Henry Ford’s new assembly line process, while very efficient for its day, was just too much for many of his new workforce. While his workers were much less skilled than their craftsman predecessors, they did still require some level of training and a breaking-in process. If after only a few days on the line the worker quit and walked off the job, this might cause the line to stop and production to come to a halt.
It was once said that Henry Ford had to seek out, hire, and train 10 workers to get just 1 quality worker. Turnover in the industry was off the charts, which was very costly to Ford. At the time the average wage of an assembly worker was $2.34 per day. After computing the real cost of his high turnover, Henry Ford made the decision to raise the average wage to the unprecedented rate of $5.00 per day.
His competitors, upon hearing about the increase in workers’ pay, called Henry a fool and said the move would ruin Ford. Not only did turnover nearly stop, but the best workers from his competitors came knocking at Ford’s door looking for work. The exodus of his competitors’ best and brightest workers left the competition with a lower quality workforce, making the turnover problem even worse for them.
Furthermore, the news of higher wages created a PR sensation, which got Ford a huge amount of positive press from nearly every news agency of the day. Sometimes what may look like a silly solution to a problem may, in fact, have huge payoff potential for you in the end if looked upon from all perspectives.
What can you learn from Henry Ford’s unprecedented action to buck the tide?
