The Best Practices Guide: Riding Out the Storm(s)
How A.Y. McDonald weathers the ups and downs of the housing market
How does a manufacturing company in the often-volatile housing industry manage staffing needs? Work closely with the union and offer too-good-to-refuse benefits, according to Mike McDonald. McDonald is president and CEO of A.Y. McDonald, a fifth-generation manufacturer of valves, pumps and products for water works.
During the current economic slowdown, A.Y. McDonald worked with its union to avoid layoffs—using instead voluntary leaves of absence and shorter workweeks. Still, explains McDonald, through retirements and other attrition, "we're down about 50 people on the floor."
"We're an old-line manufacturing business," McDonald explains. "It's difficult to get someone to stand in front of a machine these days. People also aren't as interested in starting a second- or third-shift job."
When the housing market picks back up again, the company will use its benefits to attract new employees. "When business comes back, we'll ramp up production. To do that, we have to offer benefits," McDonald emphasizes.
A.Y. McDonald's benefits help them retain—as well as attract—employees. "The fact that we offer very competitive benefits keeps our turnover rate extremely low. When people come to work for us, they usually don't leave. We've had several 30-year retirees in the last 18 months. When you have people stay that long, it makes a big difference," says McDonald.
Their customers notice the difference, too. "When our customers visit the factory, they're amazed at what an advantage we have because of the longevity of our employees. The experience factor is critical in making the products we manufacture. Benefits play a key role in keeping employees around." And it works. A.Y. McDonald's voluntary turnover rate is only 2.6 percent compared to a national average of 15.6 percent for the manufacturing industry.
"The fact that we offer very competitive benefits keeps our turnover rate extremely low."
– Mike McDonald, president and CEO, A.Y. McDonald Manufacturing Company
What can you learn from A.Y. McDonald?
- Benefits can help with staffing challenges in good times and bad.
- Working closely with union management can help avoid layoffs.
- Low turnover leads to a more experienced employee base—something customers notice.
About A.Y. McDonald Manufacturing Company
Find out more about their benefits in A.Y. McDonald Manufacturing Company's winner profile.
