Building yachts is a complex process, isn’t it? Turning steel plates, engines and rudders into a luxury vessel takes a lot of very intricate, highly aligned processes and the right mix of specialised skills, abilities and personalities. With an estimated 600,000 people employed in the industry in EU-14 alone, you might assume that getting your hands on talented naval architects, marine engineers or project managers is easy. But you will be totally wrong! The skills shortage in the industry is real and holding on to your good people is absolutely critical.
According to Forbes, a 5% increase in staff retention can lead to a 25%+ rise in profits. The statistics might be even more striking in shipbuilding where specialized skills and expertise are paramount. So, let’s look at how the smart guys at Forbes arrived at this number.
The Crippling Costs of Replacing an Employee
Replacing an employee costs money. Employee Benefits calculated that the direct cost of replacement are north of a third of the employee’s annual package. When you add to that the (not so hidden) indirect costs, you could be forking out two or three times the annual salary. So, the cost of replacing a senior PM with a gross annual package of €80K can easily climb to €200K+. Considering that the industry retention standards hover around the 70% -80%, i.e. you will need to replace one in five employees every 2-3 years, these costs can stack up rather quickly.
The Sneaky Indirect Costs
The recruitment process alone can take 8 to 12 weeks (if you are lucky), which is a period of, at best, slow project progress (and at worst – a complete stall) and added pressure on the rest of the team (that can often lead to more resignations). That is over and above the cost of lost ‘tribal knowledge’ (i.e. the specific on-the-job info and expertise vested with the exiting employee) that the Forbes experts calculated amounts to 42% of the expertise required to capably perform in the role.
Then there is the impact on team dynamics, staff morale, employer reputation (that’s right – many of the talent in our industry do know each other and talk!), delivery delays and ultimately, client relationships.
Getting it right
Numbers aside, the moral of the story is: staff attrition is bad for business. Especially in yacht building, where the loss of even just one key cadre at the wrong time can completely derail a project. So, what is it that the ‘sticky shipyards’ (i.e., those that talent just sticks with and doesn’t want to leave – think Oceanco, Royal Huisman or Abeking & Rasmussen) do to get it right?
It starts with the hiring process.
Yacht building is a team sport. It often takes 20 or more engineers and artisans working together with an absolute precision and coordination to put together a vessel. And team dynamics is a critical piece of the puzzle. Yes, of course, you need the specialised expertise for the size and type of vessel you are building. Delivering a 50m project is very different to a 100m one. You also need them to fit within the project budget, be in the right country (or willing and able to relocate) and fit with the project schedule. But having a marine engineer and a naval architect (both with the right background and experience) who don’t ‘gel’ will almost certainly cause you sleepless nights mid-build. I can guarantee you that!
Matching candidates to the culture and environment of the shipyard doesn’t have to be a hit or miss exercise. There is a process for that! (Here I would tell you that there is a special tool you can use called ProTalent and available on the Proteus Professionals website, but I don’t want to sound like an over eager salesman!) Using McQuaig Word Survey® or similar personality analytics tools (for both the candidate and the shipyard) can alert you of potential team challenges down the line way before you fork out the money for a bad hire. Sounds like a lot of work, I know. But don’t worry! You don’t have to get bogged down into it. That’s what we, the recruiters, are here for! (I promise you, we don’t just charge fees for nothing!)
So, hiring right is step one. I am sure you knew that already. Then comes the hard work – becoming a sticky employer. This is what I do for a living. Consulting and working with shipyards to get them to the point where they are as attractive to precious, rare talent as honey to bees; where their staff ‘sticks’ and thrives and no matter how much more money competitors offer them, they won’t leave in a hurry.
Do you want to become a sticky shipyard and attract (and keep!) the crème of the crop talent in the industry? Just pick up the phone.
