Columbus Custom Carpentry: Fixing Turnover and Pay Issues

Culture and Organizational Structure as Drivers of Turnover

Culture and organizational structure may be playing a significant role in the turnover problem at Columbus Custom Carpentry (CCC). Although a culture problem is not explicitly stated by any of the stakeholders in the CCC case study, many of the problems described can be traced back to the company's lack of a strong organizational culture.

Organizational culture refers to the shared values, beliefs, attitudes, and practices of an organization. The company's culture may be contributing to the turnover problem if it does not align with employees' expectations or if it is not conducive to employee satisfaction and engagement. For example, if the company culture does not prioritize work-life balance or does not recognize employees' contributions and achievements, employees may feel undervalued and be more likely to leave. This is certainly the case with those in the crating department, as well as those on the production line who have left or been tempted to leave because they feel their craftsmanship skills have been replaced by a jig that requires only low-skilled workers. The very fact that culture is not on anyone's lips could suggest that it is a significant problem — it is when no one is speaking about an issue that the biggest problems tend to go unnoticed or unaddressed.

Organizational structure also plays a critical role in shaping employee behavior and attitudes. The company's structure may be contributing to the turnover problem if it does not provide clear communication channels, opportunities for career growth, or a sense of autonomy and control over work. If employees feel that they do not have a clear understanding of their job responsibilities, or if they are micromanaged, they may become disengaged and seek other opportunities. At CCC, the only workers who feel somewhat autonomous are those operating the forklifts — and this is only because their supervisor is too busy with orders to stand over them the way supervisors in all the other departments do.

Compensation is also a significant issue, particularly for craters. They perform one of the most physically demanding jobs at the company, yet they are paid among the lowest wages. Not surprisingly, this is also where turnover is highest. Newer employees do not want to remain long in such difficult work for such low pay, which is why they try to move to other positions as quickly as possible. Low pay contributes to low morale and a lack of motivation, as workers may not feel valued or appreciated. This can lead to decreased productivity and quality of work, ultimately impacting the company's bottom line.

Another contributing factor to high turnover is the stress that management experiences across most departments. The managers in the case study all express a sense of feeling overwhelmed by problems outside their control. They face tremendous pressure stemming from the company's competing constraints: CCC wants to keep costs low while also meeting customer demand for unique products that big-box stores cannot provide. They are pulled in two directions simultaneously, and there is little consistency or coordination among the various departments. Bottlenecks occur, products are damaged, and sales suffer — affecting everyone. This stress may also stem from high workloads, tight deadlines, and pressure from senior leadership to meet targets that lack clearly defined pathways. That pressure trickles down to workers, creating a tense environment that can lead to burnout and dissatisfaction.

When management is stressed, they may not be able to provide adequate support or guidance to their team members, which leads to confusion and frustration. This can ultimately cause a breakdown in communication and a loss of trust between management and employees — both of which contribute to high turnover. Turnover tends to result from many factors combining into an overall sense of job dissatisfaction. When workers are not satisfied, they leave. Those in crating, for instance, may appreciate the predictable 9-to-5 shift, but they do not accept the low pay or the mounting pressure.

Compensation Misalignment Across Departments

It was once the case that assembly technicians were paid fairly based on their skill level and experience. They required specialized knowledge and training to assemble products efficiently, and their work involved a significant degree of physical labor. However, the introduction of the jig has made the job easier, allowing low-skilled individuals to perform the work without any background in the craft. That is part of why some craftsmen are leaving. If the production line is to be staffed by low-skilled workers, then pay should reflect that reality. From a fiscal perspective, it does not make sense to pay low-skilled workers a craftsman's wage. When the job genuinely required craft expertise, higher compensation was justified. Craftsmen expect to be compensated at a level commensurate with their skills.

At the same time, an argument could be made that employment at CCC offers craftsmen a degree of job security they might not find elsewhere, given that independent carpentry work depends heavily on a strong housing market. CCC could argue that this stability constitutes a benefit that partially offsets lower wages. Nevertheless, there is no compelling justification for continuing to pay a premium wage for work that now requires only minimal skill, thanks to the jig.

On the other hand, craters appear to be underpaid given the physical demands of their work and the fact that they earn only slightly above minimum wage. They also face injury risk, since lifting and moving heavy products can be dangerous. They have no jig to support them at present. There is discussion of one being developed, but it is unclear when it will be completed and implemented. Furthermore, it remains to be seen whether the elimination of custom hand-work by a future jig system would result in reduced pay — and arguably it should, since a jig-assisted job requiring less skill should be compensated accordingly, just as with the assembly technicians.

The warehouse workers operating forklifts are paid decently because their role requires skill and certified training. Yet craters currently require comparable skill and physical effort and are not compensated accordingly. It is as though craters are being paid as if they were already using a jig, while assembly technicians — who are using a jig — are still being paid as if they were skilled craftsmen. The situation is clearly misaligned.

It is worth noting that fair pay is a complex issue that depends on many factors, including the local labor market, the company's financial resources, and the relative value of the work being performed. Fair pay is also not solely about wages — it encompasses access to benefits, a safe work environment, and opportunities for growth and development within the company.

The Case for Hiring a CFO

Based on the case and market information provided, it appears that the open financial leadership position at CCC would be best filled by a Chief Financial Officer (CFO). The CFO and accounting manager roles share certain responsibilities — such as overseeing financial operations, managing budgets, and ensuring compliance with accounting regulations — but the CFO typically holds greater authority and strategic influence. A CFO serves as a key advisor to the CEO and Board of Directors, playing a major role in decision-making and long-term planning. The CFO's scope extends beyond accounting to include risk management, oversight of IT and legal departments, and the development and implementation of organizational strategies. An accounting manager, by contrast, focuses primarily on day-to-day financial operations within a narrower scope. While both roles require a strong grasp of accounting principles and financial management, the CFO demands a higher level of experience and strategic thinking.

The CCC case indicates that the company is experiencing financial difficulties, including low profitability, high turnover, and challenges controlling costs. These issues call for strong financial leadership, which is precisely the domain of a Chief Financial Officer. While an accounting manager could handle day-to-day bookkeeping, a CFO is better positioned to address the broader financial challenges the company faces — providing strategic guidance, developing financial plans, and collaborating with other executives on key decisions.

Additionally, market data suggests that CFOs are in high demand and command competitive salaries, which may be necessary to attract a candidate with the expertise needed to help turn the company around. Given CCC's financial challenges, the CFO role is clearly the better fit for the company's current needs.

References

Columbus Custom Carpentry Case Study. (n.d.).