In this episode of Trending: Pet Food, Lindsay Beaton speaks with strategic advisor and fractional Chief Human Resources Officer Dr. Frank Niles about the employee turnover crisis facing pet food manufacturers. With turnover in the sector running around 40% — well above the broader manufacturing average — Dr. Niles examines the true cost of replacing frontline workers and the most common drivers of attrition. He explains why supervisory quality is the single biggest factor in employee retention and makes the case for treating frontline leadership as a profession, not simply a promotion. Dr. Niles also outlines the three core psychological needs — autonomy, competence and connectedness — that employers must address to build a workforce that stays.
Lindsay Beaton: Hello, and welcome to Trending: Pet Food, the industry podcast where we cover all the latest hot topics and trends in pet food. I'm your host and editor of Petfood Industry magazine, Lindsay Beaton, and I'm here today with Dr. Frank Niles, strategic advisor and fractional CHRO. Hi, Frank, and welcome!
Dr. Frank Niles: I'm so glad to be here with you.
Beaton: In case you're unfamiliar with Dr. Niles, here's what you need to know. He advises Fortune 100 companies, high-growth startups, leading pet food brands and manufacturers, and professional service firms on building high-performing teams and thriving cultures. He holds a Ph.D. in political psychology from the University of Houston and is frequently quoted or featured in the media, having appeared on CNN, NBC, Inc. and Fast Company.
He is a past contributor to The Huffington Post and Thrive Global. An accomplished rock climber, he has ascended some of the world's most extreme routes and developed climbs in North America. The focus, resilience, and drive he honed on the mountain now shape how he works with leaders today. Dr. Niles applies this same perspective to the pet industry, helping leaders navigate complex challenges with clarity, resilience, and purpose.
His extensive business experience and leadership make him the perfect person to answer this question: How can we reduce employee turnover in the pet food industry?
I want to start with a high-level question about what the turnover rates look like for the pet food industry. What do they look like for manufacturers in particular, and how do they compare to other manufacturing industries?
Dr. Niles: That's a great question. There's not a ton of industry-specific data, but a study recently reported in Petfood Industry magazine shows that in the pet food manufacturing space, turnover is around 40%. That's actually slightly above other manufacturing — particularly food manufacturing — which hovers between 24% and 32% annually. Listeners need to remember that manufacturing is a tough environment. You have multiple shifts, and the work is taxing physically, as well as demanding in terms of time and emotional energy. Manufacturing turnover tends to be quite a bit higher than corporate, office-based employment.
What's important about that 40% statistic is that it's incredibly expensive to replace one of these frontline workers. Even though frontline workers are typically not paid at the same level as salaried employees, it still costs about $36,000 on average to replace a food production factory worker, assuming a starting wage of $23 an hour. That figure accounts for lost production and the overtime paid to other employees who backfill while you're searching for a replacement. There are other costs as well, but just from a monetary perspective, that's quite significant.
Beaton: Is the cost of replacing workers actually front of mind for companies, or do they continue to overlook it even though it's the first thing mentioned every time turnover comes up?
Dr. Niles: Some are more aware of it than others, but many companies treat it as a cost of doing business — which is unfortunate, not just from a human perspective, but from a competitive advantage standpoint. Our human talent becomes the differentiator of an organization, even an automated one. When you're replacing people constantly, you lose institutional knowledge, expertise, and the relationships that serve as the glue holding teams together. Hemorrhaging people is demoralizing to the overall team.
Reducing turnover is one of the most frequent requests I receive. I do a lot of work in the veterinary space, and vet practices and hospitals have a significant turnover problem on the front line with customer service representatives. Reducing turnover is one of the most top-of-mind challenges in the industry right now. With smaller and midsize companies in that 30, 50 or 100 headcount range, they generally don't have a lot of HR resources focused on this issue, so they typically reach out to me once turnover starts creeping up. My advice is always to get ahead of the problem, not behind it.
Beaton: What are the top reasons for turnover in manufacturing versus non-manufacturing roles? I have a feeling physical factors dominate in manufacturing and culture factors in non-manufacturing, but do they overlap?
Dr. Niles: Pay matters. You've got to be paying at or above industry standards. I had a client a number of years ago that was experiencing a tremendous amount of turnover. We came in and did a comprehensive analysis of their compensation structure, among other things. Like many manufacturing facilities, they were located in a rural area, and when an organization like Walmart invests in wages — bringing associates to $20 or $21 an hour — it's hard for a family-owned manufacturing facility to compete. We did see floor employees at this client move to employers paying slightly more.
