Ohio Manufacturing Blog | MAGNET

Workforce Strategy for Manufacturers: From Cost Center to Growth Lever

Written by Mike O’Donnell | October 15, 2025 at 8:48 PM

Picture this: A supervisor sets production targets with a stopwatch, timing one operator and turning that number into the standard for everyone. That operator was having a good day. Maybe he'd been doing the job for years. But for decades, that arbitrary number becomes gospel.

Most manufacturers are stuck thinking about their workforce as a necessary cost. But there's an evolution of thinking that transforms companies from struggling with turnover to using their workforce as a competitive weapon. And to get there, you need a workforce strategy.

The Six Levels of Workforce Thinking: Which Level Are You?

Take this quick assessment to see where you stand:

Level 1: The Unconcerned

  • You focus entirely on equipment, processes, and production schedules
  • Workforce issues rarely come up in leadership meetings unless there's a crisis
  • You believe people problems will sort themselves out naturally

Level 2: The Cost Controller

  • You track labor costs, overtime, and headcount religiously
  • Your main workforce goal is keeping payroll within budget
  • When production falls short, your first instinct is to cut labor costs

Level 3: The Problem Spotter

  • You see quality issues and inefficiencies but can't pinpoint the cause
  • Your data systems show symptoms but not root problems
  • You suspect people issues are costing money, but you can't quantify it

Level 4: The Growth Seeker

  • You realize your people could help you grow, not just control costs
  • You question old standards and wonder if your workers could do more
  • You start thinking about workforce as a tool to increase capacity

Level 5: The Culture Observer

  • You notice that how people interact affects overall performance
  • You see that team dynamics either reinforce or undermine your goals
  • You're aware workplace culture matters, but unsure how to influence it

Level 6: The Culture Architect

  • You actively work to shape how people interact and perform
  • You make deliberate choices about policies and leadership that affect culture
  • You create a workforce strategy to guide you in creating an environment where people are engaged and help the business succeed

What Workforce Strategy Actually Means

A workforce strategy is not "We need people, so we'll hire more." That's staffing. That's reactive.

A real workforce strategy is alignment between you and your executive team to attract, retain, develop, and succession-plan for a sustainable business model. It needs to be written, updated regularly, and tied to key metrics.

Ask yourself these questions—and think about how your employees might answer differently than you:

  • Do you consider your employees as a cost or a value generator?
  • Do your employees understand your personal mission for the company?
  • When your workers see a problem, are they comfortable telling their manager, or are they afraid?

These questions give you an idea about how engaged your workforce is. If you're cringing, you're not alone. But you're also not powerless.

How Lack of Engagement Kills Your Margins

Here's what should make you seriously consider a workforce strategy to improve engagement: According to Gallup, engaged teams see 63% fewer safety incidents, 23% higher profitability, and 32% fewer quality defects. Take a look at your numbers for those metrics to see the difference an engaged workforce could make.

Low engagement leads to turnover. Replacing a skilled production worker costs about 33% of their annual salary. For a $50,000 operator, that's $16,500 gone every time someone walks out. Even worse, one-third of new manufacturing hires quit within 30 days.

Every departure creates a vicious cycle: you lose people, which burns out your remaining staff, which causes more people to leave. When you lose people, everyone who stays thinks, "Management promised to hire enough people, but everyone leaves. I'm leaving too."

Your financials track wages and overtime. They don't track the operator who's mentally checked out and produces substandard parts. They don't measure the culture that makes workers afraid to report problems. They don't quantify the supervisor promoted for technical skill, not leadership ability, who's now driving people away.

In an employee's first 90 days, they're operating at maybe 70% efficiency. You lose money every time you hire someone new. But if you retain, develop, and engage them? That same person becomes a profit center.

The Shift That Changes Everything

Stop asking "How do I cut labor costs?" Start asking "What changes do I need to make to unlock more value from my workforce?"

Remember that stopwatch example? Here’s how it works differently with an engaged workforce. When manufacturers involve workers in improving workflows, something magical happens. Workers consistently beat the old standard. Nothing changed in equipment—only mindset. When you realize you can use your people to help you grow, you can make more stuff, decrease costs, and turn your workforce into a growth weapon.

Your Workforce Strategy Framework

Think of your workforce strategy like building a house: without a solid foundation and strong pillars, the roof of leadership and change management won’t hold.

To build your house on a good foundation, you need systematic thinking about these three areas:

  • Analysis: You can't guess about root causes. You need data and gap assessments to understand what's really happening.
  • Attraction Strategy: If the people you bring in aren't good—that's an attraction issue.
  • Retention Strategy: If people are good but you can't keep them—focus on why they stay, not why they leave.

Track metrics for each workforce stage:

  • Attraction: Percent of new employees needed, temp vs. direct ratios
  • Retention: 90-day retention rates, turnover reasons, stay interview results
  • Development: Training hours, promotion rates, formal feedback percentages
  • Succession: Percentage of roles with succession plans

These aren't HR metrics—they're business metrics. And they belong in a written workforce strategy.

The Change Management Reality

With your leadership group, you need to decide what to change and how. Then decide who will be responsible. This will create work for the person who leads the change; it’s inevitable. But someone needs to have this as a SMART goal, which also means deciding when the work will begin and end. The point is to have a complete plan to make this change management project a reality.

You might need a gap assessment from an unbiased person to help figure out what to tackle first. They’ll see things you don’t notice. If your employees look like meerkats popping up when the president comes out, you’re probably used to it and don’t recognize that as a culture issue. Get the pulse of your organization—it's like an annual physical.

Hard news hits hard, but be willing to listen.

As you go through change management projects one by one, you’ll create a new company culture. Culture is "how we do things here." It matters when one group likes metal music and another prefers classical—how they negotiate that playlist tells you everything about your culture.

What Happens with Change Management and an Engaged Workforce

G+D Manufacturing came to MAGNET with low retention and high turnover. In 8 months, we cut employee training from 40 days to 21. That's 19 more productive days per hire. With 15 new hires annually, that's 285 days of output gained—a six-figure swing.

"Saving those 19 days has been financially huge because now I have educated operators who sustain rate, and we make money quicker," said their Continuous Improvement Manager.

How? Not HR heroics. Operational clarity, leadership accountability, and better communication.

The Bottom Line

Your workforce is either your biggest cost center or your greatest competitive advantage. Companies that treat workforce as a strategic lever outperform those that treat people as expenses.

The question isn't whether you can afford to invest in workforce strategy. The question is whether you can afford not to.

Ready to Stop the Bleeding?

Our Workforce Engagement and Productivity Assessment analyzes your data and shows you how much turnover costs, why people really leave, and what to fix in 90 days—prioritized by ROI.

For $500, get an action plan designed for your exact situation. Every day you wait is another day your best people carry extra weight—or leave entirely.

Book Your $500 Workforce Assessment Today

Let's stop treating your people like a cost and start treating them like the competitive advantage they are.