Milwaukee-area manufacturer introduces $15,000 retention bonus to combat turnover

After sustaining substantial turnover among production employees, pet food maker Stella & Chewy’s revamped its strategy for retaining them: A $15,000 bonus if the company cuts in half its voluntary turnover the next three years.

“We thought that would really get people’s attention,” said the Oak Creek company’s chief people officer Bruce Larson.

The initiative at the privately-held firm takes a different approach than hiring and retention bonuses many manufacturers implemented in recent years. Those bonuses typically pay new employees a bonus shortly after joining a company and then additional bonuses if they stay for multiple months or a year.

Stella & Chewy’s tried the popular signing bonuses in the past, but they only brought new employees in the door and didn’t decrease turnover, Larson said. The company continues to grow its sales, but high churn among production workers led to relying heavily on temporary workers, he said.

The company sustained 62% turnover in its production-employee ranks in 2022, which Larson said isn’t unusual in the food industry. Stella & Chewy’s use of temporary workers peaked at 39% of production hours, he said.

Larson, who started with the company in November 2021, acknowledges that three years is a long time for employees to await a retention bonus. However, he said the program has been well received.

Turnover is down to 37% so far this year after introducing the “Stay” plan in April that includes the retention bonuses, Larson said. Also, the company reduced temp-worker hours to about 10% of the total, which he said is a good level.

The 500 production workers at Stella & Chewy’s are paid in a range of about $17.50 to $24 per hour depending on the position, work shift and length of service, Larson said.

The first cohort of employees eligible for retention bonuses is comprised of production workers and their leaders who were hired on or before March 31, a company spokeswoman said. The company also authorized a second cohort consisting of production workers and leaders hired between April 1, 2023 and March 31, 2024.

Stella & Chewy’s executives believe the company’s management and employees both need to strive to improve the work environment to achieve the goal.

The idea is to create a workplace culture where employees don’t want to leave, chief operating officer Dave Kapic said in a video on the company’s website.

The company’s management is encouraging existing employees to be more welcoming to new hires, Larson said.

“We’re asking employees to work on a successful culture in their department,” he said.

The bonuses are part of a larger program that includes Stella & Chewy’s introducing updated on-boarding practices for new employees, an improved paid time off policy and extending parental leave beyond mothers to also include fathers, Larson said.

As for how Stella & Chewy’s will pay for the bonuses, Larson said the program will prove to be self-funding if the company attains the retention goal. That’s because Stella & Chewy’s will increase productivity while reducing expenses for both paying temp staff and constantly recruiting and training employees.

Larson said he presented the concept to the company’s top executives and board and won their support.

“We’re hoping to attract better and better people to openings to work here,” Larson said.

Rich Kirchen, Milwaukee Business Journal

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