Turnover Costs are Bad for Business, Especially Small CNC Machine Shops

g3 cnc
Sep 2
4 min read

Updated: Sep 5

In the world of CNC machining, every part counts. But when a skilled Operator or Machinist walks out the door, the ripple effect can be devastating—especially for small shops. Unlike large manufacturers with deep benches, small businesses often rely heavily on a core team of experienced operators. Losing even one can set back productivity by months or even years.

Unlike other small businesses like retail that don't rely on skilled labor, Machine Shops in particular are susceptible to damage from employee turnover.

The True Cost of Losing a Skilled Worker

Employee turnover isn't just an HR issue—it's a financial one. Replacing a skilled worker can cost anywhere from 50% to 200% of their annual salary. For technical positions like CNC Operators & CNC Machinists, the costs can be even higher due to years of specialized training that's required.

But the financial impact doesn't stop there. High turnover leads to:

The True Cost of Losing a Skilled Worker | g3cnc.net

Lost Productivity: New hires take time to reach the proficiency of seasoned employees, often taking a year or more leading to a 30% dip in productivity during long transitions.
Knowledge Gaps: Experienced Operators & Machinists carry invaluable institutional knowledge. When they leave, that expertise goes with them, creating gaps that can take months or years to fill.
Increased Workload on Remaining Staff: The departure of a team member often means others have to pick up the slack, leading to burnout and potential further turnover.
Customer Impact: Delays in production and quality issues can strain customer relationships, potentially leading to lost business.

Why Machine Shops Feel the Pinch

Machine shops are by and large small businesses with small teams. In fact, according to census.gov, 98.6% of manufacturers in the US are small businesses. In these small shops, each Machinist is often responsible for multiple tasks, from programming to setup to quality control. Losing one person can disrupt the entire workflow, leading to:

Extended Lead Times: Without a full team, projects take longer to complete, affecting delivery schedules.
Quality Control Issues: Less experienced staff may overlook details, leading to defects that require rework.
Financial Strain: The costs associated with turnover can strain the financial resources of a small business, affecting profitability.

Strategies to Mitigate Turnover

While some turnover is inevitable, there are steps small shops can take to reduce its impact:

Invest in Employee Development: Offering training and growth opportunities can increase job satisfaction and loyalty.
Foster a Positive Work Culture: A supportive and respectful environment can make employees feel valued and less likely to leave.
Offer Competitive Compensation: While small shops may not match large corporations' salaries, offering fair wages and benefits can help retain talent.
Recognize and Reward Employees: Regular acknowledgment of hard work can boost morale and reduce turnover.

Conclusion

In the CNC machining industry, skilled workers are the backbone of small businesses. Losing one can have far-reaching consequences. By understanding the true costs of turnover and implementing strategies to retain talent, small shops can maintain productivity, quality, and profitability.

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About G3CNC

G3CNC is uniquely impacting the training space for CNC machining to attract more talent into the industry and drive rapid results with educational resources focused on improving employee work ethic and productivity. Unlike traditional training G3 focuses on the "whole person" with job specific skill sets in addition to qualities like work ethic, communication, professionalism & leadership. Using advanced learning methods including online modules & artificial intelligence, we specializes in "capturing" employees into the CNC machining industry, and dramatically boosting employee performance, productivity & employee retention.