We have a lot to cover on this topic, so posts will continue daily throughout the week...
So the new higher pay rates were a huge a success, the next few weeks were chaotic with training, but the plant was back at full production. There was a lot of backslapping and hand shaking as the executives were very happy. This higher cost of labor was fairly easy to absorb in the cost of the product, (when a production line sits idle because of lack of labor, as we all know, it's not good for anyone) and more importantly they were able to meet customer demand.
All was well for a few months. Jorge and his European superiors were pleased with the results. Although initially not pleased with the pay raises, the cost of turnover, the training costs, the lost production time that were eliminated with the new pay program, more than made up for the additional cost. They had invested millions upon millions in this strategic facility, and having expensive manufacturing equipment and real estate sitting idle was unthinkable.
A lot of the other maquiladora's followed suit, as competitors often do, raising pay and having different levels of success, but success, nonetheless. Although not competitors in the conventional sense of the word, the maquiladoras were competing for labor, which is a whole different ballgame. And a dicey ballgame at that. It does not follow conventional wisdom, it is not an issue you can throw money at, as it requires a new approach.
Then - slowly but surely and almost predictably, the new employees started to leave one by one over the next six months... Where and Why? I think you will be surprised.
Next week you’ll find out.