But let's assume you do invest and pay a fair wage above industry average. The evidence is overwhelming: employees don't leave jobs and companies — they leave supervisors. Gallup poll data shows that direct supervisors account for about 70% of the variance between employees who are highly engaged and those who are not. Engagement is a strong predictor of retention, so that 70% figure is significant.
Beaton: You mentioned manufacturing facilities being in rural areas. Many manufacturing leaders I've spoken with say they're willing to pay and put in the effort, but convincing people to move to a rural area is the real challenge. They're not just competing for their company — they're competing for the town itself. What have you seen that works?
Dr. Niles: Reducing turnover is multifactorial, and you're right — convincing someone to relocate to a rural area is hard. Based on my work with clients in this situation, it's really about tapping into the local workforce through job fairs, outreach to high schools and technical colleges, and becoming the employer of choice. Why would someone choose a manufacturing facility over, say, a fast-food job? You need to provide compelling reasons — opportunities for advancement, the ability to suggest process improvements, and treating frontline employees as professionals, not simply as people ensuring line flow and uptime.
I think of what Walmart did. It's increasingly a tech-enabled company, which means competing for talent with companies like Google and Microsoft. Getting a graduate from MIT or Stanford to move to Bentonville, Ark., is difficult. What changed things was not only investment by the company itself but investment in the broader community — through the Northwest Arkansas Council, economic incentives for organizations to move to the region, and cultural development. Leaders of manufacturing organizations need to be involved in civic groups, local government, and close to policymakers, because that commercial and cultural environment directly affects their workforce.
Beaton: How do you convince employers to invest in the long game, especially legacy companies that have been around a long time?
Dr. Niles: We break it down to actual dollars and cents as best we can. Rather than talking about "the long game," I talk about keeping the lights on — being efficient and safe, and achieving production deadlines. There are many co-manufacturers out there who lag in production in part because they don't have the talent to run or fix their lines, and that becomes a cascading problem.
By investing in supporting the people doing the work — and it doesn't have to be a large investment — you create a ripple effect throughout the entire organization. Employees begin to feel ownership over the process. They work more collaboratively with peers and supervisors. When the workforce moves in that direction, there becomes a lot more stickiness. They want to stay because they're contributing to something bigger than themselves.
I travel frequently, and I'll often ask floor staff at hotels what they love about their jobs — not just at high-end properties, but at midscale ones, too. Almost universally, they talk about culture, flexibility, a sense of ownership over their space, and opportunities for advancement. Money is important, but how you treat the employees closest to the customer and the product is ultimately what drives retention. I try to bring the conversation back to how that investment impacts both the bottom line and the top line.
Beaton: It sounds like you're talking about the human need for purpose. If you're the type of employer who gives employees ownership over their work and opportunities for growth, that goes a long way, but it can be a harder sell than a straightforward monetary argument. How do you convey that in a business context?
Dr. Niles: That's where my psychological training comes in. I can speak to the P&L and put the cost of losing employees in black and white. But I like to flip the conversation: What are some things we can do to keep them?
Going back to that manufacturing client — we did a comprehensive survey of both employees and leaders, held one-on-ones with each member of the C-suite, and conducted focus groups with floor workers. What was consistently mentioned was poor supervisory leadership. This is not surprising. There's a phenomenon I call the "accidental manager" — subject matter experts who are great at their jobs and get promoted, but without any training on how to manage effectively. They're suddenly in a leadership role, often one they didn't even want, and they have no framework for giving feedback, coaching or setting goals. Many do it because the pay is better, but they're unprepared.
What we implemented was a light-touch, asynchronous leadership development training program — both in-person and self-paced — for all current managers, and going forward for all new managers. These aren't overnight solutions, but they substantially reduced turnover at that facility. The data is unequivocal: better managers keep people.
Better managers are more skilled at having career conversations with employees and putting that human touch on the work relationship. No one wants to feel like an extension of a machine.
I'll add this: in nearly every talk I give, I come back to the fact that humans are motivated by three things. Psychologists call these psychological nutrients — things you need to take in daily, not just once. The first is autonomy: making self-initiated decisions. That looks different whether you're in an office or running a production line, but the need is the same.
Here's an example from my time at Walmart. An associate sitting in the break room noticed that the lights inside the vending machines were on during daytime hours when the room lights were also on. He flagged it to management, it worked its way up through regional and market leadership to the home office in Bentonville, and they initiated a change across all stores — vending machine lights became light-sensitive, turning off during the day. Imagine the cost savings at scale. That associate's idea made a lasting impact, and he knew it. Opening up opportunities for process improvement — contributing in ways that go beyond the core job — is a powerful way to satisfy the need for self-initiated decision-making.
