working times in the plant, estimates that new and inexperienced workmen reduce the speed of production so much that a 25 per cent allowance of equipment, buildings, direct labor and supervision must be made.

Figure what it would mean to your company annually to add 25 per cent to your cost to break in new men. Do you know that it doesn't? We have no true figures for cost of turnover as yet. Until we get them we must rest our case upon such indirect evidences as Mr. Rheinfeldt's startling estimate.

We can also gather other evidences of the cost of breaking in new men by a study of plants which have kept a steady force, and by comparing production records per man at the beginning and at the end of the periods during which the reduction of labor turnover took place. This, however, is not a very reliable guide, because a good part of the increased production might have come from the introduction of more scientific methods. It is significant, however, that every plant in Detroit that has reduced its turnover of labor in the last year has increased output per man. In some cases it has doubled.

REDUCTION OF TURNOVER IS PRACTICABLE

It is not necessary, in fact, to prove that losing men costs money. There is a very general agreement upon that point and there is also a pretty general agreement upon the possibility of ascribing to success in creating a stable force some of the increase in production which appears concurrently. Employment managers, I take it, desire not so much to be persuaded that it is worth while to discover methods of reducing the needless exchange of employes as to have proof that they can keep men on the job by definite methods which have succeeded in other plants.

I have some very interesting figures on the reduction of turnover in Detroit plants during the last year, or thereabouts. Labor conditions during this time have been very disheartening, and, in all firms where employment departments have been established for a long time, the exchange of employes, in spite of intelligent work, has increased during the last year. This is a very interesting fact when taken in conjunction with another distinct and contrasting fact; namely, that in all plants that have installed employment departments within the last year or more, the turnover of labor has generally declined during this bad year.

Take the Saxon Motor Car Company, for instance. Its employment department has been in full running order only a little over a year and in the first year of its operation it has reduced labor turnover 140 per cent. This figure is obtained by subtracting the turnover figures at the end of the year from the turnover figures. at the beginning. The employment manager of this company predicts a 50 per cent further reduction during the coming year, which will be bringing it down pretty low.

Take, again, the Hayes Manufacturing Company, where the employment department was established in April, 1915. In the first year of operation turnover was cut practically in two. And then in the next four months, from April to August, the turnover was more than cut in two again and has been declining slightly ever since. This reduction was accompanied by a 30 per cent increase in output per man. Then there is the Timken-Detroit Axle Company where the labor department has been in operation for sixteen months and where foremen are given a bonus for what is known as "force maintenance efficiency." During these sixteen months, this efficiency has increased 20 per cent. I refrain from giving the figures upon which this percentage is based because the Timken Company does not desire to reveal the exact turnover data.

One of the most remarkable records I know of, with regard to reduction of turnover as the result of the installation of a complete labor department, is that of the Solvay Company of Detroit. The record is so good that I am going to take the risk of quoting the exact turnover figures. The Semet-Solvay (Coke) Company and the Solvay Process Company occupy adjoining factories on the same plot of land but maintain entirely separate managements. Up to the first of June, 1916, the Semet-Solvay Company had an employment department and the Solvay Process Company, on the other hand, permitted each foreman to hire his own men.

When it came to the attention of the management of the Solvay Process Company that they were having labor difficulties which did not appear in the Semet-Solvay, the employment manager in the Semet-Solvay was given entire charge of hiring and firing in both plants. The average turnover for the two plants during the month of May was 10 per cent. In the month of June, after the employment department had taken over the work of the Solvay Company also, the turnover of the two plants dropped to 8.3 per cent. July it was 8 per cent; in August, 4.1 per cent; in September, 3.3 per cent; in October, 3 per cent; in November, 2.6 per cent; in December, 2.4 per cent. This is the most remarkable record of employment department efficiency that I know of anywhere and when you take into consideration the fact that the average turnover of labor in Detroit was jumping up by leaps and bounds at the same time that the Solvay companies were greatly reducing their turnover, it appears even more surprising.

« ПретходнаНастави »