Talent Retention for OUS MedTech Operations with Graydon Hansen

Transcript:

Travis: 
Welcome back to Another Med Tech Snapshot, the podcast where we discuss all things MedTech. One question, one answer. It's a highly digest discussion. So join me today is COO Graydon Hansen.  

Graydon's going to share with us a variety of things as it relates to global operations. So I'm really looking forward to this discussion. Well, Graydon, let's dive right in. 

So, you know, our first question we're covering today is looking at OUS operations, of which you have plenty of experience on that end. So I'd be really curious, if you look at it from a talent perspective, how do you improve talent retention with OUS operations? 

So for those who are listening to us and are not familiar with what that term is, these are plants manufacturing operations that are outside of the United States. How do you improve talent retention for those types of facilities if you are located in the US? 

Graydon: 
You bet. Not easy, not simple—as most problems aren't. But I think the first rule to remember about talent retention is that well-led organizations experience low turnover—and I can't emphasize that enough. 

So the first rule is respond to data. If you're in a corporate or division headquarters and there's a particular site that has been experiencing high turnover—frankly, we've all been there. Everybody you run into on the hallway, etcetera, colleagues—they all have the answer. 

Well, there's no magic pill as I'm sure your viewers are aware. So you have to respond to data. One experience we had was we found that we were in hyperinflation environment. One of our OUS plants had 25% per year increase in labor rates. And the way that we were updating labor rates was we were benchmarking and it was at Chinese New Year that they would typically update wages across the industry within the entire country. 

This was a plant in China, very large American MedTech company. And what we found was when they benchmark, we would benchmark data from the prior year and then right after Chinese New Year update people's compensation based on that. 

Well, everybody else in the industry just got a 25% raise, so we were literally a year behind. Now, if you're in a two and a half 3% inflation rate environment, that's not going to be a problem. But a 25% per year inflation rate, we were always 25% behind we found. So we did a one-time adjustment, but that wasn't the magic pill. 

Again, there's no silver bullet per se, but we then dug deeper because we were still experiencing double digit turnover and Med tech. You just can't have that. The next thing we did was we really went to local consultants to understand what were best practices with global companies. 

So again, back to the question of how you do this, how do you do this from a distance? You have to really put yourself in the shoes of the people at the site. Don't think that headquarters solutions are going to solve the problem at a site because you have background culture, you have regional issues, you have local competition. I'm just losing people to Mary Kay Cosmetics, believe it or not, because we both had aseptic processes, but we turn that around.  

So the next thing we did was we really through using very competent consultants, we did best practices and benchmarks of multinational companies doing similar work in that region. And we found there were a number of different areas, but the number one area that really impacted turnover in a negative way is that people didn't see upward mobility potential. And when we learned that, we found that that tied into succession planning. 

We didn't really have good bench strengths, but really all of that weaving together, it took us two or three years to turn the corner, but we put in place success and planning, put in place development planning. So each person all the way to the level of operator understood what potential upward mobility they had. And within three years we lowered turnover from 70 plus percent down to less than 10%. Denmark in that area was 19%. So we really blew past the benchmark. And it's kind of a second rule of really anything. 

Once you update the DNA of the organization to make improvement, you just can't hold it back. You might have a particular target, but if you do things properly, you're going to blow past that. And that's like frankly, I stay in contact with the site director who's still a colleague, friend of mine and his turnover is even lower than when I left.  

So that was those are the things you have to follow, I think. But again, I'll reiterate at the end of this story, a well-led organization experience of low turnover. That's something we all have to remember.