The second psychological nutrient is competence: the experience of getting better at something meaningful. Think about learning an instrument or a sport — the progress is intoxicating. As employers and leaders, we need to create conditions where employees experience increasingly greater levels of ability in what they do. If there's no progression, performance actually declines. There's no generic solution; that's why we go into the actual work environment and design pathways for skill development specific to that organization.
The third is connectedness: giving and receiving support. I've been in a lot of manufacturing facilities where the team-building activity is something like hot dogs on a Friday — which is great, but it's still top-down. Beyond that, are there opportunities for your frontline employees to give back in some way? I'm on the board of a women's empowerment nonprofit, and organizations bring their least-compensated employees into the space to serve and engage. When people experience the ability to give back — even from a challenging situation — it taps into something deeply human.
Autonomy, competence and connectedness: everything I do emanates from those three core human needs. You can engineer the best process in the world, but if it doesn't align with what we need as human beings, it will fail.
Beaton: Do you think this is a new phenomenon, or are we just starting to care about it? These conversations weren't happening 50 years ago.
Dr. Niles: They were not, and in part it's driven by an increasingly VUCA world. VUCA stands for volatile, uncertain, complex and ambiguous — a framework that emerged from Cold War-era military lessons. Western aviators were given rules of engagement but also the autonomy to make distributed decisions in the field. On the other side, decisions had to travel up the chain of command. Western forces had the advantage.
As the world becomes increasingly volatile, uncertain, complex and ambiguous, command-and-control leadership has very limited utility. What we need is to empower those closest to the customer or the product line to make self-initiated decisions without having to seek approval for every action. Clear SOPs that define what employees are authorized to do — without calling back to headquarters — matter enormously.
Fifty years ago, it was, "Come in and do what I tell you." Now it's, "Here are our objectives and our KPIs. I don't know everything about the job you do, so I'm open to suggestions. Let's figure out how to get there together." Decentralized control mechanisms produce better outcomes. That doesn't mean there's no accountability — in fact, when you give people autonomy and the chance to develop competence, they hold themselves accountable, because now it's their work. It's not something being imposed from above.
That dynamic can be difficult for newly promoted leaders in particular. One of the things I tell them, borrowing from well-known management expert Marshall Goldsmith: don't add too much value too early. Don't go in and start fixing things before you understand what's actually wrong or where everyone stands. Walk the floor. Get to know your people. Know what makes them tick, because every person is different. You don't manage by a book — you manage by relationships.
Beaton: As we wrap up, what does the ideal future of the industry look like when it comes to employee retention, and what's the number one thing leadership can do right now?
Dr. Niles: The research answer is often met with resistance — "We don't have time for that" or "We don't have the budget." But when you weigh the cost of investing in frontline supervisory training against the cost of replacing workers, the math is clear.
My ideal future is one where frontline supervision is treated as a profession, not just a promotion reward or a path to higher pay. Being a people leader is its own job. Leadership development needs to become part of the operating model, because supervisors — just like their employees — have human needs for autonomy, competence and connectedness. When supervisors aren't equipped to lead well, it doesn't just hurt the business; it hurts them. Many don't want to be in the role because they feel stuck between management and their team.
Investing in supervisors doesn't require a huge outlay. Simple, targeted training on how to give feedback, build a team and support employees can go a long way. The evidence from retail bears this out. Think about Trader Joe's — the energy is palpable from the moment you walk in, and it's a direct reflection of how they train their managers and approach onboarding.
The manufacturing environment may not replicate that exact dynamic, but the principle holds: supervisors are the ideal conduit for connecting employees' day-to-day work to the larger purpose of the organization — more so than an annual address from senior leadership. Retention is built where the work happens. How supervisors show up, treat their people and support their people — that's my vision for the future.
This isn't soft or abstract. The research is unequivocal. Treat your people well and they stay. When they stay, you reduce overhead, become more efficient and more successful, and you become a talent magnet.
Beaton: Thank you so much for coming on today, Frank. This has been a conversation that I think a lot of people in the industry have needed to have. It's an important transition to make if we want talent to keep coming into the industry.
Dr. Niles: These are business leadership fundamentals that apply whether you're in manufacturing, large-box pet retail or a small independent shop. They're rooted in human psychology, and we're only now recognizing that this is simply a better way to organize how we work, and that's the future of work.
Beaton: Before we go, where can people find you?
Dr. Niles: You can find me on LinkedIn at Dr. Frank Niles, and at my website, frankniles.com.
Beaton: That's it for this episode of Trending: Pet Food. You can find us on petfoodindustry.com, SoundCloud or your favorite podcast platform. If you want to chat or have any feedback, feel free to drop me an email at [email protected]. I'm Lindsay Beaton, your host and editor of Petfood Industry magazine. We'll talk to you next time.
